Thomas Davenport is one of the best know voices in the field of business analytics. He has a book with Jinho Kim which discusses how individual business people can best manage their work in a world where analytics are a key part of many business strategies. The aim of the book is to enable managers and other people engaging with “quants” to best use the talents of the quants. To help create quantative analyse that is rigorous but also connected to business needs.
They map out their approach to quantative analysis in three stages. (This encompasses a total of six steps, I’ll concentrate on the stages, to avoid confusion between steps and stages). The first stage is Framing the Problem which includes problem recognition – why are we trying to do something? — and a review of previous findings – what do we already know?
The next stage is Solving the Problem – the actual analysis. They are keen to emphasize not to jump straight into trying to solve the problem. If you don’t know why you are doing the analysis, or what you already know, any analysis is likely to be highly ineffectual. The actual analysis includes choosing the model, data collection, and analysing the data using the chosen model. One of the strengths of the book is the numerous examples it gives to help the reader understand what is going on at each stage.
I was particularly pleased about the emphasis the authors placed on the final stage. They say, and I agree, that Communicating and Acting on the Results is just as important as the analysis. It isn’t enough to do some analysis; the analysis has to change an action to be worthwhile from a business perspective. Results presentation and generating action are key to success. Analysis without proper communication of the findings is a waste of time — it is great to see such major figures in business analytics emphasizing this point.
Read: Thomas H. Davenport and Jinho Kim (2013) Keeping Up with the Quants: Your Guide to Understanding and Using Analytics, Harvard Business Review Press