Data analytics is transforming the way businesses and governments provide services to clients and customers, and has earned a place as one of the core disrupters of the digital age.
From customer experience and improving operational efficiency to optimising ‘rescue and relief’ efforts during natural disasters, the possibilities offered by analytics are endless.
But while organisations recognise the value of analytics – implementing technology, resources, and initiatives – many are struggling to achieve its full potential. Many private and public sector operations are grappling with how to leverage the data (issues with data sharing, data management and data linkage); as well as concerns around privacy and ethics, compliance and legislation.
These were some of the hot topics discussed by CIOs and heads of IT (gathered from industry, government and academia) during a three-city roundtable luncheon tour of Melbourne, Sydney and Canberra. CIO Australia, in conjunction with SAS, asked attendees to discuss the power of analytics and its transformative influence on their organisations.
SAS director of product management for cloud and platform technologies, Mike Frost, says analytics is no longer an option, but a must where a slight data point can mean the difference to failing or succeeding.
“Business executives recognise the value of analytics, they are implementing technology, resources, and initiatives for analytics, but they are struggling to achieve its full potential,” he says.
Certainly, Frost says analytics is red hot these days thanks to the explosion of data and game-changing technologies including big data and IoT that are giving companies the ability to automate decision-making, introduce new innovations and transform the way in which companies do business.
“With the arrival of technologies like big data and concepts like IoT, many companies are seeing that we’re arriving at a transformative point in our business where analytics is being seen as an essential service, much like the way the Internet is now,” Frost says.
He adds that there’s an evolution of the ‘analytics economy’ where data, people and machines are working together to accelerate the pace of innovation.
“Organisations are looking at analytics as a foundational essential service. It started out in different lines of business, but now, in particular, what we're seeing with organisations is looking at things cross-organisationally and figuring out how we deliver analytics capabilities so that we can really bring the power of math to bear to be the engine of innovation,” says Frost.
Frost says globally companies are on varying paths on the analytics journey, either focusing on descriptive analytics (telling the situation as it is); predictive analytics (predicting what is about to happen); and then prescriptive (where you recommend what to do).
“I would say there are very few organisations that are truly operating in a fully prescriptive mode, but that is what most organisations are aspiring to. What passes for analytics at some organisations is very much descriptive, including the reports and things, which have value. It does help to provide insight particularly to decision makers. But the thing that I try to remind people of is, ‘Now what?’ Building a model or building a report is not a business objective.”
People, process and technology
Roundtable attendees revealed a range of use case scenarios, discussed the benefits of analytics, as well as delved into their specific challenges and pain points. Many agreed analytics means different things to different people and there’s no ‘silver bullet’ thinking.
Many of the government attendees, for example, revealed a host of challenges including: budget constraints; the difficulties in understanding data that belongs to other agencies, and issues with data sharing from both an operational and practical perspective.
They also cited scarcity of skills; dealing with disparate and unstructured data; and the challenges in understanding the data, what is being collected, and ultimately being able to discern its value as other key challenges.
“If we don’t have good data, or work with the right data, in all of its different formats, then we’re losing the battle,” one government attendee says.
Digging into the details, Frost says some overall primary challenges that organisations are facing typically fall into three categories: people (no established analytics culture; talent gap; skillset silos); process (business silos; governance and regulation; accidental analytics strategy); and technology (infrastructure limitations; fragmented environments; and barriers to asset promotion).
“Where I’ve seen struggles tend to happen comes in where you don’t have a defined set of success criteria,” Frost says. “Building a model is not a bar for success. It is ‘what are you doing with that, how are you changing your business based on that model?’ And being able to have that success criteria tightly bound in with the investments that you make.”
He says many organisations tend to forget that 80 per cent of the effort involved with analytics tends to be the data side in terms of accessing data and preparing data.
“Much of what people do today, relative to analytics, is what I’d call low value work. It is important, it is tactical and has to be done, but it doesn’t necessarily move the needle,” he says.
Meanwhile, roundtable attendees agree the ‘people aspect’ is often the most difficult challenge in the ongoing push towards digital transformation and adopting game-changing technologies like analytics.
Indeed, it is often a challenge for many IT leaders - particularly those with an analytics focus, to help the business properly consume analytics in a way that’s both relevant and delivers a business outcome. Often times, people in the organisation don’t know the problems, or even the right questions, that they are trying to solve or answer.
That sentiment resonated with Mark Clifford, information systems business manager for Sustainability Victoria (SV), who says the struggle for his organisation is around setting and delivering reasonable expectations. It is about asking “the right questions” in order to get better business outcomes and gather insights.
“We currently have a minimal approach, a small team of data experts and some basic technology. Our current approach is around open data and data sources to improve our information, advice, and decisions making.
“I'd say we are very immature right now. I believe the struggle is around what people want, and what they believe they can achieve. I think we are also in an era where we feel technology should be more advanced than it is. So while we have a lot of data available, it can feel like we are still quite reactive while at the same time being wishful thinking about what we can have and do.”
But Clifford recognises the power and breadth of data and how analytics can bring unprecedented insights into the organisation.
“Now more than ever before we have access to a wealth of information and the tools to analyse it. We can make decisions by being more informed and have more accurate data, and we can target areas (like clients, products, finances, completive information) to draw out very specific findings and act on them,” he says.
“For SV, we use data extensively in the waste management areas – landfill forecasts go out to 2050, volumes of waste, items for recycling and reuse being calculated and fed back to businesses on how to improve, and most importantly, used to make policy and legislative decisions.”
Meanwhile, over at workforce design and delivery company, Tandem, Richard Simpson, executive general manager, business innovation, says the main benefits of having analytics means companies can now replace the guesswork and ‘gut feel’ with tangible facts.
“Organisations are looking for the underlying reasons to trends in data and behaviour,” he says, explaining he sees a few use case scenarios including revenue generation (having the ability to prompt staff for sales activity when the correct triggers in customer data appear); cost savings (looking for efficiencies revealed in the data); and safety (looking to identify areas of risk that can then be remedied).
Simpson also agrees the people aspect is often the most challenging when looking to implement an analytics strategy. “Most of the struggle is because businesses are lazy – they are looking for the answer/solution/tool rather than focusing on the strategy, issue or problem.”
He suggests companies stop mixing up reports with analysis.
“Reports are quite often ‘dead’ information – that managers don’t even see or read or pay attention to. Analytics is quite different – it is looking for meaningful insights – that will then be acted upon. There is a lot of focus on reporting as opposed to analytics – and the two are fundamentally different – but this is very confused in businesses,” he says.
Over at Bupa, chief data officer, Scott Barber, says analytics will benefit the organisation in a number of ways – explaining some practical use cases include correlating treatment plans to health outcomes, automating decisions, next best offer/action, and analysis video streaming to trigger alerts for patients in distress.
“It can be leveraged to drive business performance, improve customer experience and identify pathways to deliver better health outcome to individuals (longer, healthier happy lives for our customers),” Barber says.
“Bupa has hired a CDO to focus on taking a strategic approach to data management and use. It is largely acknowledged that the technology isn’t the barrier, but we need the headspace, expertise and exec support to combine the technology capabilities with organisational change and do so in a commercial viable manner. This is a big task, but also a big opportunity if we can get it right.”
For Roger Fredman, head of IT at County Court Victoria, analytics helps the organisation understand performance (or the lack of it) and how to better inform the executive ranks for risk assessment and decision making.
“In our particular organisation, a major focus is the amount of time people have to wait for the judicial process; time-to-trial. Our goal in this specific area is to reduce the amount of time people have to wait, which requires an understanding of our processes and events. Better data and resulting analytics allows us to ‘see’ within our operation and then target the areas prime for reengineering,” Fredman says. For now, he said the organisation is taking graduated steps.
“We are shoring up the quality of data across the board, but investing in a better managed/organised data warehouse, aggregation of local data into a wider repository, and dashboards to better present the data and accommodate dialogue,” he says.
Asking the right questions
Certainly, IT and business leaders can harness the power of analytics - but need to understand the ‘why’ and the ‘what’. Companies need to understand how to create the right datasets, how to turn the data and insights into value for customers, and how to create an analytics strategy that resonates with the business and delivers a business outcome.
For many roundtable attendees it is about “storytelling” and understanding how analytic insights can give you a compelling narrative, answering not so much the ‘what’ but the ‘so what’, which is a turning point. Indeed, asking the right questions is key, and defining the goals in the business objectives is essential, Frost says.
“Sit down and make sure that you have the business objectives well defined and figure out the right way to build your analytics competencies around achieving that business objective. Don’t worry so much about the techniques and tools and things, that will come. But if you start off with the right goal in mind, the other things will fall in place,” he says.
Frost says many companies around the globe embarking on an analytics journey without much of a strategy.
“The quickest route to failure is to start throwing money at something without a clear goal in mind,” he says and adds that many companies don’t know where to start, particularly if they don’t have an analytics culture.
“Certainly, instilling an analytics culture, if you talk about it from the top down, it isn’t easy. It is not overnight. You don’t just declare, ‘we’re going to have an analytics culture.’
“It is an ongoing process - something that you have to really be willing to embrace the counterintuitive because the biggest challenge that people have working with analytics is how often something comes up that is the opposite of what your gut tells you it should be. When you see organisations willing to go out on a limb and embrace that counterintuitive type of thing, that’s when they really start to see the results of something.”
Finally, many analytics projects fail because many companies don’t have a proper strategy and even forget why they are doing it. As one roundtable attendee aptly noted: ‘Don’t go down the analytics wormhole. Don’t lose sight of the mission. Don’t analyse things that don’t need to be analysed.”
Analytics health check
- How quickly is your work able to be reused by others? How easily can you collaborate and share with others throughout the organisation? How well can you demonstrate the impact of your work?
- How do you manage the many analytics projects that are occurring within your organisation? How easily can your analytics operations scale? How secured and governed are your data and analytics assets?
- How are you measuring and monetising analytics-based innovation? How trusted are your analytics results? How successful are you in driving an analytics culture?
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