Transforming Data Into Actionable Insights

Endless job postings and websites suggest that the key goal of an analytics project is to "transform data into actionable insights." It sounds good, but what does it actually mean? How do you know if the person you hired is living up to the vision of their role?

What people really mean when they ask for this expertise is the skills you find from those in the field of prescriptive analytics. For an analysis to drive action, you have to begin with the end in mind. Before we gather any data or do any analysis, we have to understand the actions we will be evaluating. More than that, we have to imagine what kinds of analysis could help us decide on the right action.

Why Start with Decisions?

Imagine starting a road trip without a destination. You might have a tank full of gas and a GPS, but without a destination, you’re just wandering. The same is true for analytics: without knowing the decisions you’re aiming to support, you risk wasting resources exploring data without a clear purpose.

Defining your decisions early allows you to structure your analysis to address the business needs. Analysts with a prescriptive analytics background know exactly what it takes for an insight to align to action. This is where the meaning behind “actionable insight” transcends buzzwords: it can point to a computer-driven tool for guiding choices in the real world.

Translating Data into Decisions

Once you have a clear decision framework, the next step is transforming your data accordingly. Here’s where actionable insights truly come to life. However, there are often many gaps to fill between the data you have and the decisions you would like to make. As you learn what data exists, the project goals may evolve if there are no actionable insights to be had from the existing and accessible data.

There is always a balance between the effort it takes to craft the analysis and the improved decisions that go with them. At times the answer is to invest in better data. Other times working with end users is key. Having a flexible plan helps your team adapt to the situation and ensure the best use of resources aligned to business goals.

Dashboards For Actionable Insights?

We believe there are two important reasons to create a dashboard. For most companies, simply accurately knowing how you are performing as an organization is an important baseline. No actions need to be taken just because of the current state of the business, but there are benefits from people really knowing how they are doing.

Actionable insights point to the second category: When people make different (and better) decisions because they have access to information. People often latch on to this idea because it makes it easier to sell the investment in analytics. Unfortunately, without specific decisions we hope to improve, many analytics projects fall flat.

Conclusion

As you consider beginning or expanding an analytics program, start by asking which specific decisions you want people to improve through "actionable insights." Work with your team to understand if there is data that could lead to better decisions in those areas. If you have a clear picture of that story, keep it in mind as you develop a project roadmap.

If you are not sure what analytics can do for your organization, we're here to help! Only some of our clients use prescriptive analytics to make their most important decisions. But every one of them use data and the insights gained through analysis to inform the actions they choose to take.