How to List Business Objectives for Predictive Analytics
Presumably, to prepare for the analysis of the data you’ve collected, you’ve already sat down with the business mangers and collected the objectives they’re after. Now you have to go into detail, evaluate what information sources will help achieve the objectives, and choose the variables you’ll analyze for operational use.
Understanding what the stakeholders really want from the project is challenging; you may encounter multiple competing needs as well as limitations on what can be realistically done.
For this stage, you and the intended recipient of the results have to roll up your sleeves and brainstorm potential information sources. The goal is to determine what information, from which sources, will be relevant to reaching the type of concrete outcome that will provide true value for both the business and the customer.
Without this in-the-trenches activity, your results may be no more than academic — of little practical value to your client. You may uncover fascinating inferences from (say) the accessory division’s second-quarter sales records — and discover just how likely cross-dressers who wear flat shoes are to purchase faux leather purses — but this will fall on deaf ears if the accessories division is discontinuing its faux leather product line next quarter.
A business objective can be quantifiable and objective — for example, identify two currently unknown major customer groups with a greater-than-50-percent likelihood of churning in the next six months or identify three supplier groups in Asia with decreasing delivery timeframes over the next five years. You might also list more subjective goals such as provide valuable insights into the effectiveness of customer rewards incentives programs.
In the subjective cases, be sure to define what you mean by valuable.
How to identify related objectives
Typically, there will be many subsets of business questions that the customer would like to address — any and all of which can provide insights into the main question. For example, the primary business goal might be to identify unhappy customers before they churn (move to a competing product).
Related business questions could be: How many times does a customer abandon a shopping cart online before purchasing from another online retailer? Does decreasing the threshold for free shipping from $100 to $75 prevent churn?
|How do we increase print book sales?||What percentage of people who bought or downloaded a fiction e-book in FY12 then bought a print fiction paperback in FY13?|
|How do we predict the effect of health-based decisions on fitness-related products more accurately?||If customers are buying fewer French fries this year, will they buy more or fewer yoga mats next year?|
|How will a new tablet affect sales of existing digital products?||Are iPad users less likely to purchase laptops?|
|How to collect user requirements|
Okay, suppose the high-level objectives have been documented and now you’re moving into the details. What are the project requirements and timeframes you’ll need to fulfill and follow? What are the requirements for your business, project, system, models, and data?
In order to avoid mismatched expectations, project managers should meet with all relevant groups in the client department. For marketing, this could include social media marketing managers, marketing analytics specialists, or database marketing managers. Information sources to specify can include (for example) customer lists, budgets, schedules and other logistics.
Thorough documentation — and key management sign-off — are critical to ensure that everyone is embarking on the coming intensive effort with the same understanding, commitment, and expectations.