Often, our clients come to us believing that they already apply analytics to their business, when in fact, they are actually doing a fantastic job at applying metrics. Metrics provide measurements of variables, while analytics explain the relationships between variables. Although both metrics and analytics work together to provide you with the insights necessary to grow your business, metrics and analytics are not synonyms. To date, metrics have dominated the business intelligence field in the form of dashboards and scorecards. Dashboards display metrics as the measurement of key variables. For this reason, they are very useful for monitoring current business activities and results. While metrics are still very important, analytics goes beyond measurement to provide explanations of the deep relationships behind business metrics. Instead of reporting that something happened, analytics seeks to explain why something happened, when events can be expected to occur, and how we should act to create certain desirable outcomes.
The shift towards analytics is growing in importance because today’s executives need to be able to scale their decision-making in an increasingly complex world with little room for error. While many executives understand the value of data-driven decision making, decision-makers can become overwhelmed when faced with the volume and complexity of available data provided by metrics and dashboards. Analytics provide value to by cutting through the clutter and complexity and providing decision-makers access to the most imports variables, the relationships between variables, and even the accuracy of the analytic model. When using analytics, executives are able to avoid sorting through non-information, and instead, focus on the information which drives their best decision-making.
