Company X (not the real name of the organization) is a fairly popular manufacturing company that makes parts for large corporations. This company uses analytics to be competitive in the global marketplace. Company X’s management team was able to monitor any aspect of their machine shop. They could easily tell you what their forecasted operating costs would be in the next operating period with a high degree of accuracy. Even with all of this information, the company was blind to insights. They did not see what the data was showing them. They spent half a million a year in shipping costs for outsourced work that would have to come back to their facility. They hired our project team to help reduce their costs and streamline their process. As a result, the company invested in the equipment needed to do that process in-house and was paid for in six months thanks to the cost savings. When I said the company used analytics, I didn’t say they used it properly. They could have come to the same conclusion if they just listened to what the data was trying to tell them.
The term “analytics” has been appearing all over the place both directly and indirectly. The fact is, analytics isn’t new. First, we should define what analytics is. Analytics is the use of statistics to transform data into information to gain insight and make better decisions. That is the short definition of the modern day meaning on Analytics. It’s important to keep in mind as you read this, that analytics is a process and not a one-time thing.
One could ask if there really is a difference between data and information? The answer to that question is sort of complicated. Logically, no, there isn’t a difference. In the business setting, however, the two are different. This is best described with an example. Imagine yourself as a hungry toothless infant. Your parents give you a whole apple to eat. The apple is healthy for you and can help you grow but, it’s basically useless because you do not have teeth to bite into it. However, if you turn that apple into applesauce, which is technically made from apples (besides the extra sugar), then you would be able to consume that apple and gain the benefits.
Turning data into information is important for organizations of all sizes. With this information, an organization is able to know quantitatively how well they performed, forecast how well they are going to do, and the actions they need to take in order to improve. There is not a winning argument out there on how those three items are not important. If you want to succeed in today’s marketplace, then you have to have those three pieces of information. The days when you could rely on your “gut” to make the decisions are gone. That option is not feasible anymore.
Organizations fail because they ignore the information right in front of them. Even organizations that claim to use analytics can still fail. Just because your collecting data doesn’t mean you’re automatically going to get the correct insights. Organizations may have similar metrics but a majority of them are going to vary across industries. You have to know what’s important for your organization’s industry. Analytics will not be able to give you the insights you need to grow and improve without the proper metrics.
At Cholla Automation, it’s our mission to provide a cost-effective analytics solution to organizations of all sizes. We provide the same service as an in-house data scientist or business analyst but at a fraction of the cost. We work with our customers to give them insight on what metrics they should keep track of in order to grow and improve. Our dashboards are your one-stop shop to monitor ANY and ALL aspect of your business. Our success is your success.