Take a moment to read that title again: Reporting Is Not Analytics. We wanted to get that out in the open right away. If you’ve been reading our site, you may have noticed that Heller Consulting works with CRM strategy and technology. You may have also noticed that we share and present at many of the nonprofit events and conferences throughout the year. This means we get to talk to many people in the nonprofit community about CRM, the data an effective CRM contains, and the variety of ways that data can benefit an organization. Once thing we’ve noticed is when we start to talk about analytics, many people happily tell us something like, “Oh yes, analytics are important to us. I get daily reports from this or that department and a weekly summary from these departments, and each quarter we roll everything up into org-wide summary reports.” “That is super!” we say, and then we are compelled to politely clarify, “…but it’s important to understand that reporting is not analytics. Reporting is a form of analytics, but a “light” version as practiced by most organizations.” It’s the confused looks combined with the next several minutes of the discussion that inspired this post and the ones to follow in the coming months. We hope they help clarify some of the ideas and concepts surrounding analytics and business intelligence.
Data-driven reporting is essential for any organization to be their most efficient and effective. The more current and up-to-date the data can be, the better. Well-sourced reports can display current direct response rates, call-center activity, fundraising totals, constituent engagement statistics and any number of things that have happened in your organization. The important point to note here is all the information in any report is something that has happened in the past. Even the most real-time reporting is showing data on actions or events that have already gone by. As I said above, data-driven reporting is essential, but unfortunately many organizations stop there. They end up always looking into the past and making reactionary decisions, then reviewing more reports to see if they were right. Most nonprofits haven’t outlined a strategy for changing how their organization functions or engages with constituents based on the results of the reports. This is a primary distinction between reporting and analytics.
The difference between reporting and analytics boils down how much you learn. Reporting looks at the past and simply tells you what happened. Analytics looks at the data and tells you why things happened. It dives deeper and correlates data points across the entirety of the organization’s database (and potentially outside data points). It also combines reporting data with an organization’s key performance indicators to evaluate the past, discovering patterns within the data to reveal deeper insights into behavior. The value of analytics is to provide business intelligence (BI) that identifies underlying trends that can be used to guide decision makers’ strategy for the future.
A common example is a standard campaign report. Many of us have looked at Campaign report and maybe even broke it down by time frame and type of donor. From there we make a decision for next year’s campaign goals. However, wouldn’t it be great to know why certain types of donors gave more than others. Are they more engaged in the organization’s social media? Do they come to friend raiser’s and give online later, but don’t come to fundraisers? Or vice versa? With this deeper level of analysis, not only can your organization make decisions on next year’s campaign goals but also how to adjust your strategy for engaging with your donors to make your campaigns more successful.
Clarifying the difference between reporting and analytics is essential for any organization exploring business intelligence tools. Analyzing the valuable data contained in their CRM can bring benefits across every department. At Heller we have been helping nonprofit organizations create effective strategies to get the most from technology and their CRM data. In 2014, we published a white paper that compared several then current BI tools. Since that time, the landscape has changed significantly, but we realized that as organizations reviewed the possibilities of the tools, they often encountered barriers simply due to their unfamiliarity with the core concepts of analytics.
In response, in October of 2016 we released “Introduction to Analytics for Nonprofit Executives.” In this paper we outline the steps we highly recommend when embarking on an analytics initiative at a nonprofit organization. We cover the concepts, benefits, and barriers that are part of any initiative, and share a basic roadmap on how to ensure a successful effort.
To provide more useful information, in the coming months we will be researching the current market for business intelligence tools and will feature the top analytic tools being used by nonprofits today. We will look at the possibilities and pitfalls of each product, and provide insights on the types of organizations it may be best suited for. Be sure to follow us here to be the first to find out about each new release.
If your organization is considering investing in a business intelligence tool, we recommend that you start with an analytics initiative to define your goals and priorities before selecting and purchasing any tool. You’ll find that this process will reap tangible benefits to your organization, and help your key team members and executives identify the critical questions you need to answer. The papers above and this coming series of posts can help you get started, and Heller Consulting is more than happy to guide you as well. Please contact us to discuss how these powerful tools can benefit your organization.
Are you currently using business intelligence or analytics tools? Where do you find the most value? Biggest challenges? Let us know in the comments below.