This is the age of analytics. According to Gartner, the business intelligence and analytics software market is expected to touch a whopping $22.8 billion by 2020. International Data Corporation (IDC), on the other hand, predicts that the worldwide revenues for big data and business analytics solutions will reach $260 billion in 2022. From banking and manufacturing to professional services and government agencies, almost all industries across the globe are investing big time in analytics.
A recent research commissioned by SAS, an analytics company, found that 72 per cent organizations believed that analytics helped them generate valuable insight, while 60 per cent thought that their analytics resources made them more innovative. Interestingly, 65 per cent of respondents could quantify the business value of deploying analytics, with 27 per cent saying that analytics has helped them launch new business models.
Expectations vs reality
Enterprises expect analytics to not only deliver benefits across customer-facing and internal operations, but also to drive the bottom line. Yet, the fact remains that majority of the businesses fail to get the most out of their analytics investments. The challenges are myriad – from lack of alignment in the skills and leadership needed to maximize the potential of analytics to ineffective management of multiple analytics tools and data management processes.
As an insightful Harvard Business Review article on Why So Many High-Profile Digital Transformations Fail points out, “digital is not just a thing that you can buy and plug into the organization. Digital transformation is an ongoing process of changing the way you do business”. Experts agree that digital transformation requires business model reinvention. And analytics helps companies explore and build new business modules.
Unless organizations put analytics at the heart of strategic planning, it will be difficult to boost competitive insight, innovation and efficiency using analytics. Here’s looking at four things that enterprises must do in order to get the most out of their analytics investment:
# Identify the business problem
The biggest obstacle to optimizing the true potential of analytics is looking at it as a silver bullet to the organization’s current and future problems. So, the starting point for any enterprise looking to maximize its analytics ROI is to first identify the business problems that they expect analytics to help solve.
Once the problems are identified and prioritized, it’s easier to understand how analytics can create business value. With a clear vision and strategic approach, analytics can drive better business decisions and outcomes. Experts concur that analytics investments that are tied to measurable business outcomes are more likely to produce tangible benefits.
# Focus on flexibility & learning
Incorporating data analysis into key decisions across departments – from sales and marketing to customer service and other core business functions – demands a flexible infrastructure that embraces constant learning. It’s not a one-time event; it’s an ongoing, ever-evolving process.
To ensure that the maximum value is extracted from the analytics investment, enterprises need to stay updated with the latest tools and technology, ensuring continual monitoring, tuning and upgrading. Reskilling and upskilling are as important as choosing the right data and analytics models.
# Invest in people
Analytics investment, for most enterprises, is synonymous with fancy tools and the latest technology. Very few realize that without the right human resources and expertise, analytics can never realize its wide-ranging potential. It calls for the right blend of talent with data science and analytics skills as well as cutting-edge analytic techniques.
According to the SAS study, those who invest in data science talent are more likely to see ROI. Also, 66 per cent of analytics teams are more positive of their ability to scale to meet future analytics workloads, compared to 59 per cent of those in standard IT roles.
# Embrace business model transformation
To taste success in business analytics, enterprises need to transform their business models to create new opportunities for customers, products and services. Right from fostering an organizational culture of innovation and experimentation to creating a new vision and strategy for growth, every aspect of business must be open to reinvention.
Business analytics isn’t about making cosmetic changes; it’s about delivering organizational change. Whether it’s creating partnerships within and outside one’s core industry to optimizing business functions, processes and models, enterprises need to explore new business models to further their evolution.
Today, analytics has the power to make or break a company. Whether it’s to augment profits, or cultivate better customer experiences, or even ensure successful adoption of artificial intelligence, analytics can translate into competitive advantage only when enterprises are able to quantify the value they are creating through business analytics.
Research from Forbes Insights and Cisco shows how pervasive modern analytics strategies have become within nearly all business initiatives. However, there’s a huge gap between mature analytics practitioners and businesses that are struggling to catch up.
In their remarkable book ‘What is Your Digital Business Model’, authors Peter Weill and Stephanie Woerner claim that digital transformation is not about technology, but about change. And it is not a matter of if, but a question of when and how. Without new business models in the digital economy – the authors caution – many enterprises “will suffer a death of a thousand cuts – a slow and agonizing descent into a world of automation and cost competition while someone else captures the relationship with your customers.”
Do you have a strategy to prevent that slow and agonizing end? Pen down your ideas to us at firstname.lastname@example.org