Realizing the Value Promise of Analytics
As markets and companies have emerged from the recent downturn, executives have looked to the future with concern. The slow and inconsistent recovery, combined with the disruptive effects of globalization, technological change, and regulation, has made it clear that what happened was not just another cyclical swing. It was reflective of a deeper economic and industrial reorganization.
As the tide has receded, it has left an increasingly competitive and erratic global business environment. There has been a lot of talk by executives and observers about a new normal characterized by
- greater velocity and magnitude of change,
- unprecedented technological, organizational and market complexity,
- more discriminating customers with greater willingness to shop the competition,
- sustained pressure to reduce costs and improve productivity, and
- the need to improve decision making under increased uncertainty.
This rapidly changing landscape exposes companies’ underlying weaknesses. These companies will succeed to the extent that they adapt to this new normal. They will need to transform their responses to risks and opportunities, doing more with less and meeting larger goals with greater agility. They will also need to embrace new capabilities that enable them to create new revenue streams as well as to engage more meaningfully with customers and other stakeholders.
Leaders seeking to respond to these shifts are increasingly looking to information and analytics. More information and more meaningful analytics are available to them than ever before. It is clear that decision-oriented capabilities have great power to not only enable companies to survive the new normal but to thrive in the opportunities created by it.
The foundational capabilities for managing information and deriving actionable insights have been around for decades. Since the early days of data warehouses and executive information systems, both business and IT leaders have sought to create value from data and reporting tools. These efforts have failed at an astounding rate.
As with other types of business integration and transformation programs, business intelligence, and data management efforts have regularly been unable to deliver on their promises 1http://www.rpreid.com/outlook/2014/10/the-cost-of-program-failure.. Similarly, succeeding with big data and analytics initiatives has been a coin toss 2Ron Bodkin, “The Big Data Wild West: The Good, the Bad and the Ugly,” Gigaon, 14 September 2013, https://gigaom.com/2013/09/14/the-big-data-wild-west-the-good-the-bad-and-the-ugly/ and Infochimps, “CIOs & Big Data: What Your IT Team Wants You to Know,” 2013, available at http://bigdata.infochimps.com/Portals/174427/docs/infochimps%20report%20-%20cios%20and%20big%20data%20report.pdf.. Jim Kaskade, CEO of Infochimps, has summarized, “We did a survey of 300 companies. Basically, I’ll give you the rules of thumb: 100 percent of the Big Data projects go over schedule, 100 percent go over budget, and half of them fail” 3In Loraine Lawson, “Three Reasons Big Data Projects Fail,” IT Business Edge, 19 June 2013, http://www.itbusinessedge.com/interviews/three-reasons-big-data-projects-fail.html..
There have simply been too many unanticipated challenges creating integrated and trustworthy sources of data, cross-functional alignment and governance have been too difficult to achieve, and reporting tools have been too hard to use and customize.
As Jeanne Harris has explained, executives feel like they have been to an amusement park. “There are a lot of smart kids who are dragging you onto this exciting ride, and they guarantee you there are going to be thrills a-plenty – and there are. There are a lot of sharp rises and falls and hairpin turns. You get off; but here’s the problem – at the end you’re a little bit queasy, you’re a little bit poorer, and you’ve arrived back at almost exactly the same place you were before” 4Jeanne Harris, Getting Big Benefits from Big Data, Strata Conference, 27 February 2013, http://strataconf.com/strata2013/public/schedule/speaker/151423..
There is no question that innovations in big data and analytics are a critical part of creating competitive differentiation. Organizations have unprecedented opportunities to integrate high-quality information and generate transformational insights. There is tremendous potential for better decision making, improved performance and more valuable interactions with customers and other stakeholders.
Turning these opportunities into real and sustained value will require better approaches to delivering change. The pattern of IT-driven access to data and tools is not enough. Integrated enterprise capabilities must go beyond technology and applications to enable new organizational and information management competencies. Making these capabilities real will require getting serious about strategic change 5See my previous post, Getting Serious about Program Success.. Leaders may need to call on the best they can bring to bear, there is no secret formula for success. The key is in the fundamentals of program leadership, such as
- defining clear and believable value propositions,
- honestly identifying and addressing the obstacles to success, and
- generating meaningful engagement around objectives, alignment and adoption 6Sponsors who are truly engaged do more than show up at steering committee meetings; they show up at team members’ desks. They are active champions of the program, contributing to resolution of issues, and investing their leadership capital in securing the cooperation.
Because the fundamentals are basic, change leaders often give them only surface treatment. However, successfully executing on them can be very difficult. To a great extent, this is why so many programs fail. Executives who address them seriously will create capabilities that transform their organizations. These transformative competencies are what generate sustained differentiation and value, even in the midst of ongoing volatility.
Footnotes [ + ]
|2.||↑||Ron Bodkin, “The Big Data Wild West: The Good, the Bad and the Ugly,” Gigaon, 14 September 2013, https://gigaom.com/2013/09/14/the-big-data-wild-west-the-good-the-bad-and-the-ugly/ and Infochimps, “CIOs & Big Data: What Your IT Team Wants You to Know,” 2013, available at http://bigdata.infochimps.com/Portals/174427/docs/infochimps%20report%20-%20cios%20and%20big%20data%20report.pdf.|
|3.||↑||In Loraine Lawson, “Three Reasons Big Data Projects Fail,” IT Business Edge, 19 June 2013, http://www.itbusinessedge.com/interviews/three-reasons-big-data-projects-fail.html.|
|4.||↑||Jeanne Harris, Getting Big Benefits from Big Data, Strata Conference, 27 February 2013, http://strataconf.com/strata2013/public/schedule/speaker/151423.|
|5.||↑||See my previous post, Getting Serious about Program Success.|
|6.||↑||Sponsors who are truly engaged do more than show up at steering committee meetings; they show up at team members’ desks. They are active champions of the program, contributing to resolution of issues, and investing their leadership capital in securing the cooperation.|