Action "0" when building an analytic organization

I saw this article by Peter Graham "Building the Analytic Organization". Peter lays out some steps to create an analytic organization but I think he has failed to list the first one! Action "0" must be to establish why you want to use analytics - what is the business purpose? This might be at an organization level or you might have several more local objectives but you must have them. Otherwise you will just be collecting and analyzing still more data without a clear business purpose. This also applies to each individual analytic model - what is it's business purpose is the first question to ask. This focus on a particular business objective, a unique analytic competency, is at the heart of Tom Davenport's book Competing on Analytics.

The other point I wanted to make about the article is to refer readers to this post (and related discussion) on whether analytics should be centralized or not. Me I think centralization is a consequence of success, not a pre-requisite but I also think the jury is still out.

Lastly, if you want some basic information on predictive analytics, check out the Predictive Analytics FAQ.

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