Are you making the most of your data? Many businesses are collecting data but aren’t sure of the best way to leverage it. With analytics, you can generate actionable insights that inform your overall business strategy. Learn more about actionable insights in this guide from Spider Strategies.
What Are Actionable Insights?
Your organization is probably already tracking different forms of data, whether that’s website visits, conversion rates, social media presence, or sales growth. An actionable insight is simply any type of business data that can help you make decisions and achieve better outcomes.
Actionable insights may come from quantitative or qualitative data. They can be derived from all types of analytics, including descriptive, predictive, and prescriptive analytics. Generally, actionable insights arise when team members review and analyze raw data with the help of tools and technology like machine learning algorithms. This is what sets insights apart from typical business reporting: the analytics are in place to interpret and draw conclusions from the data.
Types of Insights
Actionable insights are drawn from the systematic analysis of your business data, also known as analytics. According to Harvard Business School, analytics fall into four broad categories:
- Descriptive: This type of analytics tells you what has happened in the past. It is simply a report on business activity over time. An example of descriptive analytics might be a report on your sales figures over the past two fiscal years.
- Diagnostic: This category of analytics seeks to explain why something happened. For example, if the number of customer service complaints has increased, can you identify a causal factor? Perhaps there is an issue with your e-commerce platform or your payment processor.
- Predictive: This type of analytics helps you make an educated guess about what might happen in the future. Using historical data, you can predict likely scenarios or trends for the upcoming month, quarter, or year.
- Prescriptive: This type of analytics is often the most challenging. Using current and historical data, prescriptive analytics seeks to guide future business actions and decisions.
Often, data scientists use these four types of analytics in tandem to get a complete picture of an organization.
Key Characteristics of Actionable Insights
In the world of business intelligence, actionable insights typically have a few key characteristics in common. These include:
Alignment: The most helpful insights are closely aligned with your business goals. If you’re not sure where to start, look at the data from your key performance indicators (KPIs).
Clarity: The way you communicate your business data is critical. Stakeholders need to understand what a particular insight means and the potential impact on your bottom line.
Context: This is where the difference between descriptive and prescriptive analytics comes in. An insight is more helpful if you have the context around what the data means. You need to know what happened and why it happened to take the right action moving forward.
Novelty: This characteristic is more of a reflection of human nature than of your business data’s value. If you are providing a data analytics report to your leadership team, a novel insight can help capture attention and spark interest. This could include a new KPI, a unique outlier, or a high-performing branch or team.
Relevance: You shouldn’t collect data just for the sake of collecting data. Review your KPIs to make sure you’re generating valuable insights, but also know that relevance can be subjective – you need to get the information in front of the right decision-maker to implement change.
Specificity: A big-picture overview of the organization is helpful, but granular data is most likely to be acted upon. Strive to provide insights that are specific and complete.
Actionable insights can be used to inform both short-term and long-term business decisions and strategies.
Why Are Actionable Insights Important?
Good data helps you learn more about your business, customers, and industry. The benefits of utilizing actionable insights at your organization include:
Improved Decision Making
Any business decision carries a degree of risk. There’s always a chance that the wrong decision will affect your bottom line. But when you’re collecting and analyzing robust data, you can identify patterns and trends in your business operations that can help you make better decisions in the future.
For example, if you know a particular product tends to sell out around the holidays, you can increase your inventory of that item before the next holiday season to ensure a better customer experience. With data-driven insights, your team can make data-driven decisions about your business and implement changes that can lead to growth, higher profits, and better outcomes.
More Nimble and Efficient Operations
To stay competitive in a rapidly changing environment, businesses need the ability to respond quickly. With real-time insights, you can get a comprehensive picture of your business operations from day to day, and adjust your strategies if needed. You can identify inefficient processes and make improvements to streamline your operations. Plus, big data tools automate many of the routine processes involved in collecting and analyzing data sets, freeing up your employees to focus on other priorities.
Tailored Customer Offerings
Descriptive analytics can offer valuable insights into customer behavior, interests, and preferences. With this feedback, you can hone your product or service offerings based on qualitative and quantitative information. And with granular data and audience segmentation, you can improve your targeted marketing to get the right products in front of the right customers.
Better Use of Resources
Actionable data insights can help you make better use of organizational resources, identifying where you should invest and what to work on next to drive future growth – or where you should reduce investment. For example, perhaps you have one branch location that consistently has lower sales than any other. You may decide that the best decision is to close that branch and reassign staff to other locations. Insights allow you to optimize limited resources so you minimize waste and maximize profit. Without this form of business intelligence, you run the risk of spending money on programs or initiatives that ultimately won’t help your enterprise grow.
How Do You Turn Data Into Actionable Insights?
Apply these best practices to generate actionable insights from your business data:
Start with the Right Data Sources
Too often, businesses lack a cohesive, centralized system for collecting and analyzing data. Some have legacy systems using spreadsheets or manual analysis, others have data that is siloed across different departments or teams. You need clean, high-quality data and a central dashboard that gives you complete visibility across all your business units. Be sure to take time to review all your metrics or key performance indicators (KPIs) to make sure you’re tracking all the information you need.
Use Analytics Tools
You need the right tools and technology in place to generate effective insights. Consider analytics tools that implement machine learning so you can automate the analysis required to visualize trends and patterns in your data. Be sure to think through your stakeholders – who will need access to your analytics tools, and what permissions and controls do you need to manage across the organization? Some employees will need to be able to upload data, while others will simply need a visual snapshot of your metrics. Dashboards play a key role in providing a clear, consolidated view of your business insights – make sure the tools you choose have the capability for comprehensive visualization and reporting.
A common barrier to turning insights into action is pushback from key stakeholders. It’s normal to resist change or think that the way you’ve always done something is the best option. But actionable insights can improve your business strategy so you can outpace your competition. Communicate your business strategy company-wide so everyone understands the value and set aside time to train staff on your dashboards and tools. When team members understand why they’re tracking certain metrics, you’ll have more buy-in and it’ll be easier to implement changes.
Adapting Insights into Action
Even with a clear system for visualizing your data, you may be unsure of the best way to turn insights into action. In general, there are three paths you can take with insights:
Adaptation and action
Once you have actionable insights, how can you translate them into practices or policy changes that help your business grow? Actionable insights often break down into two types:
- Programmed decisions: These are long-term changes that are integrated into your existing business strategy.
- Un-programmed decisions: These are short-term changes usually informed by predictive analytics.
Make sure you know who has to sign off on particular actions, whether it’s using a different marketing tactic or revamping your invoicing process. Be ready with the justification for a process change and communicate the potential benefits.
Data insights don’t necessarily always require action. Sometimes, your analytics tools can confirm certain assumptions or validate a recent business decision. If you recently added a new IT employee to your team and you’ve seen that the time to resolve support tickets has decreased, you can infer that adding staff capacity was the correct choice. You don’t need to take any immediate action based on the insight, but you have data to support your hiring decision.
Rethink your strategy
In some cases, you don’t need to make an immediate change, but insights can clarify if a business strategy is working or not. For example, perhaps you’ve recently launched a digital marketing campaign, but your web traffic hasn’t significantly increased. You may need to wait and see how the numbers change over time before taking action. But your data can help you refine and revamp future campaigns.
Whatever course you take, continuing to track and report on KPIs consistently will help you assess the impact of any actions you take based on insights.
Case Studies from Spider Strategies
Actionable insights are useful across a range of sectors and industries. At RGA Enterprises, a manufacturer of cleaning and disinfectant products, the leadership team implemented Spider Strategies’ balanced scorecard software to turn their data into actionable insights. RGA Enterprises tracked key metrics including:
- Sales growth
- Customer satisfaction
- Employee churn
- Overall equipment effectiveness
With an insights dashboard, the company was able to quickly identify and respond to issues across different departments and teams. They reduced churn, improved equipment effectiveness, and even grew their overall sales.
Data-driven insights are also used in local, regional, and national government agencies. For example, the Sheriff’s Office of Carson City, Nevada, shifted from manual data collection to Spider Strategies’ performance management platform. With this new tool, the staff could take advantage of KPI tracking, clear data visualization, and robust reporting. They were able to compare data year over year, as well as analyze trends in real-time. Plus, the Sheriff’s Office made the data publicly available so that citizens could get a better understanding of the office’s operations and decision-making processes.
With the right data in place, the office could improve its staffing and budgeting practices, while improving government transparency and citizen outreach.
Drive Action with Spider Impact
Without the power of actionable insights, you’re missing out on a competitive edge over others in your industry. If you’d like to start using actionable insights in your decision-making processes, Spider Strategies is here to help. Our Spider Impact platform makes it easy to track and report on key metrics, whether you’re using Balanced Scorecard, Earned Value Management, or another methodology .
Spider Strategies’ performance management software lets you visualize your strategy to share insights across your leadership team and improve decision-making processes. And with powerful integrations, you can easily pull data from countless SaaS applications and tools. To get started, sign up for a free test drive or demo today.