As you read this, your organization is probably wasting money by letting data insights spoil.
That’s the alarming conclusion from a recent Forrester report. Each insight is useful for only a limited amount of time, so those organizations that don’t closely track their insights’ shelf lives may be making poor decisions because of outdated information.
Given that nearly half of all firms surveyed were planning on increasing their investment in analytics, the consequences of using out-of-date insights could be substantial. However, by becoming familiar with the four types of insights and taking a few preventative steps, organizations can be better prepared to avoid having insights go bad and become too dated to use.
Four types of insight
Forrester outlines four types of insights, each with their own expiration dates and uses:
- Real-time insights arevalid for sub-seconds or seconds and are typically acted upon by automated systems. Example: cart-based recommendations online.
- Operational insights are valid for seconds to hours and usually relate to business processes. Example: delivery schedule optimization for shipments.
- Performance insights are valid for hours or weeks and usually relate to key performance indicators. Example: understanding and addressing product quality issues.
- Strategic insights are valid for weeks, months or years and usually relate to executive-level decisions. Example: developing a new product line based on market opportunities.
Many organizations are already well-versed in the extraction and application of operational and performance insights, using the “measure, course correct and strategize” management approach popular for the last several decades. While these types of insight should still be closely monitored for signs they are no longer useful, more emphasis is now being put on real-time and strategic insights.
Data for real-time insights is at high risk for expiring because it is generated so quickly, then changes, then expires. The proper systems must be put in place not only for capturing this data, but also application of these insights to ensure old recommendations don’t result in useless, or worse yet, harmful decisions.
Strategic insights face an opposite, but equally troubling, problem. Without fully understanding the longevity of the strategic insights they have, some organizations are discarding them too early. In doing so, they miss out on the value that those insights could have provided for some of the company’s most important decisions.
Making the best use of your perishable data
Fortunately, Forrester also lists a few steps organizations can take to better understand and accommodate the perishability of their insights.
Most importantly, you should dump or retarget outdated insights. Start by asking end users if they’re receiving reports with insights that can’t be used. If so, you should identify whether the data is being analyzed too slowly, the report is being delivered too slowly or the data changes before a decision can be made. Based on that information, you can decide to decommission the report, use those insights at a higher tier (such as performance rather than operational) or begin to enact Forrester’s next suggestion.
If you find your insights to often be outdated, accelerating your data-to-insights-to-action process is crucial. There are a few ways to accomplish this based on where you observe breakdowns in your current process: data being analyzed too slowly may imply that your analytics technology should be improved, whereas reports being delivered too slowly might call for re-evaluating business processes or reprioritizing more timely distribution of insights once they are ready.
Finally, take a holistic look at your organization to fully understand each type of report and insight you’re creating and categorize them based on the four types noted above. Introduce policies and additional technology for each according to their expiration dates and unique requirements.
To get started, check out the Forrester report “Perishable Insights — Stop Wasting Money On Unactionable Analytics” for guidance on establishing the foundation for a perishable insights framework. With data being generated more quickly than it ever has before, now is the perfect time to check your insights’ expiration date and eliminate the unnecessary waste of critical knowledge.