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Does attacking the biggest challenge carry the biggest risk of failure? Paradoxically, no — because big problems command attention and incite action. And as survey participants told us, management bandwidth is a top obstacle. When the stakes are high, the best talent will leap at the opportunity to get involved.
It’s extraordinarily hard for people to change from making decisions based on personal experience to making them from data — especially when that data counters the prevailing common wisdom. But upsetting the status quo is much easier when everyone can see how it could contribute to a major goal. With a potential big reward in sight, a significant effort is easier to justify, and people across functions and levels are better able to support it.
A sharp focus on major opportunities can excite an organization with new possibilities. “Where are the best places to advertise to get consumers into our store?” was the looming, time-critical challenge for Best Buy. “How can we reduce the fraud and abuse that are draining scarce money and resources?” is a common refrain among government agencies around the globe.
Conversely, don’t start doing analytics without strategic business direction, as these efforts are likely to stall. Not only does it waste resources, it risks creating widespread skepticism about the real value of analytics.
In our discussions with business executives, we have repeatedly heard that analytics aligned to a significant organizational challenge makes it easier to overcome a wide range of obstacles. Respondents cited many challenges, and none can be discounted or minimized: Executive sponsorship of analytics projects, data quality and access, governance, skills and culture all matter and need to be addressed in time. But when overtaken by the momentum of a single big idea and potentially game-changing insight, obstacles like these get swept into the wake of change rather than drowning the effort.
A process for inspiring change Despite analytics opportunities that are as close as the nearest data warehouse, the inability to understand how analytics can solve business challenges is the most daunting obstacle to adoption. And with management attention focused on other priorities, valuable analytics opportunities can be crowded out by business as usual.
The single greatest opportunity — and challenge — to speed adoption of analytics is to embed them into daily operations. Organizations that use analytics to answer big, make-it-or-break-it challenges have the greatest opportunity to meet their business goals. The answer needs to be simple and unambiguous to work for time-pressed managers. Based on our analysis, we recommend the process-application-data-insight-embed technique. It is a simple means by which an organization can operationalize insights drawn from data. (See Figure 5.)
The PADIE technique helps users across the organization understand from the start the full initiative as it applies to a specific business challenge. This technique enables business and analytic teams to work together to create analytic models based on use cases that show analytics in action.
IBM CASE STUDY: Tackling Health Care Fraud Leads to Sweeping Reforms
With healthcare costs spiraling, the North Carolina Department of health and human services resolved to curb suspected fraud and abuse. After an analytics pilot of the state’s Medicaid records revealed numerous anomalies, the state moved quickly to deploy an advanced mathematical model to detect Medicaid problems within its system of two million users.2 A new “Medicaid SWAT team” of special investigators is beginning to review cases flagged as suspicious by the analytic models.3
Legislative budget officials estimated that the state could recoup $37 million in the program’s first year, which easily offset its initial investment several times over. While most of the money would be reimbursed to Medicaid, the penalties would add needed dollars to North Carolina public schools.4
The state is now mobilizing resources to pursue the unexpectedly large volume of fraud and abuse cases uncovered. Prompted by the results, the governor announced plans for a full suite of anti-fraud moves, including tougher laws, a public awareness campaign to encourage people to report fraud and abuse, and funding to increase the state’s staff of investigators.5
This is part 3 of 10 from the 2010 New Intelligent Enterprise Global Executive Study and Research Project.
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REFERENCES
2. R. Christenson, “N.C. and IBM Team up to Ferret out Medicaid Fraud,” March 25, 2010.
3. “Perdue Begins Medicaid Fraud, Waste Prevention Effort,” March 24, 2010.
4. B. Balfour, “Ten Recommendations for North Carolina’s Budget Reform and Advisory Commission (BRAC),” John W Pope Civitas Institute, February 10, 2010.
5. “Perdue Begins Medicaid Fraud, Waste Prevention Effort.”
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