Part 2 of a 2-part series. Read Part 1.
How are data and analytics changing how leading companies develop business initiatives today?
In the past, analytics were good at telling us what happened in the business, but they weren’t always successful at showing us the reasons for the results. That’s changing, thanks in part to predictive analytics, which can help companies understand not only why something is happening, but what actions they should take to improve performance in the future.
Analytics power in the hands of business users
And now, line-of-business people can capitalize on these new capabilities. Predictive analytics have traditionally been in the hands of data scientists – at least in organizations that were lucky enough to have data scientists. But now, we’re seeing predictive capabilities being embedded within traditional business-intelligence applications, enabling a broader set of business users to use them.
This is part of a larger trend we’re seeing: the overall blurring of lines between analytics for business intelligence, planning, and predictive insights. That’s an important trend. If you think about planning, for example, once you create a plan, the next thing you want to do is measure that against your actuals, which is a business-intelligence use case.
Continuing over-reliance on gut feel
However, despite these advancements in analytics, a new study by EY and Forbes Insights shows that many decision makers still underuse insights from data. Many executives continue to rely on gut feel over data and analytics. But we’re seeing that organizations using analytics extensively for business initiatives outperform their peers in terms of revenue generation, profits, and market valuation. Clearly, there are good reasons to rethink attitudes about the value of analytics.
Driving wider consumption and use of analytics for decision-making requires creating a culture around analytics. This starts with a business-intelligence strategy that focuses on the objectives of the organization and what needs to be achieved from an analytics perspective. Once business priorities are defined, determine what key performance indicators are required to help you realize those goals. For example, are the investments for analytics delivering the desired returns?
A major trend toward analytics in the cloud
Cloud technology can further enable the adoption of analytics in enterprises, and that’s one of the big trends we’re seeing. I’m meeting a number of organizations that I consider to be traditional and conservative in other ways, but are nevertheless investing aggressively to move applications and analytics to the cloud. They’re doing this because of opportunities for reducing costs of ownership. Also, because responsibility to support and maintain these resources falls on cloud service providers, enterprise IT staffs are freed up to focus on what’s most important: projects that directly add value to the business.
5 steps for better analytics outcomes
I’d like to offer a few concrete steps for you to consider:
- Combine an enterprise-wide analytics strategy with resources for individual business units
- Bring together business and technical people to define high-value analytics initiatives and develop project road maps
- Delineate clear milestones and track KPIs based on business requirements, then continuously measure the success of analytics investments
- Choose integrated analytics platforms that address local and enterprise-wide requirements versus collections of point solutions
- Evaluate the cost-savings and advanced capabilities possible with cloud-based analytics options
Read the full study by EY and Forbes Insights, Data & Advanced Analytics: High Stakes, High Rewards.