First, lets understand the true definition of “Analytics”
“Analytics is the discovery and communication of meaningful patterns in data. Especially valuable in areas rich with recorded information, analytics relies on the simultaneous application of statistics, computer programming and operations research to quantify performance.”
The piece that I always stress is “Performance”. When measuring performance, there is a clear definition of what is good or bad.
- Text diagnostics: Summary of what is happening based on simple or complex business rules.
If I was to take the example from above, a useful Text diagnostic would be comparing current to previous time period.
Material goods had the highest increase of 10% from Nov 2012 (18%) to Dec 2012 (25%) making up $2000 of Dec 2012 total expenses of $7000.
- Alert Diagnostics: Based on simple or complex performance rules (most commonly used in dashboards). For example
Highlighting calculated information using color, size, or position is extremely effective means for communication. Once again, it all boils down to highlighting what is out of a performance band, an outlier that can provide the greatest value to someone who needs to uncover “Why” things are going wrong.