The idea of actionable insights is something that has gone mainstream across different departments in any and every business. Actionable insights are at the heart of many successful business decisions, and are used to help your company grow further than ever before. Actionable insights are key to any data analytics initiatives. Analytics centered around actionable insights is also termed actionable analytics. In this blog post, actionable insights are explained with examples along with few actionable analytics tools which are used when dealing with actionable insights.
What are actionable insights?
Actionable insights are defined as insights which can help in making decisions and taking action. Actionable insights can be used to take informed decisions and help companies grow further than ever before. Actionable insights can be derived from all form of analytics including descriptive, predictive and prescriptive analytics. Dashboards play a key role in actionable insights as they provide a consolidated view of the data and insights. With actionable analytics, companies can drive better decision making and gain competitive advantage by doing so.
Lets take a look at a very short video to understand the concepts of actionable insights with the help of a very simple example.
Actionable insights can be used to take both, programmed decisions (long-term, strategic) as well as un-programmed decisions (short-term). Note that programmed decisions are primarily driven by descriptive analytics while un-programmed decisions are mainly driven by predictive analytics.
Actionable insights often get confused with actionable analytics. While actionable insights are based on data, actionable analytics refers to the application of actionable insights by means of various software tools and techniques.
Key performance indicators (KPIs) and benchmarks play a key role in actionable insights. They provide the ability to track progress and compare your project/product success against success criteria. Often KPIs are used along with actionable analytics tools like analytics dashboards for actionable insights on various levels
One needs to have good clarity in relation to definition of data, insights and actionable insights. The difference between data, insights and actionable insights is the following:
- Data is defined as the raw facts, observations and figures of any action. Any piece of data or information can be interpreted in multiple ways by different people on multiple occasions. This makes it hard to take action based on what you know because there would always be some chance that your interpretation was wrong which could result in making a bad decision.
- Insights are defined as educated guesses from data. You can gain insights by looking at a piece of actionable information and identifying patterns, relationships or other strong indicators within it so that you can make an informed decision on what to do next.
- Actionable insight is defined as the action taken based on your interpretation of both business data and its analytics which have been combined with your experience and expertise. When actionable insights are combined with your expert knowledge you can take action based on all the data which is available to you so that any decision made has a higher chance of being correct.
What are advantages of actionable insights?
Some of the key advantages of actionable insights are listed below.
- Allow you to take action based on data and analytics which leads to better, faster and informed decision-making
- Help in getting closer towards achieving your business goals by identifying the right decisions and related actions resulting in sustained growth over a period of time
- Allows quicker response times in today’s rapidly changing competitive world
- Helps companies improve operational efficiency by identifying actionable insights within your data resulting in process improvements
- Helps to make better use of resources by identifying where you should invest and work on next to drive future growth.
What are risks associated with actionable insights?
One of the key risk associated with relying too much over actionable insights is confirmation bias. Confirmation bias is defined as a tendency to search for, interpret and favor data or information that supports your existing beliefs or ideas. Actionable insights are meant to help you make informed decisions based on data but if actionable insight reports reinforce what you already believed then the risk of making a bad decision is higher.
What are some examples of actionable insights?
The following is listed few actionable insights examples:
- Create targeted marketing campaigns which resonate better with your audience by combining actionable insights from both demographic data (age, gender etc.) and consumer behavior.
- Identify the proper items to sell in specific areas based on cross-selling data for increasing sales volume.
- By analyzing your supply chain process, you can identify where costs are being incurred. You may then adjust the cost structure via actionable insight that results from supply chain process optimization to improve margins.
- Identify loan borrowers that are likely to default on their loans by analyzing actionable insights from financial data and take appropriate action.
- Identify maverick spend based on actionable insights from supplier spend analysis and help plan in a better manner.
- Identify fraud or error patterns by analyzing insights from accounting data and take action to prevent losses.
- Identify preferred suppliers that you should engage to reduce costs and work (act) with suppliers on discounts etc. This is one of the key goals of procurement in any organization.
- Measure the engagement of employees and take action based on analytics analysis in order to improve employee productivity, attendance etc.
What are some tools that can be used?
The following are some tools which can be used to work with actionable insights:
- Enterprise Dashboards: Dashboards can be created using tools such as Qliksense, Power BI, Tableau etc. to provide actionable insights from available information.
- Web analytics dashboards: Tools such as google analytics can be used to provide actionable insights on customer behavior data based on customer browsing patterns. Other tools similar to google analytics include MixPanel, Piwik, Smartlook etc.
Here are a few of my related posts which you would want to check out:
- Data-driven decision-making: What, why and how
- Relationship: Analytics & data-driven decision-making
Actionable insights are action taken based on your interpretation of both business data and its analytics which have been combined with the experience and expertise. When actionable insights are combined with the expert knowledge you can take action based on all the data which is available to you so that any decision made has a higher likelihood of being correct. Some advantages of actionable insights include faster response times, better & informed decision making, using resources more efficiently by investing where needed etc. There are tools such as enterprise dashboard software or web analytics dashboards too which allow using actionable insight from information they provide in order to make decisions quicker or optimize processes accordingly. If you would like to more, please reach out to me.