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BusinessMetrics.md

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BUSINESS METRICS

As a business analyst, it is important to analyze and convey your company's performance using specific metrics in each of the following areas:

  • Marketing
  • Growth
  • Sales
  • Finance

Business metrics related to finances, customers, and website

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Important Topics

  • Key Performance Indicators: We will start with a discussion about key performance indicators and how it differs by industries.

  • Business Process Flow: Then we will proceed to go through the business process flow across various business divisions. This will provide the context for learning about the business metrics.

  • Business metric: We will take on each business area, such as marketing and growth, and introduce you to a metric commonly used to measure success in that business area. We will discuss what each means, and how to calculate it. We will practice calculating the metrics and applying the metrics, and when and where to use the metric. To do this, we will focus on 3 main elements related to metrics:

    • Evaluate important business metrics
    • Interpret and analyze these metrics
    • Create visualizations of these metrics

  • Distribution and central tendency: We will circle back to the topic of data distribution that you learned about in the previous lesson, and why paying attention to the distribution of the data and to the choice of measure of central tendency is important.

  • Grouping data: We will end with a discussion on how to look at the data across groups, cohorts, and time.

KEY PERFORMANCE INDICATORS (KPI)

Businesses need to be able to track how they are performing on key goals or objectives - whether they are growing number of customers, bringing down their costs, increasing revenue on an ongoing basis, and myriad others.

Key Performance Indicators or KPIs are how they measure their success on each of their key business objectives.

Which KPI to use?

The decision regarding which KPI a business analyst should use depends on several factors, including which industry or domain they are working in, which business function they are focusing on, and the type of data they have available to them.

Asking Data Questions

The KPIs you use will be determined by the questions you need to ask. As a business analyst, you are tasked with gathering the appropriate data to help solve business problems. To get to that solution, you will need to:

  • Identify what needs to change
  • Communicate this change to stakeholders in clear manageable chunks of data

How to Ask the Questions

There are several steps needed to determine the questions to ask—

  1. Identify the business goal and objectives.
  2. Narrow down the type of data needed to answer questions.
  3. Identify the KPIs that will be useful to show whether you are making progress on your business goal.
  4. Conduct the data analysis using the KPIs and use visualizations as part of the analysis.
  5. Provide recommendations and findings based on the completed data analysis.
  6. Create succinct and visual presentations for the stakeholders.