Narratives and Instructions are the Future of Driving Stronger Business Outcomes

Introduction

If you’re logging into your analytics dashboard and feeling more confused than enlightened, you’re not alone. According to a report by Gartner, only 35% of executives claim to regularly get value from their organization’s analytics investments. This is an alarming figure, given the rapid data proliferation we’re experiencing.

Imagine, you log in to your computer, and instead of being greeted by a cacophony of charts, graphs, and numbers that look like the instrument panel of a jet plane, you find a simple, clear narrative. It tells you exactly what’s happening in your business and what you should focus on today. Welcome to the future of data analytics—where dashboards are replaced by precise narratives and instructions that drive stronger business outcomes.

For more than a decade, I’ve seen the evolution and limitations of big data analytics while working at industry giants like Oracle and New Relic. The traditional dashboard, although visually attractive, often causes more problems than it solves. It’s time to look beyond this paradigm. Let’s delve into why dashboards are now outdated and explore the game-changing alternative that’s set to take over.

The Current State: Why Dashboards Have Failed Us

Overwhelming Complexity

A report by Harvard Business Review states that 70% to 80% of all business intelligence projects fail. This is alarming, especially when the primary interface for these projects is the dashboard. The abundance of widgets, colors, numbers, and graphs create a mosaic of complexity that confuses rather than clarifies.

Loss of Context

Forrester’s research shows that while 74% of firms aspire to be data-driven, only 29% can act on their analytics. Dashboards are notorious for stripping data of context, leaving viewers to make head or tails of isolated numbers.

Data is valuable only when it’s in context. Dashboards often strip data of this context, making it almost impossible to glean actionable insights. When senior leadership demands a specific number be placed on a dashboard, that metric often exists in isolation, devoid of its story or relevance.

High Costs with Low ROI

Maintaining these elaborate dashboards comes with a price—both monetary and cognitive. According to Gartner, businesses spend an average of $1.8 million per year on traditional dashboard tools, yet most of these dashboards are rarely used, leading to an abysmally low ROI.

The Future: Narratives and Instructions

According to the Journal of Statistical Software, narrative analysis can improve comprehension by up to 20%. When data is presented as a coherent narrative, complete with a beginning, middle, and end, it allows for a far richer understanding.

AI has been heralded as the savior of modern data analytics, it’s not just AI but how AI is applied that will make a difference. The future isn’t just about smarter algorithms; it’s about smarter communication of what those algorithms find. Here’s how narratives and instructions are shaping up to be the next frontier.

Precise Narratives Over Charts

Think of a great novel that you’ve read. It holds your attention because it tells a compelling story. Now, consider if business data could do the same—tell a story so compelling that it holds your attention and makes things clear. Narratives turn raw data into a coherent story, offering the context that’s often missing in traditional dashboards.

Actionable Instructions for Concrete Outcomes

A study by McKinsey reveals that companies that use actionable insights can generate profits up to 120% higher than their competitors. Data is powerful, but its real power lies in what you do with it—hence, the need for actionable instructions.

It’s one thing to understand your data; it’s another to know exactly what to do with that understanding. In comes the role of AI-generated actionable instructions. These serve as your business playbook, prescribing specific actions based on real-time data to achieve desired outcomes. No more paralysis by analysis!

Democratizing Data Understanding

Deloitte’s survey shows that just 20% of non-executive employees use analytics. When AI-generated narratives and instructions become the norm, understanding data is no longer exclusive to the analysts or executives.

When data is presented as a narrative along with actionable instructions, it becomes more accessible. You don’t have to be a data scientist to understand what’s going on. This democratization ensures that everyone in the organization, from the CEO to the frontline employees, can make data-backed decisions.

How to Implement Narrative and Instruction-Based Analytics

Transitioning from dashboards to a narrative and instruction-based model involves a structured approach:

1. Core Metrics Identification

Similar to the dashboard approach, the first step is identifying core metrics that are aligned with business goals. These metrics will serve as the protagonists of your data narrative.

2. Contextual Analysis

Utilize AI and machine learning to analyze these core metrics in context. Instead of simply showing a drop in quarterly sales, the AI can delve into market trends, seasonal impacts, and internal factors to give a 360-degree view.

3. Real-time Narration

Leverage AI algorithms to translate this context-rich analysis into easy-to-understand narratives that are updated in real-time.

4. Instructional Algorithms

Implement AI-generated algorithms to convert these narratives into actionable instructions that are easy to follow, specific, and time-bound.

5. User Training

Ensure that your team understands how to interpret and act on these narratives and instructions. Implement training sessions and create guides to facilitate this.

6. Feedback Loop

Establish a feedback mechanism where the effectiveness of the prescribed actions can be monitored and used for future refinements.

Conclusion

Dashboards were once a revolutionary concept, providing a visual representation of complex data. However, the business landscape has changed. We’re moving from an era of data visualization to an era of data understanding and actionability.

It’s time to retire the dashboards and their ill-fitting role in today’s data-driven culture. Narratives and instructions, powered by AI, are set to take center stage, offering a more holistic, actionable, and user-friendly approach to business analytics. By telling a story and offering actionable steps, we can make data analytics what it should be—an invaluable tool for driving better business decisions and outcomes.

Learn more at xenonlab.ai