What Is Managerial Analytics?
We use the term managerial analytics as the title of this book, so we should define what it means. We define managerial analytics as what a manager needs to know about the field of analytics to make better decisions. So we are using the term to refer to understanding the field of analytics from a manager’s perspective. Or, in other words, managerial analytics helps prevent you from being fooled or confused by the many different analytic terms and solutions offered, helps you see what is possible, and helps you do more on your own.
Managerial analytics is about understanding the difference between descriptive, predictive, and prescriptive analytics. It is about understanding the different tools and where they fit in. It is about cutting through the buzzwords to help you better understand solutions.
Hopefully you are now sensing how large the field of analytics really is. You can get an advanced degree in very specific niches within the analytics field. As a manager, you cannot understand every nuance. You should, though, understand what problems the different disciplines of analytics can solve. And you should know what types of decisions a particular project will help you with.
Another way to think about this is that you will often be presented a single tool as a way to do analytics. We want this book to help you, as a manager, cut through the confusion and determine which type of analytics you need and for which types of projects a tool may provide value. No one solution will cover the full range of the field of analytics. This knowledge should help you select analytics projects that meet your objectives and then guide successful implementations.
Managerial analytics is not devoid of technical material. As the importance of data and analytics increases, you will have to be more comfortable with the technical aspects if you want to succeed as a manager. While you won’t be expected to understand all the nuances of different disciplines, you should understand the limitations of a given analytics solution—and what that solution won’t do. Many times, an analytics solution will be presented by someone pushing an idea, and it will be impossible to tell what the solution won’t do. Vendors commonly write descriptions of their analytics solutions that make it seem like a single solution will solve all your problems. If only it were this easy.
This book covers enough of the key technologies behind descriptive, predictive, and prescriptive analytics so that you will know if a project is on track, you will know what experts you may need, and you can better understand the details of the solutions being presented to you and have a healthy understanding of their limitations. In other words, with this understanding, you are less likely to be fooled or confused by vendors and co-workers using the term analytics in a vague way.
But managerial analytics is about more than not getting fooled. It is also about the art of the possible. The analytics movement is real because it produces real value. To capture this value, however, you need to know what is possible. So managerial analytics is about understanding how analytics can apply to your business. One of our goals with this book is to get you thinking about your company or organization in a new way. That is, by seeing different examples and understanding the different areas of analytics, you may uncover opportunities for adding value in ways you hadn’t thought of before—and these new ideas may turn out to be much more important than current projects you are working on. If you want your entire company or just your small department to make better use of analytics, the more you and your colleagues understand what is possible, the more value you will find.
Finally, not everyone has access to a large IT department and teams of analytics experts. In fact, most people don’t. So don’t think of managerial analytics as just something that big firms do. Instead, managerial analytics is for organizations of all sizes. Managerial analytics is about giving you enough information that you can get started with what you have. From what we have seen, most managers have plenty of room to use the data and tools they have in order to make better decisions. Don’t wait for big projects; you can start now.
The rest of this book is devoted to helping you understand managerial analytics—analytics from a manager’s perspective. This will help you whether you are doing a single project within an organization or rolling out analytics solutions to your entire organization.
It will help you understand the definition, help show you how the types of analytics work together, and present you with practical applications that are applicable to a wide range of organizations. It provides cases and examples to solidify the ideas throughout. And, since analytics is a technical field, this book also discusses the technical aspects of analytics. You can skip these sections without losing the flow of the book. But, as a manager, the more you understand the technical aspects, the better you will be able to apply analytics.