Plenty of companies have plenty of data and plenty of analytics tools, but they fall short when it comes to converting analytics results into action.
Today’s businesses are applying analytics to a growing number of use cases, but analytics for analytics’ sake has little, if any, value. The most analytically astute companies have operationalized analytics, but many of them, particularly the non-digital natives, have faced several challenges along the way getting the people, processes and technology aligned in a way that drives value for the business.
Here are some of the hurdles that an analytics initiative might encounter.
Analytics is considered a technology problem
Some organizations consider analytics a technology problem, and then they wonder why the ROI of their efforts is so poor. While having the right technology in place matters, successful initiatives require more.
“The first key challenge is designing how and in what way an analytics solution would affect the outcome of the business,” said Bill Waid, general manager of Decision Management at FICO. “We start by modeling the business problem and then filling in the analytic pieces that address that business problem. More often than not, there’s a business process or business decision that needs to be incorporated into the model as we build the solution.”
Framing the business problem is essential, because if the analytics don’t provide any business value, they won’t get used.
“Better than 80% of analytics never end up being used. A lot of that stems from the fact that an analysis gets built and it might make sense given the dataset but it’s not used to make something happen,” said Waid. “That’s probably the hardest element.”
Placing analytics in the hands of the business requires access to the right data, but governance must also be in place.
“[T]he technical aspects are becoming easier to solve and there are many more options for solving them, so the people and the process challenges that you’ll face obviously have to come along,” said Bill Franks, chief analytics officer at the International Institute for Analytics (IIA). “In a non-digital-native company, the people and process progress does not match the technology progress.”