Module 2 · Data Analytics Foundations
How businesses use data
Where data comes from in a company, how each team uses it, and what a KPI is.
About 20 minutes
The problem
A new analyst joins Kolanut and asks for "the data". The answer is: which data? Sales keeps orders. The warehouse tracks stock. Finance holds invoices and payments. HR has staff records and attendance. Each team uses its own data to run its own part of the business, and the most useful questions usually need two or more of them together.
The concept
Every business activity leaves a record. Some common ones:
| Team | Data it produces | Decisions it supports |
|---|---|---|
| Sales | Orders, customers, prices, discounts | Which customers to visit, which products to push |
| Operations | Deliveries, stock levels, routes | How much to reorder, where to position trucks |
| Finance | Invoices, payments, costs | Who to chase for payment, where money is being lost |
| HR | Staff, salaries, attendance, leave | Hiring plans, where people are leaving |
| Marketing | Campaigns, website visits, enquiries | Which channels bring customers |
A KPI (key performance indicator) is a number a business watches regularly because it shows whether things are going well. A good KPI is:
- Clearly defined. Everyone calculates it the same way.
- Tied to a goal. It moves when the business gets better or worse.
- Actionable. Someone can do something when it changes.
Some KPIs you'll meet often:
| KPI | Calculation |
|---|---|
| Revenue | Sum of sales value in a period |
| Growth rate | (This period − last period) ÷ last period × 100 |
| Average order value | Revenue ÷ number of orders |
| On-time delivery rate | Deliveries on time ÷ all deliveries × 100 |
| Staff turnover | People who left ÷ average headcount × 100 |
| Collection rate | Invoices paid ÷ invoices issued × 100 |
Example
Three businesses, three uses of data:
- A distributor (Kolanut) compares revenue by region each month. When one region drops, the sales manager calls the rep covering it before the quarter is lost.
- A logistics company tracks on-time delivery by route. A route that is late 30% of the time gets a new schedule or a different carrier.
- A law firm watches outstanding invoices. Partners get a weekly list of clients whose invoices are more than 30 days overdue.
In each case the data isn't collected for analysis. It exists because the business runs. Analytics makes it useful a second time.
Walkthrough
Let's calculate two KPIs by hand for one month at Kolanut.
In a month, Kolanut delivered 1,240 orders. 62 arrived later than promised. Revenue was ₦48,000,000.
On-time delivery rate
- On-time deliveries = 1,240 − 62 = 1,178.
- Divide by all deliveries: 1,178 ÷ 1,240 = 0.95.
- Multiply by 100: 95%.
Average order value
- Revenue ÷ orders = 48,000,000 ÷ 1,240.
- = ₦38,710 (rounded to the nearest naira).
Practice
Practice
The next month, Kolanut delivered 1,500 orders and 90 were late. What was the on-time delivery rate, as a percentage? (Type just the number, for example 92.5.)
Practice
Kolanut had 75 staff at the start of the year and 80 at the end (an average headcount of 77.5). 8 people left during the year. What was staff turnover, to one decimal place?
Check your understanding
Answer every question to check.