by Scott Jeffries, Solution Manager, SAP

Depending on who you believe, an investment in analytics can yield up to a 10x return. But that’s a little like saying the batting average for Major League Baseball is .245, when in actuality it ranges from .197 to a phenomenal .336 – an outlier contributed by Buster Posey, of the World Series champion San Francisco Giants. (You can probably figure out who my team is!)

That average represents a pretty big difference in results, and the same thing happens with investments in analytics. Why are the return swings so wide with analytics investments? I believe it’s largely because defined business outcomes are lacking when analytics are deployed.

In addition to the financial returns we all like to talk about, there’s lots of statistics around data volumes, iPad activations, tweets, customer engagement, etc. But what do they all mean? All of this information helps to frame the current environment and need for analytics, but does it really help you decide how to use analytics to make a difference in your business? I want to share some ideas about how to approach the issue so that you can be a “Buster Posey” with your analytics.

Get on Deck with Use Cases

Start with the business and identify use cases that will drive financial impact – revenue growth, cost reduction, or margin improvement. Remember that improving employee efficiency, though beneficial, is unlikely to drive a meaningful financial impact.

Once you’ve identified those use cases, categorize them by expected business outcomes – and get very specific about this:

  • reduce ground transportation costs
  • increase customer retention from high revenue/high credit score customers
  • reduce discounts to profit destroyers, etc.

We refer to this process as “applied analytics” –  analytics applied to a use case with an identified business outcome.  It’s important to understand that the use case does not need to represent a “home run” to create value.  Many runs can be scored with singles and doubles in baseball. Likewise, some of the most effective uses of analytics have been applied to a single cost line item or revenue attribute.

Now that you’ve picked your use case or cases, you need data.  Don’t confine yourself to what resides within the four walls of the company. Think about what’s necessary to get the business outcome that you desire. Today there are many technologies that allow you to leverage the data you need versus the data you can get, so free your mind.

Lastly, research existing solutions on the market that can address your use case and shorten your time to value. At SAP, we have pre-built industry and line-of-business analytic applications and rapid deployment solutions that address specific business scenarios. In addition, we have analytic platforms, like the SAP BusinessObjects Business Intelligence platform, analytics edition, that can be the basis for you to create your own applied analytics.

So have fun with analytics, and start swinging away to create champion-worthy value for your company.


 Scott Jeffries is currently a Solution Manager in the Analytics organization at SAP and was previously a member of the SAP Value Engineering team.  Scott works with customers in many industries to assess their business needs, including the financial and intangible value of implementing analytics capabilities across the enterprise. @SLJAnalytics