Denice R. Preston
Many companies that believe they’re data-driven are actually in the initial stage. What can you do to go from just collecting lots of data to establishing an analytics program for business that can tell you how to modify your strategy to boost profits?
We spoke with Travis Anderson, Toptal’s director of business analytics, to learn his thoughts and business analytics advice about creating a central function within a company, which will eliminate bias in reporting the significance of utilizing data and pitfalls to avoid. As Director of Business Analytics, Anderson leads a team that supports data-driven decision-making by integrating business strategy with analytics processes (i.e., data analysis reports, data analysis, tic analytics, and is based on data).
Business analytics support every aspect of the company, including marketing, sales, finance and operations, product, and HR. Anderson has more than ten years of experience in building and leading engineering and analytics teams to help drive substantial growth in business, such as at Vivint Smart Home Symantec, Brigham Young University, and his company, Mapline. He has a BS, an MS degree in mechanical engineering, an MBA, and an MBA, all of which are from Brigham Young University.
What Are the Uses of Business Analytics?
Business analytics allow managers to make better and more informed choices and improve efficiency in operations by helping managers better utilize resources and ultimately improve the performance of the bottom line, as per MicroStrategy’s Global State of Enterprise Analytics report.
What Were the Primary Challenges at Toptal?
Siloed Analytics
According to Anderson Anderson, the primary challenge he encountered when joining Toptal was the change in an internal process for analytics. In the beginning, the majority of the functional teams within the company were conducting their analysis. Most groups included a data analyst, and each was responsible for their data-related work. This was mainly focused on reports, research, and trend analyses. Although a culture of data was in place and line managers used data to inform their decisions, the structure was ineffective.
Each team took a different method of working, which resulted in the message being mixed. Since each group had an internal data function, There was no coherence in terms of KPIs. Discussions with management were often centered around reconciliation, which was an obstacle. Because of the different definitions and the lessons learned gained from data, it was often misplaced.
Reporting Bias
The other issue that came from the decentralized collection of data and reporting is that every team had a different perspective on its data. Each function chose the data that would portray it most positively. This resulted in a lack of focus and an uncontrollable situation.
Anderson began an overhaul of the company’s strategy and business analysis strategy. The priority was to create a central purpose that is An analytics center of excellence that operates beyond the business lines and acts as a control point. Primary functions ensure the data is collected and analyzed uniformly and the reporting bias is removed.
When the center is set up, the next step is to ensure it is adequately staffed. The first prioritization is to determine the gap in skills. To create an efficient and effective team, you require individuals with excellent technical, problem-solving, and business expertise.
How Does a Business Analytics Center Add Value?
Based on Anderson, the primary benefit of establishing an integrated data and business analytics function is enhancing efficiency and decreasing expenses. If a company cannot measure its employees’ performance consistently over time, it will be difficult for managers to increase performance substantially.
First, you must focus on establishing the consistency of the metrics and measuring an objective based on the agreed-upon metrics. This is the fundamental behavioral impact of motivating employees. Anderson states how you can motivate employees when there aren’t any goals. In addition, any quantitative measures are superior to none. Anderson says, “If you only start to measure one thing, you can see a real benefit–either because you can influence it or see that it is irrelevant.”
Anderson’s team is involved in every aspect of business and conducts periodic check-ins. The primary element of the job is to ensure a proper collection of correct information. Data collection serves a motivational purpose to encourage employees to perform their duties and give a “score” to their performance.
Choosing the Right KPIs
After collecting high-quality and consistent data, determining the appropriate KPIs for every business unit is the most challenging task. The process begins at the top of the pyramid. Business analytics is responsible for laying out the company’s strategy in data to ensure that the chosen business analytics KPIs are valuable to provide insight and are significant at both the business and top-down levels.
It is essential that the team responsible for business analytics fully understands the business and its plan of action. At Toptal, there is strong internal support for the company’s goals.
The data is processed and analyzed using a sound statistical model and forecasting. It is crucial to remember that the outcome of the analysis isn’t an actual decision and is more of a quantitative input that aids in making better decisions. All business decisions fall under the control of the business manager. There is a collaboration between the various stakeholders and the business analytics and data team via an iterative procedure. When a decision is taken, data is required to support it. Not just that, there’s a periodic re-evaluation of the KPIs to ensure that they align with the company’s goals.
It isn’t always smooth and easy. Sometimes, there may be a conflict between stakeholders since there is lots of feedback on the information. There are a few managers who are open to feedback from employees. Anderson considers his role to be offering a digestible suggestion and instructing executives on what to do with the data derived from the information.
Reading the Data Wrong
Anderson discussed the potential negative consequences a company could face when it lacks internal discipline in the collection and analysis of data. In an earlier engagement, Anderson met with an organization with a vast business unit responsible for a significant portion of the company’s revenue. The team had several sales representatives responsible for income exceeding $200 million. But, this group measured its revenues differently than the rest of the business and reported it on an independent system.
During a change in management, a new executive failed to recognize that the data wasn’t uniform and dismissed the entire team because they had received wrong information from the data and believed that the team wasn’t doing its job. The decision was made due to inaccurate and unreliable data within the ERP system. The result was an error of $50 million.
