Analysis: Commoditizing Analytics
Can analytics be a commodity? LucidEra's Pipeilne Healthcheck evaluates a company's sales process in 48 hours. Some experts say it's the new face of analytics.
- By Ted Cuzzillo
- January 21, 2009
BI should be more like owning a car: Just because you drive shouldn't mean you need a mechanic in the family. These days, the worst part of an oil change, for example, is the wait.
LucidEra's founder and VP of marketing Ken Rudin has used that analogy often to promote his 48-hour Pipeline Healthcheck's quick-lube-like ease. Lend him your data and he'll tell you how your sales process performs. Such a process "has its limits, but compared with Excel and Post-it Notes, it's a huge advance," Rubin claims.
Could this approach work in other domains in your business?
So far, LucidEra has done about 60 analyses, Rudin reports. A sample report he provided ran 30 pages filled with trends, observations, and warnings with simple, attractive charts, statements, and details. One slide ("Process: Process not being followed") told a brief story: Under a chart with a bold red square pointing out several numbers, it read, "20% of pipeline is expected to close in the past / This is a process issue / Identify which reps are the culprits." Another slide ("Pipeline: Aged Out Opportunities") told another story: "Aged Out Opportunities in the Next 30 Days / Impact: $4.7M," included supporting detail.
Rudin's customers can be split into two main types: those who want analytics but don't have time to do it, and those who just don't know how to do it. Once in a while, a prospect rejects the findings. They insist that their business is so complex or so unusual that standardized analytics couldn't possibly measure it.
Though it's occasionally true, Rudin said, he compares the objection to a medical patient rejecting a diagnosis because the doctor doesn't know his history. True, bodies may be different, says Rudin, but not different enough to invalidate a blood test. "More often it's because they don't like the results and don't want anyone to see them."
The principles at work and the objections Rudin hears would all seem to repeat if he offered healthchecks for other business functions.
"The more specific the field of inquiry," TDWI director of research Wayne Eckerson wrote me, "the more practical an idea this will be." An analyst's value is in the ability to know the data and processes well enough to glean less-than-obvious insights, so an outsourced analyst would have to ramp up fast -- unless the analyst is already an expert in an area. "Then all they need," according to Eckerson, "is time to extract and analyze the company's data and put it into a pre-defined report format that highlights relevant KPIs for that domain, and analyze it. This in essence what LucidEra does."
Former TDWI education director Dave Wells is actually enthusiastic about broadening the service -- what he calls analytics as commodity. LucidEra's "healthcheck," he said, is a prototype, adding that analytics is in the first stage of evolution. What's advanced today will be a commodity tomorrow.
"For some, [such a service] will be their first experience with analytics," Wells said. "For others, it'll be a chance to move away from building the foundation and be able to stretch it and build more meaningful stuff."
"The logic of [using analytics] is so powerful and so strong, that nature will take its course," he said. "The companies that don’t embrace analytics will go out of business or they're really damn lucky." The only question is whether you handcraft the analytics or buy it off the shelf.
"We figured out a long time ago in the build vs. buy debate that the fundamental rule is you buy for parity and you build for advantage. … Commoditize that off-the-shelf stuff so we don't spend our BI budget on what's repeatable," he said. Instead, "spend money on what differentiates."
Commoditization, along with agility and collaboration, he said, will define the next generation of analytics -- and Wells believes we don't have long to wait for that face to be recognized as a best practice.
With a service like LucidEra's and similar services sure to follow, you don't even have to endure the uncomfortable waiting room.