Web Analytics – ‘It’s Not About the Math’

When Tom Davenport keynoted the Conversion Conference in San Francisco this week, he set out to inspire ecommerce teams to focus on the business, not on the analytics themselves. Quoting Carl Kemp, the chief mathematician at Intel, ‘It’s not about the math… it’s about relationships with the business,’ Tom encouraged web analysts and eMarketers to embrace bigger business challenges and look beyond their current horizons. Rather than focusing on the numbers, he advocated building relationships with business management by offering solutions to business challenges.

For his groupies, Davenport has neared deity status. As President’s Chair in Information Technology and Management at Babson College, he teaches MBAs and executives about decision-making and analytics. But he’s best known for legitimizing and making analytics relevant to business with his breakthrough HBR article and subsequent book, Competing on Analytics: The New Science of Winning.

In short, he made analytics sexy to business leaders for the first time.

Davenport showed, in Competing on Analytics, how companies including Netflix, Google, Amazon, Harrah’s, and Capital One have focused their organizations on analytics as a critical competence. By making analytics an integral part of the way these companies run, they make better decisions, optimize processes and achieve strategic advantage that enabled them to become leaders in their markets. These companies test, measure and refine on a continuous basis.

But for the majority of companies, analytics are not central to the business, and Davenport found a receptive audience eager to learn new ways of engaging senior management. His recipe was simple: focus on helping the business to achieve ambitious outcomes which would not be possible without analytics.

In listening to his keynote, I was reminded of the Australian mine that told the AkzoNobel chemical company that their explosives were no longer required—the mine had found a cheaper supplier. The AkzoNobel salesman was not deterred, and investigating further, he learned that the big problem for the mine was not the price of the explosives, but rather that all explosives produce unpredictable results. What the mine really needed was explosives that produced rocks of a uniform size.

The salesman worked with his analysts to produce a computer model that calculated precisely how much explosive to use and where to place it in order to produce uniformed sized rocks. Rather than simply present the data, AkzoNobel proposed a new service to deliver the ‘right sized rocks.’ The mine was so impressed that AkzoNobel went on to not only supply explosives to the mine again but also to place and detonate them for the mine in order to deliver rocks of the right size.

This is ‘outcome thinking,’ focusing on the business outcome to solve the business problem. It would have been easy to focus on analytic numbers, reports or the presentation of data in an attempt to win the deal back. But solving a bigger problem is infinitely more powerful and places analytics at the heart of business strategy.

While at the Conversion Conference I was able to interview Davenport and ask him specifically how we can apply his thinking to ecommerce and web analytics. In my next blog, you can see this interview in the form of a video. Make sure you don’t miss it by signing up today using either RSS or by sign up using Feedburner to get this blog delivered to you by email.