Using #Tableau To Help Businesses Make More Money


Why are businesses using analytics? Why do they want consultants to look at their data and tell them what to do in the future? Obviously there can be many answers to those questions. There are many problems to solve. However, all of the answers, one way or another, all lead back to one simple fact: businesses exist to provide services and to make money.

This inextricable insight becomes clear to you the longer that you are a consultant. Your experience allows you to develop laser focus, to cut through the buzzwords and the BS.You learn that it is imperative for all businesses grow financially and in capabilities (human and otherwise) over time. A consultant’s creed is this: If you can show a client ways to make more money, you will get more work.

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Ultimately business consulting is about the money. People do not necessarily want to say it, but it is always there, lurking just beneath the surface of our daily business transactions.Therefore, my goal for today is to give an example of how I use Tableau to very quickly give clients what they want.Think of Tom Cruise screaming in the phone “Show me the money“. Think of Cuba Gooding, Jr doing those little dance moves during that scene and that will set the stage for this blog post (if you didn’t just click that link, go do it now as it will make your day just a little bit better!).

Using Tableau to Find the Money

The good news, the great news, no, the superb news is that Tableau can help you find the money.You just need to develop the skills and experience to make it happen. The bad news is, if you are Tableau lover like I am, that this technique is not about building beautiful dashboards and fancy graphics. It isn’t about exploring vast quantities of data and using story points to develop complicated and multi-faceted explanations. It is about clarity, simplicity, and using Tableau graphics to show your client how to make more money in the most straight-forward way possible.

 A Little Background To How I Find The Money

I am a process-improvement consultant. This means that I have worked on quick-hitting projects for a wide array of companies in different industries including petroleum, manufacturing, health care, education, telecommunications, retail, insurance, and many others, both in the US and abroad. The one thing that they all have in common is the need for more money. It doesn’t matter if the money is in US dollars or Euro dollars, it is our goal to find more of it. Tableau is the tool I use to find the money.

I could show many examples in this post where very clear money-making insights have directly been found with Tableau. The problem is that if I did that, I’d be unemployed because I violated business confidentiality agreements and I’d have to use Tableau to look for my own money! Instead, I will show a single anonymous example that illustrates how I use Tableau to help clients make more money.

Past success stories are buried in the data archives of all businesses. Because businesses change how they operate over time, successful practices are lost and unsuccessful practices are inadvertently begun. Sometimes these changes cause the margin (profit) to move up and down over time. However, many managers don’t realize how these changes will affect their business because they are real-time focused and they cannot predict the future. These insights are only gained when a historical data analysis is conducted. What? What exactly does that mean?

A historical data analysis is a comprehensive look at business performance over time. It is a long-term, self-examination that most businesses fail to do. Every business is collecting the data to do this type of analysis but many of them are not doing it because they do not realize that it is possible to do or they do not have the expertise to do it. So how is this done using Tableau?

A client will provide to me between 5 and 10 years of their margin data to examine. In many cases, the client will have to struggle to recover this data but usually it can be done. I focus on margin because I want to give them more of it in the future. Clients will want to bog me down in all sorts of other data that may or may not help me find the money. The key to successfully finding the money quickly is to do the right types of analysis with Tableau to zoom into the money-making opportunities. Once you see them in the margin signal, you have to reverse-engineer the causes that lead to increased margin and that might involve additional data analysis. That sounds complicated, and in some cases it might be harder than others, but there are always quick-hitting insights that can be determined to help every business. Some people refer to identifying the quick-hitters as “picking the low-hanging fruit”.

The Example of Finding the Money-Making Nugget

Many people think that advanced statistics and data mining approaches are needed to find the money. In some cases, that might be true. However, I have learned through real-world experience that visual analytics (i.e., what Tableau kicks-a$$ at doing) is superb at finding the money with operations as simple as performing time series analysis. Let me show you what I mean.

Figure 1 is an example of a couple of dual-axis, time series charts produced in Tableau and stripped to their bare essentials (so the example can’t be identified). On the left axis, is a measure of a fairly volatile business activity that appears to change randomly over time and it is shown with monthly dots along the orange lines. Typically, the more that this activity occurs, the less money the company makes. On the right axis, is a measure of either the monthly profit (top graph) or cumulative profit (bottom graph) over this same 10-year time period. This chart makes it very easy to see that when the activity happens, dramatic impacts are made to the “bottom-line” (i.e., profit is lost). So with these two charts, I was able to visualize a strong correlation between these business events and the profit that was gained and lost. The lower chart reminded me of trying to climb a mountain. Sometimes you slide back down when the slope gets too steep, which in this case is when that dreaded “business activity” rears its ugly head. Therefore, to find the money, I had to take the next step to see what I could tell the client about those business activities and what they could do to mitigate the losses related to those.

Figure 1 – Time series analysis used to determine correlation between events and financial performance.

Using the same data, I simply changed my time perspective thanks to the brilliance of Tableau. Although the Figure 1 analysis showed me the behavior over time, it didn’t show me why or specifically when during the year that the losses were occurring. By switching the view from a pure time-series perspective to a different type of time-based analysis, a huge insight was gained that was worth millions of dollars to this client. Figure 2 shows that for this client, profit is lost during a very specific time of the year (i.e., randomly placed month D shown in the graphic). I can’t discuss why that is the case, but once the client understood this relationship, they were able to make changes to how they conducted their business to mitigate the losses related to the business conditions. This realization was only possible by performing the historical data analysis to identify this specific cause and effect relationship. There was no need for advanced statistics on this project.

Figure 2 - Analysis by month showed that random month D was the only month where the average profit over the time period was negative.

Figure 2 – Analysis by month showed that random month D was the only month where the average profit over the time period was negative.

With a few easy to create Tableau graphics, I was able to find these insights within a day of working with this client’s data (millions of records). Why does this work so well across so many businesses and industries? Because Tableau gives us the flexibility to ask all kinds of question about data and it gives us great visuals to see the answers to those questions.

There is no abiguity that remains once a problem is attacked in this way. Tableau allows us to shift focus, change directions and perspectives with a simple flick of a mouse or drag and drop operation. Tableau gives you Derrick Rose type quickness in working with data, just like Derrick has when he decides to drive to the basket. Experience counts, too, in being able to do these things. By staying focused on the money and using Tableau to gain key insights, you too can help your clients grow into the future with more money in their pockets.

Additional Thoughts

After completing this piece, I continued to think of the examples I have found that allowed companies to increase profits. The Tableau techniques used in some of these cases varied from the one shown above, which is a time series based approach. I thought it would be worth mentioning some of the other techniques I have used to find the money.

The other techniques I use include geographically-based (spatial) analysis, anomaly based analysis, and multiple regression analysis. The geographical analysis is great for discovering regional bias that might exist across a company enterprise and can be used to immediately impact the bottom line. The anomaly based analysis identifies previously unknown, positive margin generation events that can be repeated. The multiple regression analysis typically couples business performance data with a very powerful set of demographic and business variables that uncover why company performance varies across the enterprise.

Depending upon the nature of a business, any or all of these techniques can be employed to find the money that is just waiting to be found. In retrospect, I realize that I have really enjoyed doing this type of work through the years and all of it was possible due to Tableau.

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