The Analytics Lifecycle Toolkit: A Practical Guide for an Effective Analytics Capability

456 Pages·2018·8.66 MB·English

by  Gregory S. Nelson

TrimSize:6inx9in (cid:2) Nelson ffirs.tex V1-02/09/2018 4:09pm Pagei
The Analytics
Lifecycle Toolkit
(cid:2) (cid:2)
(cid:2)
TrimSize:6inx9in (cid:2) Nelson ffirs.tex V1-02/09/2018 4:09pm Pageii
Wiley & SAS Business
Series
TheWiley&SASBusinessSeriespresentsbooksthathelpsenior-level
managerswiththeircriticalmanagementdecisions.
TitlesintheWiley&SASBusinessSeriesinclude:
TheAnalyticHospitalityExecutivebyKellyA.McGuire
TheAnalyticsLifecycleToolkit:APracticalGuideforanEffectiveAnalytics
CapabilitybyGregoryS.Nelson
Analytics:TheAgileWaybyPhilSimon
AnalyticsinaBigDataWorld:TheEssentialGuidetoDataScienceandIts
ApplicationsbyBartBaesens
Bank Fraud: Using Technology to Combat Losses by Revathi
(cid:2) Subramanian (cid:2)
BigDataAnalytics:TurningBigDataintoBigMoneybyFrankOhlhorst
Big Data, Big Innovation: Enabling Competitive Differentiation through
BusinessAnalyticsbyEvanStubbs
BusinessAnalyticsforCustomerIntelligencebyGertLaursen
BusinessIntelligenceApplied:ImplementinganEffectiveInformationand
CommunicationsTechnologyInfrastructurebyMichaelGendron
Business Intelligence and the Cloud: Strategic Implementation Guide by
MichaelS.Gendron
Business Transformation: A Roadmap for Maximizing Organizational
InsightsbyAimanZeid
ConnectingOrganizationalSilos:TakingKnowledgeFlowManagementto
theNextLevelwithSocialMediabyFrankLeistner
Data-Driven Healthcare: How Analytics and BI Are Transforming the
IndustrybyLauraMadsen
Delivering Business Analytics: Practical Guidelines for Best Practice by
EvanStubbs
(cid:2)
TrimSize:6inx9in (cid:2) Nelson ffirs.tex V1-02/09/2018 4:09pm Pageiii
Demand-DrivenForecasting:AStructuredApproachtoForecasting,Second
EditionbyCharlesChase
Demand-Driven Inventory Optimization and Replenishment: Creating a
MoreEfficientSupplyChainbyRobertA.Davis
Developing Human Capital: Using Analytics to Plan and Optimize Your
LearningandDevelopmentInvestmentsbyGenePease,BarbaraBeres-
ford,andLewWalker
TheExecutive’sGuidetoEnterpriseSocialMediaStrategy:HowSocialNet-
worksAreRadicallyTransformingYourBusinessbyDavidThomasand
MikeBarlow
EconomicandBusinessForecasting:AnalyzingandInterpretingEconomet-
ric Results by John Silvia, Azhar Iqbal, Kaylyn Swankoski, Sarah
Watt,andSamBullard
Economic Modeling in the Post Great Recession Era: Incomplete Data,
Imperfect Markets by John Silvia, Azhar Iqbal, and Sarah Watt
House
(cid:2) EnhanceOil&GasExplorationwithDataDrivenGeophysicalandPetro- (cid:2)
physicalModelsbyKeithHoldawayandDuncanIrving
ForeignCurrencyFinancialReportingfromEurostoYentoYuan:AGuide
toFundamentalConceptsandPracticalApplicationsbyRobertRowan
HarnessOilandGasBigDatawithAnalytics:OptimizeExplorationand
ProductionwithDataDrivenModelsbyKeithHoldaway
HealthAnalytics:GainingtheInsightstoTransformHealthCarebyJason
Burke
HeuristicsinAnalytics:APracticalPerspectiveofWhatInfluencesOurAna-
lyticalWorldbyCarlosAndreReisPinheiroandFionaMcNeill
HumanCapitalAnalytics:HowtoHarnessthePotentialofYourOrgani-
zation’sGreatestAssetbyGenePease,BoyceByerly,andJacFitz-enz
Implement,Improve,andExpandYourStatewideLongitudinalDataSys-
tem:CreatingaCultureofDatainEducationbyJamieMcQuigganand
ArmisteadSapp
Intelligent Credit Scoring: Building and Implementing Better Credit Risk
Scorecards,SecondEditionbyNaeemSiddiqi
JMPConnectionsbyJohnWubbel
(cid:2)
TrimSize:6inx9in (cid:2) Nelson ffirs.tex V1-02/09/2018 4:09pm Pageiv
KillerAnalytics:Top20MetricsMissingfromYourBalanceSheetbyMark
Brown
MachineLearningforMarketers:HoldtheMathbyJimSterne
On-Camera Coach: Tools and Techniques for Business Professionals in a
Video-DrivenWorldbyKarinReed
APracticalGuidetoAnalyticsforGovernments:UsingBigDataforGood
byMarieLowman
Predictive Analytics for Human Resources by Jac Fitz-enz and John
MattoxII
Predictive Business Analytics: Forward-Looking Capabilities to Improve
BusinessPerformancebyLawrenceMaiselandGaryCokins
Profit Driven Business Analytics: A Practitioner’s Guide to Transforming
Big Data into Added Value by Wouter Verbeke, Cristian Bravo, and
BartBaesens
RetailAnalytics:TheSecretWeaponbyEmmettCox
Social Network Analysis in Telecommunications by Carlos Andre Reis
(cid:2) (cid:2)
Pinheiro
StatisticalThinking:ImprovingBusinessPerformance,SecondEdition by
RogerW.HoerlandRonaldD.Snee
StrategiesinBiomedicalDataScience:DrivingForceforInnovationbyJay
Etchings
Style&Statistics:TheArtofRetailAnalyticsbyBrittanyBullard
Taming the Big Data Tidal Wave: Finding Opportunities in Huge Data
StreamswithAdvancedAnalyticsbyBillFranks
TooBigtoIgnore:TheBusinessCaseforBigDatabyPhilSimon
Using Big Data Analytics: Turning Big Data into Big Money by Jared
Dean
The Value of Business Analytics: Identifying the Path to Profitability by
EvanStubbs
TheVisualOrganization:DataVisualization,BigData,andtheQuestfor
BetterDecisionsbyPhilSimon
WinwithAdvancedBusinessAnalytics:CreatingBusinessValuefromYour
DatabyJeanPaulIssonandJesseHarriott
For more information on any of the above titles, please visit www
.wiley.com.
(cid:2)
TrimSize:6inx9in (cid:2) Nelson ffirs.tex V1-02/09/2018 4:09pm Pagev
The Analytics
Lifecycle Toolkit
A Practical Guide for an Effective
Analytics Capability
Gregory S. Nelson
(cid:2) (cid:2)
(cid:2)
TrimSize:6inx9in (cid:2) Nelson ffirs.tex V1-02/09/2018 4:09pm Pagevi
Copyright©2018byJohnWiley&Sons,Inc.Allrightsreserved.
PublishedbyJohnWiley&Sons,Inc.,Hoboken,NewJersey.
PublishedsimultaneouslyinCanada.
Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,or
transmittedinanyformorbyanymeans,electronic,mechanical,photocopying,
recording,scanning,orotherwise,exceptaspermittedunderSection107or108of
the1976UnitedStatesCopyrightAct,withouteitherthepriorwrittenpermission
ofthePublisher,orauthorizationthroughpaymentoftheappropriateper-copyfeeto
theCopyrightClearanceCenter,Inc.,222RosewoodDrive,Danvers,MA01923,
[phone],fax[phone],orontheWebatwww.copyright.com.Requests
tothePublisherforpermissionshouldbeaddressedtothePermissionsDepartment,
JohnWiley&Sons,Inc.,111RiverStreet,Hoboken,NJ07030,[phone],
fax[phone],oronlineatwww.wiley.com/go/permissions.
LimitofLiability/DisclaimerofWarranty:Whilethepublisherandauthorhaveused
theirbesteffortsinpreparingthisbook,theymakenorepresentationsorwarranties
withrespecttotheaccuracyorcompletenessofthecontentsofthisbookand
specificallydisclaimanyimpliedwarrantiesofmerchantabilityorfitnessforaparticular
purpose.Nowarrantymaybecreatedorextendedbysalesrepresentativesorwritten
salesmaterials.Theadviceandstrategiescontainedhereinmaynotbesuitable
(cid:2) (cid:2)
foryoursituation.Youshouldconsultwithaprofessionalwhereappropriate.
Neitherthepublishernorauthorshallbeliableforanylossofprofitoranyother
commercialdamages,includingbutnotlimitedtospecial,incidental,consequential,
orotherdamages.
Forgeneralinformationonourotherproductsandservicesorfortechnicalsupport,
pleasecontactourCustomerCareDepartmentwithintheUnitedStatesat
[phone],outsidetheUnitedStatesat(317)572-3993,orfax(317)572-4002.
Wileypublishesinavarietyofprintandelectronicformatsandbyprint-on-demand.
Somematerialincludedwithstandardprintversionsofthisbookmaynotbeincluded
ine-booksorinprint-on-demand.IfthisbookreferstomediasuchasaCDorDVD
thatisnotincludedintheversionyoupurchased,youmaydownloadthismaterialat
http://booksupport.wiley.com.FormoreinformationaboutWileyproducts,visitwww
.wiley.com.
LibraryofCongressCataloging-in-PublicationDataisAvailable:
ISBN978-1-119-42506-9(Hardcover)
ISBN978-1-119-42509-0(ePDF)
ISBN978-1-119-42510-6(ePub)
CoverDesign:Wiley
CoverImage:©mattjeacock/GettyImages
PrintedintheUnitedStatesofAmerica.
10 9 8 7 6 5 4 3 2 1
(cid:2)
TrimSize:6inx9in (cid:2) Nelson ffirs.tex V1-02/09/2018 4:09pm Pagevii
ToNickandMaryLu,forshowingmewhatitmeanstobeapart
ofsomethingbiggerthanyourself.
(cid:2) (cid:2)
(cid:2)
(cid:2)
Contents
Preface xi
Acknowledgments xv
PART I THE FOUNDATION OF ANALYTICS 1
Chapter1 AnalyticsOverview 3
Chapter2 ThePeopleofAnalytics 38
Chapter3 OrganizationalContextforAnalytics 68
Chapter4 DataStrategy,Platforms,andArchitecture 95
PART II ANALYTICS LIFECYCLE BEST PRACTICES 127
(cid:2) (cid:2)
Chapter5 TheAnalyticsLifecycleToolkit 129
Chapter6 ProblemFraming 148
Chapter7 DataSensemaking 185
Chapter8 AnalyticsModelDevelopment 218
Chapter9 ResultsActivation 266
Chapter10 AnalyticsProductManagement 301
PART III SUSTAINING ANALYTICS SUCCESS 349
Chapter11 ActioningAnalytics 351
Chapter12 CoreCompetenciesforAnalyticsTeams 386
Chapter13 TheFutureofAnalytics 424
AbouttheAuthor 433
AbouttheCompanionWebSite 435
Index 437
ix
(cid:2)
TrimSize:6inx9in (cid:2) Nelson fpref.tex V1-02/09/2018 4:09pm Pagexi
Preface
The modern enterprise is often characterized as “data rich, but
information poor.” This challenge is exacerbated by the pure volume
and variety of data generated at the point of interaction (e.g., cus-
tomers, patients, suppliers) and careening outward. Whether you are
preparing, analyzing, presenting, or consuming data, having a strong
foundation in data and analytics is paramount for conveying ideas
effectively.
Inthisbook,Itranslatetheworldofbigdata,datascience,andana-
lyticsintoapractical,comprehensiveguidewhereyoucanexplorethe
artandscienceofanalyticsbestpracticesthroughaprovenframework
formanaginganalyticsteamsandprocesses.
Thefocusofthebookisoncreatingeffectiveandefficientanalytics
organizationsandprocessesinordertostrengthentheroleofdataand
(cid:2) (cid:2)
analyticsinproducingorganizationalsuccess.
When I started thinking about writing about this specific topic, it
wasprimarilyinresponsetothelackofinformationabout“thepeople
andprocess”sideofanalytics.Thatis,foroveradecade,authorshave
writtenabouttheconceptofanalytics,itsimportanceinbusiness,and
specific implementations of technologies such as Python, R, or SAS,
amongothers.However,thoseresourcesgenerallydonotaddressthe
tacticsofanalyticsmodeldevelopmentorbusinesscasedevelopment,
nordotheyaddresstheimpactofanalyticsonoperationalprocesses.
The issues that organizations have grappled with over the past
10 years since Tom Davenport and Jeanne Harris published their
seminal work CompetingonAnalytics (Davenport & Harris, 2007) have
shifted from “What problems can we solve with analytics?” to “How
do we find, nurture, and retain analytics professionals?” This shift
fromthe“what”tothe“how”supportsthebasicpremiseofthisbook.
I also think the timing is right for the book, as entire industries are
transforming themselves with the use of data and analytics. While
many organizations have solved the barriers of effectively using ana-
lyticsineverydayoperationsaswellasstrategicdecisionmaking,other
xi
(cid:2)