By Greg Todd
Organisations want to leverage analytics as a way to move ahead with less cost. They are not only doing analytics on their customers and their sales, but are also turning it around and doing analytics on their internal operations to try to find places where they can cut costs and manage their assets better.
Many business executives consider analytics an important but missing tool to help them predict and influence customer behaviour, product intake, supply chains and market behaviour in ways that will impact their bottom line.
About 70% of UK and US executives at companies with annual revenues of $500m or more acknowledge that their company needs to improve its analytical capabilities to remain competitive. Most are taking steps to do that, an Accenture survey has found.
Almost three-quarters of these executives believe the leaders of their company are committed to business analytics and have a corporate strategy and distinctive capability supported by it.
So, what is stopping this from becoming a reality? Somewhat surprisingly, it seems to be the technology itself. Nearly half of all executives (46%) cite IT capability restrictions as the biggest challenge their organisation faces in getting where they want to be.
It even edges out non-technical factors as lack of standard processes across company on analysing business data (39%), inability to share data across organisations within the company (35%), insufficient quantitative skills in employees (34%), resistance to business analytics from the company's culture, and lack of committed support for business analytics from leadership (18%).
Restricted IT capability was also the biggest single challenge in the opinion of 22% of respondents, slightly more than lack of standard processes across the company.
It is important to understand exactly what is meant by "IT capabilities restrictions". My assumption, based on the clients I have worked with, is that it refers to data and software − probably in a four-to-one ratio.
Most companies have by now the myriad business intelligence software packages in place that allow them to do analytics. This investment, after all, has been a focus of most companies in the past decade, having spent time, money and effort on improving their analytical capabilities. So, as the tools are in place, it must be user education and how to use the data that are the primary challenges.
What can companies do about it? They need to invest time and effort around their information strategy. This means taking a step back from any roadmaps or activities around data management or business intelligence that may have preoccupied them in the past. It means taking a hard look at answering questions such as: What are we doing with our information assets? What are the right information capabilities that we need to provide to the business?
In order to become more technically proficient, as well as more people-skilled and process-enabled, this entails taking a broader look at the overall analytics effort rather than focusing on a specific tool or data set.
Is this 46% likely to decrease if we survey these same executives a year from now? I think it will, as research from Forrester, Gartner and our own internal work seems to show.
Companies are getting to grips with analytics as well as the technologies that support it. This becomes even more relevant in light of the business environment we live in today.