5 Kinds of Business Analysis Techniques Every Executive Should Know
Each of these techniques can be implemented programatically or using components within the OpenViz API.
If you’re a business user thinking about analytics, the options can be dizzying. Where do you begin? Here is a list of 5 business analysis techniques to get you started.
Pacing. This type of analysis helps you measure progress against goals. These goals can be based on historical data, industry benchmarks or user defined. The important thing to remember is that progress isn’t necessarily linear. For example, some organizations close 50 percent of their total bookings on the last day of the quarter. Others, plateau towards the end. You need a way of understanding how you’ve done historically (or how your competitors are doing) and measure your current progress against that. Pacing analysis gives you a big-picture overview of your trajectory and progress against goals.
Parts of whole reporting. This will help you understand the moving parts that are helping you reach your goals. If you’re on target for bookings for the quarter, you’ll be able to see which product lines, sales reps, campaigns or other assets are contributing most to that. If, on the other hand, you’re behind, you’ll be able to pinpoint the cause.
Scenario analysis. When faced with a big decision, it often makes sense to consider a worst-case scenario, a best-case scenario and the most likely scenario. This is what scenario analysis does for you. It projects possible future outcomes. You’ll get a view of how these outcomes might occur, for example, if your biggest client has a bad quarter, they might cut out your services to save money, or they might rely even more on you in order to focus on their core competencies. Most likely, they’ll have an okay quarter and nothing will change.
Cohort analysis. Also known as segmentation, this marketing-analysis technique lets you see how people engage with your content or product over time. Say you roll out different versions of your website, and you want to understand how much your millennial audience engaged with the new site versus the old one. Cohort analysis will tell you that. It’s the way to see different usage patterns and the evolution of usage over time.
Correlation. The classic question in this category: what’s the correlation between diapers and beer? The answer is that when a dad goes to the store to pick up diapers, often times he’ll pick up a six-pack. So diaper sales are positively correlated with beer sales. Correlation analysis can help you find these types of unexpected relationships.
Once you have these 5 business analysis techniques in your toolbox, you’ll be able to cover a lot of analytical ground—and have the information you need to make more informed decisions as a result.
Author: Chanu Damarla, Senior Director of Product Management at GoodData.