Let’s get something straight from the beginning. Your IT systems are not worth a great deal. Why? If you bought your systems brand new, they were worth at least 30% less as soon as you took delivery of them, and their value has been dropping ever since. The same with your applications – in fact, these can be worse, as many cannot be resold at all, and are therefore worthless in themselves.
Congratulations – you have created an IT platform that has little real value, and what value it does have is shrinking on a daily basis. All that hard work…
Hang on, though. What would be the point of building such a platform if there was no real value to it? What has value is your data – but only if you can deal with it in the right way. Data in itself is just a waste of storage – it is only once it has gone through a process that forces it to give up its information that knowledge can be built from it so that a better informed decision can be made by the business. And here is the key – it is the capability to make the right decision at the right time where the value lies. From this comes the intellectual property (whether this is how to close a deal with a prospect, how to bring a new product or service to market or inventing something that is patentable) that defines the success or otherwise of your organisation. Good intellectual property has base and ongoing value: it can create revenues through sales, and it can be further monetised through patents and through licensing to other people.
To move data through the process of information and knowledge requires tools that can analyse the data and allow people to see the information in ways that make sense to them.
This is where business analytics come in – and where business intelligence and business reporting have often failed in the past. Old-style approaches have failed in that they were the preserve of the few, rather than being used by all the knowledge workers within an organisation. This was essentially a ‘knowledge is power’ stance – and those who had access to the magical powers of business intelligence dashboards tended to hoard the power it gave them.
It is time for organisations to mature and accept that people across their employee base (and outside of it along the contractors, consultants, customers, suppliers and other stakeholders) could all be sources of advancement – as long as they can analyse data themselves.
There is much talk of the rise of the ‘data scientist’ as the new centre for gaining knowledge from data. Unfortunately, to my mind, this only perpetuates the ‘knowledge is power’ problem. A few people will have the capability to provide advice to the decision makers within an organisation – and if they get it wrong, then the rest of the organisation will also suffer.
Far better to democratise business analytics. Get the tools into as many hands as possible and create a socially collaborative environment where everyone can discuss their take on what they are seeing. The wisdom of the crowd may well play well here – those who are trying to force the data to fit their pre-conceived world view may find that the overwhelming view from others changes their minds. Those who see something but are unsure as to what it means can bring in others who can help in uncovering whether the information is worth moving through to the knowledge stage – and from there to a decision maker.
Allow as many people as possible to play out ‘what if?’ scenarios. Encourage them to share their findings; reward them when their findings result in an advantage to the company. Make your business information centric: optimise the value of the underlying data in any way possible.
Of course, this needs the right tools – business intelligence tools costing many hundreds to thousands of dollars per seat just cannot be rolled out to 50% or more of a large organisation. However, newer tools are showing how costs can be lowered and usage rolled out to a much larger user base.
I believe that the use of business analytics will closely follow Metcalfe’s law, with the overall value of the system increasing for every extra person that is connected to a social business analytics system. It may not increase proportionally to the square of the number of people connected as Metcalfe and Gilder postulated for the telecoms environment, but the value of democratised business analytics to an organisation cannot be overlooked: optimised analytics could be the way to grow your business successfully.
Quocirca has a free report on the future of business analytics that can be downloaded here.