Now it’s time to rank and prioritize our metrics after we’ve identified them all. To do that, we’ll talk about a business concept known as core competencies.

Core competencies are the essential skills and knowledge that a company needs to be able to compete in its chosen market. They are the foundation on which a company’s competitive advantage is built.

Measuring core competencies and prioritizing the core metrics enable an organization to determine which companies should have guardrails or target thresholds that we must keep in mind.

We can evaluate a business’s core competencies by utilizing the VRIO framework. VRIO is an acronym for Valuable, Rare, Inimitable, and Organized.

When the core competency arising from a combination of resources and capabilities satisfies the four requirements, the created competitive advantage will be sustainable. If the standards are lower, then the benefit will be less.

Let’s go back to our example of lowering prices to improve customer satisfaction. Core competencies can tell us how to value any increase in customer stratification vs the loss in revenue.

If our business excels in brand recognition, customer service, or product innovation, we would want to keep these measures high even if it means sacrificing short-term profits. On the other hand, if our core competencies are in areas such as cost-efficiency or operational effectiveness, then we would want to focus on these measures to improve our bottom line.

By understanding our core competencies, we can make more strategic decisions about where to focus our resources in order to achieve our desired results.

Another essential situation is where analytics determines how a company continues to track standard metrics when a metric is highly volatile week-over-week. The use of data dashboard analytics can prove to be extremely valuable at that point because a large fluctuation in the value of the metric isn’t by itself enough to escalate concern.

So the dashboard would have to include information about the recent volatility of the metric, as well as its actual value.

Effective dashboards require strategy and thoughtfulness since analysts create dashboards with outcome specifics in mind; therefore, the design and the KPIs you choose are highly consequential.

In the scenario above, where volatility happens weekly, data scientists can write SQL queries to help determine the cause; however, there are cases where there are multiple unknown external factors, and the data continues to change. This situation is when creating a dashboard that efficiently organizes the flow of information can be helpful.

The dashboard created ensures continuous efficiency in the knowledge that is getting to people in real time. Organizations want to know they are using the correct metrics and effectively understanding the source of truth in the collected information.

That’s where data dashboarding data analytics is most beneficial. It can determine how we prioritize the metrics that are most important to more people at a company versus less critical metrics.

Let’s now dive into some case studies where you can apply the knowledge learned in this course to determine what metrics are essential to the businesses studied.