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IBV study on analytics, part eight: Amplify

February 4, 2014

How to provide the momentum and capabilities to transform insights into actions

This is part eight of our series on the findings and text from the IBM Institute for Business Value’s latest study and paper “Analytics: A blueprint for value - Converting big data and analytics insights into results” from my colleagues Fred Balboni, Glenn Finch, Cathy Rodenbeck Reese and Rebecca Shockley. 

In part seven we discussed how trust and organizational confidence impacts an organization’s ability to create value from analytics. In this part we will look at the final level of impact, Amplify, and the first of its three levers, Sponsorship.

Amplify

This final level of impact consists of levers that boost value creation. These levers provide the momentum and capabilities to transform insights into actions that positively impact an organization’s bottom line. Levers at this level are Sponsorship, Funding and Expertise (see Figure 10). 

fig10.jpg

To amplify the value created from data and analytics, organizations need business-driven sponsorship to guide a common agenda through business unit actions, and financial rigor within a collaborative funding process to support enterprise-level analytics investments. And it comes as no surprise that the final lever that changes the value equation for analytics investments involves experts and analysts within the organization, and especially the level of focus put on the development of their skills.

Taken together, these levers help create an environment that supports the use of data and analytics to solve meaningful business challenges—propelling an organization from merely competitive to achieving competitive advantage.

Sponsorship

Executive support and involvement

Executive support and involvement in analytics are key to value creation. In organizations with low levels of executive support, analytics implementations are hampered by lack of funding, resources and follow-through. 

In sharp contrast with other organizations, the majority of business executives within Leader organizations (56 percent) oversee the use of data and analytics within their own departments, guided by an enterprise-level strategy, common policies and metrics and standardized methodologies. Two-thirds of these Leaders have business unit executives work across silos to develop the strategy that directs the use of analytics; they define organizational data policies, define performance metrics and drive common methodologies across the organization. Yet still, the decisions about how to best implement those strategies, policies and metrics are made at the business unit level (see Figure 11). In non-Leader organizations, almost half of business executives (49 percent) work with an analytic strategy set and implemented by IT, while another third of respondents (31 percent) develop their own business unit strategy; only 20 percent of non-Leader organizations have an enterprise-level strategy.

fig11.jpgWhile we have seen examples of successful, analytically driven organizations that operate from a grass-roots motivation, our research consistently finds that most organizations require top-down executive-driven leadership. Even better than executive sponsors are executive advocates: those who believe in the power of analytics and are passionate about instilling a data-driven culture.

This was the case when Alejandro Valenzuela, CEO of Grupo Financiero Banorte, announced a 10 year transformation to become the bank with the best customer experience and service not only in Mexico, but around the world through smarter use of advanced technologies.

Mexico’s Grupo Financiero Banorte is seeking to make its banking arm, Banorte-Ixe, a sector leader in customer experience and service—on par with the best in the world—as well as a leading example of innovation. To support its goal of deeply understanding client needs and thereby delivering superior customer service, the bank turned to big data and analytics solutions.

“At Banorte-Ixe, we start today with a solid business foundation that has positioned us as the third bank in the Mexican market. We know it is time to move to the next level and evolve totally focused on our clients,” he said.  The bank plans to develop and offer personalized products and services better suited for each customer’s unique needs. The bank’s new customer-centric banking model is expected to improve efficiencies to nearly 50 percent and offer a return on equity of over 20 percent. The model establishes corporate governance to monitor investments in new projects and the re-routing of existing spending to control costs, while positioning the bank to differentiate itself using big data, analytics, cloud computing and social business.

In part nine, we will look at the second Amplify lever, Funding, and the financial rigor needed in the analytics funding process.

Catch up on the entire series so far with parts one through seven:

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