EXE CU TIVE E D G E
queue managers to think of anomalies
about their business. The following questions may encourage managers to think
along the right lines:
• What types of vendors indicate
possible risk for your business?
• Is there a typical size/number of
transactions per week/month that
are typical of your business?
• What policies/guidelines are in place
that you typically find employees
skirting to avoid hassle or make
transactions easier? (For example,
breaking expenses in half to avoid
expense limits that require a long
pre-approval process)
With the answers to these questions
in mind, the analyst can gain a better understanding of what to be looking for, and
perhaps more importantly, what not to be
looking for in results.
Sometimes an even easier way to get
to this information is for the analyst to deliver the first set of reports and then collect
feedback in real time. Managers typically
don’t understand statistical calculations,
but they do understand well-delivered results and have a keen eye for identifying
when something is amiss. Based on reactions to initial reports, the analyst can adjust
the queries/algorithms to take into account
the newly shared insights. For example, a
retail analyst may identify that 75 percent
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A N A LY T I C S - M A G A Z I N E . O R G
more cash refunds for product were issued
at register No. 4 than at any other register.
This is a potential red flag for fraudulent
returns perpetrated by the cash register
operator. However, in looking at the report,
the manager may know that to keep customers moving quickly through check-out,
refunds are directed to the customer service desk (home to register No. 4), where
these transactions are handled whenever
possible to prevent delaying other customers. This operational policy needs to
be taken into account in the analysis so
that the “normal” volume for register No. 4
refunds is appropriately adjusted.
By spending some time up-front and in
the first few cycles of analysis to account
for nuances in the business, analysts can
set up much more valuable reports and
avoid time and energy spent on mislabeled
red flags.
LOOK BEYOND OPERATIONAL
ANALYSIS
Leveraging analytics for operational
analysis is a great place to start due to the
quick ROI and powerful insights yielded in
a short time. However, as in the example of
the Oakland A’s, the savviest organizations
should use analytics for both operational
and strategic insights. Once organizations
become comfortable with operational analysis to deliver insights for better day-today decision-making, it is easy to fall into
W W W. I N F O R M S . O R G