How to Integrate Data and Analytics into Every Part of Your Organization
Many conversations about data and analytics (D&A) start by focusing on technology.
Having the right tools is critically important, but too often executives overlook or underestimate
the significance of the peopleand organizational components required to build a successful D&A function.
When that happens, D&A initiatives can falter — not delivering the
insights needed to drive the organization forward or inspiring confidence
in the actions required to do so. The stakes are high, with International
Data Corporation estimating that global business investments in D&A
will surpass $200 billion a year by 2020.
A robust, successful D&A function encompasses more than a stack of
technologies, or a few people isolated on one floor of the building. D&A
should be the pulse of the organization, incorporated into all key
decisions across sales, marketing, supply chain, customer experience,
and other core functions.
What’s the best way to build effective D&A capabilities? Start by
developing a strategy across the entire enterprise that includes a clear
understanding of what you hope to accomplish and how success will be
Before starting any new data analysis initiative, ask: Is the goal to help
improve business performance? Jumpstart process and cost efficiency?
Drive strategy and accelerate change? Increase market share? Innovate
more effectively? All of the above?
When answering these questions, it’s important to understand that D&A
teams are not data warehouses that perform back-office functions. Your
D&A function should be a key contributor to the development and
execution of the business strategy by supplying insights into key areas,
such as employees and customers, unmet market opportunities,
emerging trends in the external environment, and more.
Leadership teams must recognize that being successful will take
courage, because once they embark on the journey, the insights from
data analytics will often point to the need for decisions that could require
a course correction. Leaders need to be honest with themselves about
their willingness to incorporate the insights into their decision
making, and hold themselves and their teams accountable for doing so.
Consider the case of a large global life sciences company that spent a
significant sum of money building an advanced analytics platform
without first determining what it was supposed to do. Executives
allowed their technology team to acquire a lot of products, but no one
understood what the advanced tools were supposed to accomplish or
how to use them. Fortunately, executives recognized the problem before
it was too late, conducting an enterprise-wide needs assessment and
rebuilding the platform in a way that inspired confidence in its ability to
drive efficiency and support business transformation.
In another case, a major financial services organization built a robust
technology platform based on stakeholder needs. But after building it,
executives soon discovered they lacked the organizational structure and
people to use the platform successfully. Once they addressed those
needs, the company was able to use the great platform to achieve
significant savings in operating costs.
According to KPMG’s 2016 CIO Survey, data analytics is the most indemand
technology skill for the second year running, but nearly 40% of
IT leaders say they suffer from shortfalls in skills in this critical area.
What’s more, less than 25% of organizations feel that their data and
analytics maturity has reached a level where it has actually optimized
business outcomes, according to International Data Corporation.
Formally structured systems, processes, and people devoted to D&A can
be a competitive advantage, but clearly many organizations are missing
this big opportunity. In our experience, companies that build a D&A
capability meeting their business needs have teams of data and software
engineers who are skilled in the use of big data and data scientists who
are wholly focused on a D&A initiative.
While structures vary, the team should be seamlessly integrated with the
company’s existing providers and consumers of D&A, operating in
cohesion with non-D&A colleagues — people who really understand
both the business challenges and how the business works — to set and
work toward realistic and relevant strategic goals. The teams should also
have the complete support of executive leadership, and their goals
should be fully aligned with the business strategy.
In an age where data is created on a scale far beyond the human mind’s
ability to process it, business leaders need D&A they can trust to inform
their most important decisions — not just to reduce costs but also to
achieve growth. And the best will use D&A to anticipate what their
customers will want or need before they even know they want or need it.