The Value of Business Analytics: Identifying the Path to Profitability

ROLE OF THE MEASUREMENT FRAMEWORK

Delivering initiatives is often difficult. Managers need to deal with high levels of uncertainty and they are often working with fewer resources than would be ideal. Effective project management almost demands a ruthless approach when it comes to prioritizing activities. Limiting scope creep is not optional; it is mandatory.

Under this delivery pressure, why would a manager commit to the additional work of creating a measurement framework? After all, every hour of effort spent tracking measures is an hour that could be spent on something else. This is an especially valid question given that a measurement framework does not directly relate to value creation or risk mitigation.

While a simple view may suggest that it is extra effort for little return, a measurement framework plays an essential role. As stated earlier, it helps the team:

• Justify ongoing investment
• Optimize internal activities
• Establish and defend priorities

Organizations are in a constant battle against scarcity—at any given time, there are normally many more opportunities than there is capital. From a strategic point of view, business analytics initiatives are simply one of many potential sources of return. Although they align well against short-term value creation and the creation of competitive advantage, they still need to be prioritized against every other potential initiative. Without a measurement framework, it is impossible to demonstrate real and sustainable value creation, ...