Moving Forward with Analytics

This is part 10 of 13 from “Analytics: The Widening Divide,” a report on the findings of the 2011 New Intelligent Enterprise Global Executive Study and Research Project.

In this study, we have laid out three competencies based on our analysis of how Aspirational, Experienced and Transformed organizations use analytics, and what they were able to achieve competitively. The challenge, however, is typically not in finding the business case; it’s in identifying the starting point and creating a plan. To help organizations begin and reach their goals, we make the following suggestions based on our experience with a broad spectrum of organizations in multiple industries:

Recommendation 1: Assess your analytics sophistication

Recommendation 2: Improve your analytics competencies

Recommendation 3: Use an information agenda to connect your path to your competencies.

Recommendation 1: Assess your analytics sophistication

How close is your reality to the vision of your organization transformed by analytics? Consider whether some functions or some lines of business are farther along than others, and bring people together to share aspirations and concerns as they relate to analytics. Explore the big business challenges that can be addressed by analytics and evaluate together your organization’s readiness to address them. Figures 1 and 12 contain information to help you assess your level of analytics sophistication and understand next steps.

Aspirational — start with the most important metrics. You may have a vision for analytics, but have not made it part of an information agenda, with an analytics strategy that is measurable and can be acted upon. Data management is ad hoc, not part of a governance system, while spreadsheets and standardized reports capture all your organization’s analytical activity. Business leaders across levels should launch efforts to select business challenges that can be addressed analytically and set specific objectives for doing so. Dashboards and scorecards should be used to monitor performance against these targets.

Experienced — understand your path. If you have made some progress toward analytical transformation, determine which path you have taken — Specialized or Collaborative? Use Figure 12 to assess your organization’s strengths and weaknesses. Play to your strengths but remediate your weaknesses. If you’re pursuing analytics projects but avoiding internal conflicts over data standards, find out how other organizations have negotiated these shoals. If you’re putting all of your resources into establishing or meeting enterprise data standards, start developing analytics skills and tools to reap value from the information you have. Get support for acquiring tools and skills that will bring state-of-the-art analytical capabilities into your organization.

Transformed — look ahead. If your organization already has an integrated information platform as well as a robust set of tools and talent, you probably have a culture where information is accessible, abundant and constantly scrutinized for possible actions. The need here will be to continuously refresh your information agenda and stay attuned to unexpected challenges: new competitors and customer expectations; emerging digital business models; and the capture of big data, much of it unstructured and rapidly streaming through a digitally connected world. Another key is to create consistency in the level of analytics use and skills with your organization by targeting areas that may be lagging behind.

Recommendation 2: Improve your analytics competencies

Having assessed your path, focus on the capabilities within each competency to drive improvements. If you’re on the Collaborative path, you will need to work more on developing analytics skills and tools. If you are on the Specialized path, you will need to develop a strong information management platform and orient your culture to the use of data. On either path, set regular reviews for assessing progress in all competencies.

Information management. A strong information foundation makes high-quality information accessible to all who need it. What steps are you taking to help ensure that employees have the data and tools to do their jobs and make decisions that support the business? Determine what’s holding people back from using available information. Is it too difficult to digest? Too old to be useful? Too inconsistent? Do sources need to be more transparent? Look also at levels of segmentation — are they too broad or too narrow, and are users free to redefine them?

Questions to consider for improving information management competencies

  • What do you need to do to have everyone in your organization agree on the definition of key data such as “customer” or “on-time delivery”?
  • How can you make sure everyone trusts their most critical data? Is it traceable?
  • What can you do to increase collaboration among executives so they can support integrated and shared data?

Analytics skills and tools. Analytics specialists may have advanced skills and tools, but requirements and priorities are best determined by business specialists. Real competence in this area requires a partnership between those who excel at analytics and those who understand business implications. How can these partnerships be improved? Do the statisticians understand your business? Do business leaders appreciate the value the specialists bring? And are skills being transferred to local analysts to expand the capacity for future analytics efforts?

Questions to consider for improving analytics skills and tools

  • How effective is your organization at attracting and developing the analytics skills it needs?
  • What incentives are in place for analytical talent to mentor others?
  • How prepared is your organization to integrate emerging analytical tools into the business?

Data-oriented culture. Insights gained through analytics can create a repository of strategic assets as valuable as your databases. But if those insights aren’t used, their value is never realized. Does your organization encourage employees to come forward with new ideas? And how likely are any of those ideas to be adopted? What happens when new ideas challenge current assumptions about the market, or how the business operates? And are key executives setting the example by visibly using facts derived from analytics to make key decisions?

Questions to consider for building a data-oriented culture

  • How structured is your process for applying analytics to business strategy?
  • Are insights about customers, including history and value to the organization, shared with everyone who interacts with them?
  • Is analytics consistently guiding both strategy and operations?

The amount you invest in each of these competencies will depend upon your level of sophistication. But mastery of all three is needed to achieve sustainable competitive advantage.

Recommendation 3: Use an information agenda to connect your path to your competencies

Applying Recommendations 1 and 2 will enable you to assess your current level of analytics sophistication and develop a plan to improve your competencies. Recommendation 3, using an information agenda, puts you in the best position to get started and maintain momentum by aligning information technology to analytics strategy. An information agenda provides the balancing mechanism for acquiring and developing capabilities across all three competencies and across the enterprise.

The information agenda contains four interconnected areas: business strategies and objectives; project roadmaps; information infrastructure; and governance of data management and tools. It begins with the articulation of business strategies and objectives to anchor all analytics initiatives in business value. From these strategies, it is imperative to identify the most important projects and initiatives, which may include: cross selling, cost reduction, increasing customer loyalty, fraud reduction and assessing risk in light of operational metrics.

These mandated initiatives form the basis of a multi-phased, multi-year plan to realize the business benefits derived through analytics. Technology plans must be thoroughly assessed against the business and analytics plan to determine infrastructure gaps. Existing IT capabilities must be fully vetted in light of required analytics capabilities. With a fully solidified plan from both business and IT, executives across the enterprise can make informed decisions on how to optimize allocation of scarce resources.

In developing their information agendas, organizations often find these questions useful to consider:

  • What are the most pressing business priorities?
  • How can analytics make a difference?
  • What infrastructure is needed for analytics to be effective?
  • How can our organization and culture make the most of our investments in analytics?

Rigorous review of project delivery progress and business contribution is paramount. In addition to an aligned business and IT plan, having a business-driven enterprise governance of data, information and analytic tools is an essential component of the information agenda. Governance often begins by establishing specific roles to help ensure data quality for analytics initiatives. A collaborative group of business leaders needs to be convened to provide sustained governance with key responsibilities that include setting enterprisewide data standards, prioritizing and selecting analytics projects, and monitoring measurements.

Most importantly, an information agenda is essential for providing benchmarks and outcomes to evaluate progress in developing competencies at each step along the way. It helps determine whether IT is supporting the business strategy effectively, and whether that strategy is understandable to those who must implement it. It identifies the analytical techniques needed to implement specific programs and defines metrics for assessing the outcome of those efforts. Just as importantly, it encompasses governance structures — business rules and standards — that support, rather than hinder, the ability to manage information in its various forms. By tying these elements together, the information agenda can provide a solid organizational foundation for achieving enduring competitive advantage with analytics.