Da Facto: Thinking about BI recently

Monday, June 8, 2009

Thinking about BI recently

It occurred to me that using a BI tool is a hard way to gain insight. You are limited by your own imagination. I like hypothesis driven analysis, but I think you can do a much better job in providing insight if you understand a bit of econometrics (Logit and OLS). You can simply run a stepwise regression on the variable you are trying to understand (say Life Time Value of a customer) and see what pops out (say the interaction of age and education). Once you see what variables pop, you can then use BI tools to illustrate the point. Critical piece, make sure you run all of the interactions. That is where the cool stuff lies.

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Recomended Books

Thinking, Fast and Slow My Phd was in Behavioral Economics and Kahneman co-invented the field. This books sums up Kahneman's observations over an almost 50 year career. Amazing, though not for the uninitiated, overveiw of how people actually make decisions. Competing on Analytics This is a great read if your organization is just starting to realize the importance of analytics as a competitive advantage.

Visual Display of Quantitative Information This is a classic book on displaying, well, quantitative data. If you want people to pay attention to your results, you need to present your analyses well.

The Pyrimid Principle Another classic book on how to communicate complex ideas in a business environment. Not cheap but very worthwhile. The author is a former McKinsey consultant who had a major impact on how the Firm conducts its written communication with clients.

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The book links go through my Amazon Associates account. All proceeds to go for my kids education, buy them soldering irons, lathes, drill presses, that kind of thing.