You don’t need to wait for the stars to align in order to realize the full value from your investments in analytics initiatives of all sorts.
Instead, what you need to do—and it’s within your power here and now—is to align several key dimensions of your organization’s analytics and data strategies. By doing so, you will be able to power a steady stream of data-driven insights and smarter actions across all levels in your organizations and extended value chains.
That’s the chief takeaway from a newly published research study from IBM’s Institute for Business Value (IBV). The report, entitled “Analytics: A blueprint for value: Converting big data and analytics insights into results,” grounds its recommendations in multivariate statistical analysis of data-deep findings from IBV’s comprehensive survey of 900 business and IT decision makers across 70 countries worldwide.
IBV’s chief recommendations spell out nine key roadmap “levers” that your organization must grasp in order to achieve full value from analytics initiatives of any scale or scope. The following guidelines, which crystallize the approaches of the organizations that led in demonstrable payback from their data analytics initiatives, apply equally well to big data, small data, or any other scale or scope of deployment:
- Culture: Boost the availability and use of data and analytics within your organization
- Data: Enable greater structure and formality in your organization’s data governance and data security processes.
- Expertise: Deepen the pool of data management and analytic skills within your extended value chain
- Funding: Enforce financial discipline in your processes for funding data analytics initiatives
- Measurement: Forecast, track, and measure the impact of analytics on your business outcomes
- Platform: Provide integrated capabilities on a strategic data analytic platform
- Source of value: Drive analytic-infused actions and decisions that generate desired results
- Sponsorship: Obtain the support and involvement of key executive sponsors and stakeholders
- Trust: Cultivate confidence throughout your business culture in the trustworthiness and utility of the data-driven insights that your investments enable
The IBV study reports that your organization must pull all of these levers in a coordinated fashion in order to realize full value from your data analytics assets. “There is a strong correlation between organizations that excel at these levers and those that create the greatest value from analytics. The levers–all present at a consistently high level of capability within Leader organizations–are interrelated. Taken individually, each of the levers does not equal one-ninth of the solution. Organizations that invest in these nine levers–with particular attention to the symbiotic relationships that exist–can accelerate value creation, simplify analytics implementation and realize value from analytic investments.”
Nevertheless, users must tune their data analytics strategies with the realization that some levers have greater influence on their ability to deliver value. The IBV study categories those three levels of high-value impact as:
- Enablers: Levers that form the basis for big data and analytics. The study places Sources of Value, Measurement, and Platform in this category.
- Drivers: Levers that are needed to realize value from data and analytics, and for which lack of sophistication in within these levers will impede value creation. Culture, Data, and Trust are in this category.
- Amplifiers: Levers that boost value creation. Sponsorship, Funding, and Expertise fit this description.
What follows are a few key call-outs from the report’s discussion of the Enabler levers:
- Sources of Value: “A majority of all respondents reported growth-driven expansion efforts as the source of value from their current analytics investments. Seventy-five percent of Leaders, and 70 percent of all other respondents, attributed the value of analytics solutions to their ability to increase revenues, increase the speed and accuracy of decisions, and generate innovative ideas. Only 25 percent of Leaders said the primary source of value was from cost-containment activities such as reducing operational costs and improving efficiency.”
- Measurement: “Measurement is important in demonstrating a return on investment for analytics initiatives. We found that a majority of all organizations realize a return on their analytic investments within the first 12 months following implementation. More than 40 percent of Leaders report realizing a return within the first 6 months, while another 25 percent report a return between 6 and 12 months.”
- Platform: “Sixty percent of Leaders have predictive analytic capabilities, as well as simulation (55 percent) and optimization (67 percent) capabilities. These skills enable Leaders to look beyond what happened yesterday and what is happening today, and begin to understand how changes in customer preferences, market forces, natural phenomenon or regulations might impact their operations and revenues tomorrow. By comparison, just over half (52 percent) of all other respondents have predictive capabilities, while fewer than half have simulation (45 percent) or optimization (49 percent) skills.”
For strategic business and IT decision makers, there is much more in the report that you will find useful in benchmarking your data analytics initiatives and re-aligning your organization’s roadmap. I strongly recommend this IBV study, which follows on previous studies that the institute has conducted in conjunction with IBM’s Business Analytics and Optimization (BAO) organization.