For the past two decades (at least), the prioritization of data collection and its related analysis – a field commonly known as "analytics" – has surged. It’s the reason that a statistics nerd like me has a job in banking! For some businesses that were already successful before the analytics boom, it may be a struggle to understand what all the fuss is about.
Let’s jump to an industry that almost every American knows and loves: Sports – and specifically, football. Currently, there’s a heated debate between the analytics community and football purists regarding how heavily a team should rely on the run game. Stat-heads will tell you that a passing play is far more efficient; traditionalists will say that you need to establish the run to win. So which side is right? Well, potentially both – and the reasons why illustrate how this concept can apply to pretty much any business.
Take our beloved Wisconsin Badgers, as an example. While passing the ball may be far more efficient, the Badgers are in a unique situation considering that their primary strengths are at offensive line and running back. In this case, it doesn’t matter if passing the ball is technically the more efficient game plan, because the Badgers would be giving up way too much to get away from their strength and, ultimately, their identity. Were the quarterback position the focal point of the team, then it would make sense to more heavily utilize the efficient pass play.
Most successful companies have been around for a long time, and it’s a common misconception that adopting relatively "new" analytics practices must change how business is done. At the end of the day, analytics is not about being right or wrong, it’s about helping find optimization in current processes. Optimization is most accurately defined as finding the best use of a situation or resource. At State Bank of Cross Plains, we utilize analytics to enhance the customer relationship and make sure that, as a bank, we’re providing the best service possible for all our customers’ financial needs. The path paved by analytics should always lead to optimization.
Take advantage of analytics to find out what your business does best. When a company stays true to its initial strengths and applies analytics to further optimize its processes and strategies, it’s a win-win scenario for everyone involved.