Key Aspects of Analytics
- Monitoring business performance β Metrics provide real-time visibility into how different parts of the business are operating and performing. Key performance indicators can be tracked over time to identify positive or negative trends.
- Optimizing processes β By quantifying process metrics like cycle times, quality, throughput, and costs, inefficiencies can be identified and addressed. Process optimizations are driven by data.
- Guiding strategic decisions β Executive decisions on initiatives, investments, and resource allocation are better informed through metrics on market dynamics, competitive benchmarking, and opportunity sizing.
- Uncovering issues and opportunities β Revealing metrics that are underperforming or exceeding expectations highlights areas for troubleshooting issues or capitalizing on momentum.
- Setting quantitative goals and targets β Metrics allow tangible, measurable goals to be defined for focus areas versus vague qualitative statements. Progress tracking is enabled.
- Correlating data inputs and outputs β Relating metrics as inputs and outputs allows models to be developed showing cause and effect. Hypothesis validation is powered by correlating metrics.
- Communicating insights through reports and dashboards β Metrics quantified over time, segmented by dimensions, and shown visually provide clearer, more accessible insights versus raw data.
However, improper metric selection and use can also lead to poor conclusions, perverse incentives, distractions, or blind spots. If not defined and used carefully, metrics can provide misleading statistics, drive incorrect behaviors, or cause impatience with long-term qualitative progress that is harder to measure. This article provides best practices for leveraging metrics effectively in analytics along with common examples.
What is a Metric in Analytics ?
Metrics are foundational elements in the world of data analytics and business intelligence. A metric refers to a quantifiable measure that is used to track, monitor, and assess the performance of individuals, teams, systems, and organizations toward desired results.
Choosing the right metrics effectively provides good value in driving data-informed decisions and strategy. In this article we will see what is a metric along with guidelines and examples for applying metrics successfully in analytics.