IS REPORTING REALLY ANALYTICS?
Yes. Reporting is analytics.
Traditionally reporting has come to mean pulling out data, doing some transformations, and presenting it in a pre-defined format for consumption by decision makers. IT/IS professionals in the CIO/CTO buckets in organizations typically do this activity. While that is the past, the future is the world of analytics where the same data (and a lot more of it) can now be processed with/without the application of advanced mathematics and the interpretations presented as ‘insights’ for businesses to base their decisions on.
If you are with me so far, let’s now get back to the question of ‘is reporting really analytics?’
If you go beyond the ‘how’ into the ‘why’ of reporting we may find an answer there.
Those that claim reporting is not analytics probably get stuck in the ‘how’ reporting is done and hence it being different from analytics.Here is a fundamental ‘how’ difference – for reporting there is use of the IT paradigm rather than a business paradigm (pre determined specifications, Data Warehouses, ETL tools, BI platforms, long shelf life, enterprise level delivery by CIO organization etc.) while analytics is still probably handled by business teams directly using lightweight tools and on answering business questions in an ad hoc basis to help leaders make business decisions.
Sometimes the usage of mathematics (or lack of it) is also cited as a reason for reporting being different from analytics. While this may be true factually, unless we get into the ‘why’ we may not notice that reporting is really nothing but analytics.
Why Are Reports Created In The First Place?
* Communicate what really happened in the business in the past period
* Compare with a past period to see a relative view
* Find reasons why something may have happened and depending on whether it was a desirable or undesirable outcome take appropriate actions.
* Provide guidance for decisions for the future.
If these are the objectives for reports, any reason they have to be unwieldy, technology heavy, take months and sometimes years to produce, spend millions in maintaining and make each revision a nightmare for a business user?
I would argue the business team should take control over their information needs, interpretation and subsequent action. As they learn about what happened in their businesses, they could dig into the data to figure out reasons behind the outcome and then make informed decisions about changing the future with the right decisions. As the business teams prepare those reports they can notice directional changes business metrics more clearly and can dig into the reasons behind. Here is an elaborate example to drive my point:
> An ecommerce operations team notices that the ratio of abandoned carts
> is rising from one of their reports.
> The next course of action is to dig into the data to find reasons
> behind this change in business metric.
> They figure it could be one of many possible factors that are
> responsible – page load time at checkout, shipping cost disclosure
> too late in the purchase funnel, complex payment process etc.
> Do a factor analysis using elementary statistics on this data and
> figuring the biggest contributor among all possible suspects.
> Deciding to fix it by taking appropriate action.
Any reason step #1 is an IT department activity and the others the responsibility of an analytics team? I can’t find any rationale from a ‘why’ perspective, but yes there are challenges from a ‘how’ perspective.
We would need to re-skill tech teams to get more business savvy so they can interpret data better, train them in mathematics so as not to be afraid every time there is a Greek character involved J, train them with analytic toolsets, get them to sit next to business teams etc. Now for the entrepreneur in all of you this presents a great opportunity to fight the likely inaction by CIO organizations and enable the business users with tools/techniques/platforms.
You could help businesses save millions if not billions by helping substitute the millions of person hours preparing and producing those reports into that enable the business user to be self sufficient and take care of their own information needs. Go ahead build that next generation analytics engine that also includes easy to use reporting.
