5 Ways to Become a Lean, Mean Data Analytics Machine
Having a strong, enterprise-focused data analytics effort means a much greater chance of having above-average growth. Nearly two-thirds of companies with well-established advanced analytics strategies report operating margins and revenues of 15% or more, according to a recent survey published by Forbes Insights and EY.
So what makes an organization a well-functioning, data-driven machine? Having highly effective data governance, master data management, and superior data management and quality assurance practices is one key. The second key is having a data analytics strategy that is well-established and central to the overall business strategy. There is money flowing to these efforts as well. Over the next two years, more than half of survey respondents plan to invest at least $10 million in data and analytics resources. This comes on the heels of similar spending levels in the previous two years.
Here are five essential points to transforming your enterprise into a lean, mean data analytics machine:
Make it an enterprise initiative, and nothing less. The key is enterprise cohesion. The companies successfully moving forward with data analytics initiatives don’t settle for siloed data projects – data excellence is a commitment seen across their enterprises, from the C-suite to the production floor to the lunchroom. The top performers, the Forbes/EY survey of 1,518 executives finds, regard analytics as an enterprise-wide strategy, “not an ad-hoc endeavor that varies from department to department.” There is progress toward this enterprise vision, the report’s authors observe. In a similar EY-Forbes Insights survey a year ago, only 16% of respondents had achieved an analytics strategy that encompassed their entire enterprise, compared to 23% of this year’s respondents.
Invest in the human element. Data analytics – even among top-performing enterprises – has its challenges as well. There still needs to be a heavy focus on the people who are applying the analytics, making the decisions and changing business processes within organizations, the Forbes-EY survey finds. Forty-one percent of organizations, in fact, still lack the collaboration needed between IT, the data and analytics team and the business team. To fully succeed in delivering value to the business, data analytics needs the engagement and support of everyone across the enterprise.
Measure everything. Measurement is an essential ingredient to data analytics success – analytics about analytics, if you will. Leaders make measurement a high priority, the survey report’s authors observe. Leaders benefit from having more-sophisticated measurement capabilities, and their application of advanced analytics gets better over time. More than two-thirds of this group, 67%, say they’re “highly effective” at implementing test and learning processes that then impact advanced analytic models and suggested actions.
Fail fast, and keep going. Rapid experimentation and iterations are another hallmark of successful data analytics companies. As the survey report observes, leaders experiment with advanced analytics across many parts of the business – and then scale rapidly what works. Plus, the report’s authors advise, “ensure that actual results and best practices learned from each initiative are used to make decisions on what projects to stop, refine, or accelerate. Push for as rapid a cycle time as practical for each initiative. The enterprise should experiment but it also needs to understand how to fail fast and move on.”
Make data analytics your business. Finally, as these lessons are learned and implemented, they need to be baled into “the decision fabric of the enterprise,” the report recommends. Ultimately, data analytics delivers more than insights for decision-makers – it also opens up new revenue streams. “Survey respondents are exploring ways to sell the insights from advanced analytics, in addition to collaborating with partners for a market advantage and to enhance customer experience,” the report states.
(Disclosure: Over the past 12 months, I have worked with both Forbes Insights and EY, mentioned in this report.)