Chapter 2

Pillars of Business Analytics Success

The BASP Framework

“Great things are not done by impulse, but by a series of small things brought together.”

—Vincent Van Gogh

Chapter 1 introduced some of the challenges business analytics faces, from both outside and inside the organization. We are sure that by now you have gained a new appreciation for why some analytics initiatives are difficult to get off the ground or why others languish within the organization. In this chapter, we propose and outline a conceptual framework for successfully implementing business analytics in any organization so that your analytics initiatives will flourish and bring positive return on investment to your firm.

Our emphasis in this book is on practical solutions that have shown themselves to work in successful analytically focused organizations. The framework we developed is based on research we conducted with analytics leaders, as well as on our own practical experience, with each of us having been in this field for 20 years. That being said, any framework is merely a starting point for your organization’s unique circumstances. Therefore, we encourage you to think about how this framework may be uniquely applied to your company, and we welcome your feedback or stories regarding how the framework has affected your organization.

We created the framework with the intention that it be simple and straightforward, yet have deep complexity beneath the surface, such that it applies to a broad range of organization challenges and situations. We hope the framework will inspire business analytics creativity, as well as heated debate. We believe the framework is responsive to the needs of business analytics customers, as well as business analytics creators. We know it’s a framework a CEO can get behind, yet the individual analyst or manager can also use it as a blueprint to take analytics to the next level at her organization.

This chapter is merely an introduction to the elements of our framework. We have provided key practical examples throughout the book, as well as some dedicated chapters on important aspects in order to illustrate the concepts in the framework fully.

Before reviewing our framework, we think it is important to cover the Five Stages of Analytical Maturity that are required in order to move toward being an analytical competitor. The Analytical Maturity model was developed by Tom Davenport, a pioneer in the use of information and analytics effectively across the enterprise, and his coauthor Jeanne Harris in their 2007 work, Competing on Analytics.1 Their outline to becoming an analytical competitor involves five stages, with Stage 5 being the most advanced.

• Stage 1 is labeled “analytically impaired” and is reflective of a company that has some data and management interest in analytics, yet no real center of excellence or organized capability.
• Stage 2 is labeled “localized analytics” and reflects an organization where some isolated managers may support leveraging analytics, but there is no formal enterprise-wide effort or recognition at the senior-most level regarding the importance of analytics.
• Stage 3 is labeled “analytical aspiration” and has some executive level sponsorship regarding the importance of analytics, and some organizational structure and effort have been put in place to leverage analytics within the enterprise. However, analytics is typically siloed to a few areas of the organization and lacks standards, support, and consistency.
• Stage 4 is called the “analytical company” and involves a company-wide analytics priority that is actively under development, has the support of top executives, and has some standards and systems consistency.
• In Stage 5, an “analytics competitor,” the organization has consistent standards and practices, has thorough data integrity, and routinely capitalizes on all of the business benefits of its enterprise-wide analytics focus and capability.

The framework we developed for this book is designed to move your organization rapidly through the five stages and into becoming a world-class center of business analytics. The conceptual framework is especially helpful to organizations that have expressed interest in making analytics a priority, have made some organized analytics efforts where senior leaders understand the benefits of analytics, and are attempting to push themselves further into Stage 5.

Based on our experience and research and through interviewing other analytics leaders, we have noticed several common themes regarding companies that are successful with business analytics initiatives versus those that are not successful. From this knowledge, we created the framework that we call the Business Analytics Success Pillars (BASP). The BASP captures the key activities and similarities that thriving and successful business analytics functions share. The BASP can be used by the analytics leader as a self-check on what is being done well versus what is not done well. The BASP can also be used by the senior business leader to assess what is working with the analytics functions and what is not.

The BASP framework contains seven pillars that we believe are critical to successful business analytics implementation (see Exhibit 2.1). The pillars are not necessarily going to be followed in a particular order, because some organizations may be strong in one pillar but weak in others. For example, your organization may have a great culture of internal communication and have very little organizational friction when it comes to communicating information across business units or geographies—so the pillar related to communication may not need as much work. Conversely, your company may be very weak in the data foundation, with little integration or standardization of data sources across the enterprise—so a lot of your effort may need to be spent there. Regardless of your specific situation, the pillar framework can be thought of as being similar to the foundation of a house—you need all of the areas of support in order to make the house stand strong and not collapse. Therefore, the goal of the BASP framework is to focus your organization’s attention on those areas that are key to business analytics success and will lead to the greatest return on investment.

Exhibit 2.1 BASP Framework

BUSINESS CHALLENGES PILLAR

In today’s challenging business environment, professionals across all industries are being tasked with doing more with less, with limited time and resources to allocate toward individual business analytics initiatives. This makes prioritization imperative and means that a crucial step of any business analytics implementation requires clear understanding of organizational objectives, or “business challenges,” to ensure that any solution is aligned with, and addresses, the company’s biggest or most pressing needs. This is why we have the first pillar of the BASP framework as “business challenges.” This concept may sound obvious to some, but it is a deceptively simple concept that is often difficult to follow consistently. Any business analytics initiative must be grounded in “critical” business challenges. When we say critical, we mean challenges or questions for which the answers will lead to the company increasing its revenues or reducing its cost. It’s very easy for the analytics effort within an organization to drift gradually into issues of intellectual curiosity or merely be a support function that answers questions at the whim of senior business leaders. This is how an analytics function can gradually turn into a cost center, rather than a function that adds economic value to the organization.

We cover the best practices for how to establish the critical business questions in detail in Chapter 3: “Aligning Key Business Challenges across the Enterprise.” However, some of the most common business challenges that analytics may work to address include:

• How can I increase customer acquisition and retention?
• What prospects do I need to target in order to increase market share/customer spending?
• What are the emergent competitive threats, and how can my organization manage them?
• Who are my most profitable customers, and how do I bring in more like them?
• What types of our customers are most loyal, and what can we do to increase loyalty among the others?
• How are customer prospects using our online environment, and how can we increase conversion to a customer in our online experience?
• What are customers saying about us in the marketplace?
• What new products do customers want from us?

Although these challenges are broad, they are common to all industries and businesses. Understanding their priority within your organization and their alignment with your business’s mission should allow you to focus your expertise on the most important needs for which to develop a business analytics strategy or solution.

DATA FOUNDATION PILLAR

As with architecture, the strength of any design is incumbent on the strength of its foundation. And similar to architects, business analytics practitioners must engineer an analytics framework that’s built to last. With your business challenges outlined, you can start constructing the foundation that’s built on data.

From our own experience and the interviews we conducted with analytics leaders, we’ve noticed a data trend—namely, that...