Every product manager knows that analytics is all the rage in almost every company now. The CEO has been reading those magazine articles that say now that databases have grown large enough to hold virtually every piece of product data that the company collects and servers have become cheap enough to throw at any number crunching problem. However, what seems to have been forgotten in the current “analytics madness” is that when it comes to your product, if you don’t know what you are looking for, then you won’t know what to do with what you get…
Just Exactly What Are Analytics?
Sure, we’ve all heard about analytics – stories about how companies have used analytics to save money on their products, get to market faster, etc. are all the rage right now. However, push aside all of the hype and just exactly what is analytics?
If we had to come up with a definition that would cover as many of the situations in which analytics will be used in the next few years, then it’s going to have to be fairly broad. I like to define analytics as consisting of the technologies, applications, people, and processes that allow a firm to transform their product data into actionable insights.
In order to do this, a company has to perform four tasks:
- Collect, manage, clean, and store product data
- Extract and analyze product data
- Report on the results of the analysis
- Make decisions based on the reports and take actions
Product managers need to realize that the real benefit of this wave of interest in analytics is for the company to be able to perform real-time data analysis. The company is going to have to be able to do this even as they struggle with more and more data feeds that are becoming more and more complex.
As the product manager, you are going to have to be willing to lead several new initiatives in the area of analytics. The characteristics and capabilities of these new initiatives will include:
- Dealing with real-time data sources
- Merging multiple data sources
- Creating predictions – not just reports
- Supporting the entire company with information about your product, not just a few users
- Automating the analytics process
What Are The Key Trends Happening In Analytics?
As product manager you will have limited time. Is analytics important enough for you to be spending time on it or will it vanish overnight? The good / bad news is that it appears as though analytics are here to stay. The business benefits are too powerful for this trend to just fade away.
Companies that are becoming interested in analytics are doing so for one of three main reasons. The first is the traditional reason that they view analytics as allowing them to achieve performance improvements. Other firms are investigating implementing analytics because they see it as a way to both identify and implement ways to cut product costs. Finally, as competition between firms once again starts to heat up, firms are seeing analytics as a way for them to improve their customer service and boost product sales.
Analytics and business intelligence has been around for a number of years. What makes this wave of interest appear to have legs is that it’s getting support from upstairs. A recent report stated that at 23% of the firms that were interviewed, the CEO was the driving force behind the analytics efforts.
What Does All Of This Mean For You?
No matter how you look at it, product managers have got to be involved in the roll out of the new generation of analytics within their company in the support of their products. In order to do this successfully, product managers are going to have to make sure that they fully understand just exactly what analytics are.
In a nutshell, analytics allow a company to transform their product data into actionable insights. This means that real-time data sources are going to have to be leveraged and multiple data sources are going to have to be consulted. In implementing and using an analytics solution, product managers are going to have to manage hardware, software, services, processes, and people.
Is this effort really going to be worth it? The answer appears to be yes. The people who get paid to peer into the future are telling us that the area of analytics is set to explode over the next few years. Knowing this, product managers need to take steps today to get ready.
Question For You: Should product managers focus on using analytics to improve product performance or reduce costs?
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What We’ll Be Talking About Next Time
The one thing that every product manager wants more than anything else in this world is for our product to be a success — this should almost be a part of the product development definition. We are willing to work very hard to make this happen. However, maybe we’ve got it all wrong – it’s not what we do that will make our product a success, but rather what our customers do. Let’s take a look and see how we can let them show us what we need to be doing…