You can hardly go anywhere or read anything anymore without hearing or seeing something about Big Data. People who aren’t in banking, insurance retail, or consumer marketing could be forgiven for thinking Big Data is like the second coming of Godzilla or something: “Big Data. It’s Everywhere!” But while high-consumer-based merchandisers have been building their businesses around data for quite some time, financial-services operations are just starting to dip their toes in the proverbial water, relatively speaking.

We could engage in the philosophical debate about whether data analytics constitutes a strategy or a tactic. However, there may not be a right or wrong side in that debate. In fact, some organizations might choose to enjoy some of the advantages of data analytics as a tactical approach, even as they re-tool their operating models to make analytics more of a strategic underpinning. Here’s how:

• Tactical approach: Let’s say you decide to track the performance of one particular product. Maybe it’s an insurance line of business. Maybe it’s a consumer-loan offering. And let’s say you have limited tracking capabilities; but you can track the customer segment to which the product is sold, the channel through which it’s sold, the geography in which it’s sold, and the person who sold it. Just having that limited amount of information would enable you to know if the product was a potential winner or loser.
• Strategic approach: Given what you learned from your tactical experiment, you may decide to extend data analytics farther across the enterprise — or at least beyond one department or a single line of business. At the far end of the spectrum, you may opt to aggregate and analyze data from all your core and ancillary systems and data sources to get a closer look at overall operational performance, to better understand customers, to recognize successful products, to see trends that lead to opportunities, to identify and recognize high-performing employees, to make better marketing decisions, to refine pricing, and to decrease losses and expenses.

Clichés are True

The bottom line is this: You can employ analytics productively as a tactic. Every time you do, you’ll learn something. But you’ll employ analytics more productively if you see your way to employing it as the strategic underpinning for operations and decision-making.

According to the cliché, you can’t manage what you don’t measure. And we’ll agree that there are metrics at least as important as numbers. But if you employ analytics strategically to monitor, measure, and manage all your numbers, many other metrics will take care of themselves.