Analytics: You absolutely must have it, now tell me what it is

Analytics can save the world.  More specifically it can revolutionize the way you do business, which could at least save your world.  Analytics is the Holy Grail of Sales Performance Management.  If you work with SPM you already know that because the term “analytics” has been a buzzword within SPM solutions since I can remember.  It’s amazing how the latest and greatest concept can stay “latest and greatest” for a decade or more.  The sad fact is analytics is re-revealed as a new milestone every couple of years.  I suppose that means nobody is ever getting there.  It’s right up there with El Dorado and Atlantis.

So what is “Analytics”?

Analytics

An`a*lyt”ics, n. The science of analysis.

Does that clear it up?  I doubt it.  It turns out that the term analytics is more a guide post than a destination.  It’s like saying you are going to “the city”.  If you live in Long Island “the city” is Manhattan.  But if you live in Pullman, WA, New York probably never enters the brain.  In my opinion the reason we never seem to get to this mythical land of analytics is simple.  Nobody knows where it is.  Or to put a different way, we don’t all necessarily agree on what it looks like and what it does for us.

It makes sense to say that analytics are going to depend on the organization.  What’s less obvious is something that I’ve seen many times at different clients.  Definitions of analytics within the organization will vary depending on the role of the individual doing the defining

Macro-Analytics vs. Micro-Analytics

The most common divide is a concept I like to call macro vs. micro.  When putting together an analytics tool the most important element is the data and how it’s structured.  Often times you need to tweak your source systems in order to produce data at the level desired for your analyzers.  Here’s where the conflict occurs. 

Let’s take a Global Compensation Director.  She would like to look at her data at a summary level based on role, country, etc.  She wants to reconcile compensation data from the SPM system with data from the accounting system and the sales reporting system.  Global Directors want to view metrics like a captain of a cruise ship.  Cruise ships can drift a few feet off course as long as the captain can avoid the ice burgs.

Now let’s take the Compensation Analyst assigned to the Northeast New Jersey territory in the retail business unit.  He wants account level and product level metrics.  Analysts need to know the specific rate paid on specific orders.  They are looking to find deviations at a micro-level.  They need to answer questions related to the setting of quotas and the effect of vacation time.  Analysts deal with individuals and their paychecks, there is no place for estimations, averages and summaries when it comes to paychecks.

So where is the “analytics” City of Gold?  Every company needs to draw their own map.  Certainly there are many ideas out there that can be reused as starting points or templates.  However, when it comes down to it every stake holder needs to identify what they want to see.  This isn’t a case where you buy a tool and it triggers a wave of game changing analytical analysis that you’ve never heard of.  What a nice analytics tool gives you is built-in adaptability.  You might start with one vision and change it later after a period of use. 

However, if you don’t start with some sort of a vision and/or goal you will probably be dissatisfied with the results conversely, a common mistake is to try and have too many goals.  As the saying goes, “a tool that does everything does nothing well.”  Then three years from now you will learn again about this latest and greatest concept named “Analytics” and get all excited yet again.

Later we can create a roadmap to successfully building an analytics tool.  Stay tuned…


-Jason Kearns