These days, the term Actionable Insights has become one of the most common terms
These days, the term Actionable Insights has become one of the most common terms used in Analytics projects. It has been used so much that it has almost lost its relevance and meaning today. So, what exactly is Actionable Insights and how can you achieve it? In simple words, Actionable Insights are insights that can be acted upon by the decision makers. However, many companies struggle to realize Actionable Insights as they miss the three key aspects or building blocks of Actionable Insights.
Most Analytics projects fail due to lack of measurable and time-bound business goal(s); a goal that is not only tied to the problem statement, but also to the KPIs (Key Performance Indicators). Basically, a KPI is a measurable value that demonstrates how effectively the measurement entity is achieving its goals using targets, control limits, ranges, or thresholds. For example, rather than having a business goal (to base your analytics goal) as Reduce Procurement Spend, make the goal more measurable and time bound by having the business goal statement as – Reduce Procurement Spend in the Engineering Consumables Category by 12% to 15% in FY2019. Here you have a target (or control limits) of 12% to 15% that needs to be achieved within a defined time period.
Every KPI should have an owner to fix or improve the KPI. Even when the KPIs are defined and dashboards are regularly accessed, there is little clarity on who will own the KPI in achieving the goal. In the above example, who is accountable in reducing the spend in the Engineering Consumables Category? How will the business, IT, and Analytics teams collaborate in achieving the goal? Who will own the goal and drive results? Is it the Procurement Manager, Engineering Manager, or the Category Manager?
Even today many business leaders believe – more is always better. They look for an Analytics Dashboard with 60 or even 100 KPIs. Unfortunately, there is a limit on the amount of information the human mind can comprehend or process at a time and certainly the human mind cannot comprehend 60 or more KPIs at a glance. Research done by Psychologist George Miller and many more have proven that human mind can only comprehend 5-9 pieces of information at a time. In other words, the total number of KPIs for a measurement entity should be between 5-9 with a good mix of leading and lagging indicators. And you will be able to select the small set of KPIs only if you have a strong goal and an accountable ownership.
Ultimately, Analytics and Actionable Insights especially in business enterprises are not just about technology or data management activities per-se. Successful Analytics projects also depend on organizational aspects as setting goals, defining ownership, and communicating change are strongly related to change management and people related issues. If these issues are not addressed, Analytics and Actionable Insights hold little water!