As we are approaching the end of financial year (or Q3 in some countries), businesses are starting to work on their annual strategic planning cycles. I think it is timely that organizations consider crafting an Analytics strategy that enables Analytics become a key part of their execution tactics.
Of course, each company is different and there is no one-size-fits-all approach that can be taken when formulating a strategy but the list below is my attempt to highlight five important things to remember as you plan for your Analytics journey.
1. Start with your overall business strategy
While it may sound constraining, don’t start with a clean slate.
If you ask yourself a question, what can be done to help the business by leveraging Analytics, chances are that all problems will start to look like Analytics problems.
Remember, if all you have is a hammer, everything looks like a nail.
Start with your overall strategy – if your business is looking to reduce costs, see how you can leverage Analytics to do that. If business is looking to grow, see if you can use Analytics to serve under-served customer segments or improve customer experience to reduce churn, and so on.
2. Work out the role between Chief Strategy Officer (CSO) and Chief Data Officer (CDO)
Most mature organizations have a Chief Strategy Officer and some have Chief Data Officer or an equivalent role as well. Formulating a robust strategy requires close coordination between all C-Level executives and not just the CSO and the CDO.
Nevertheless, the cooperation between CSO office and CDO office is critical. Strategy is part art and part science – your CSO being a seasoned strategist brings art to the table while your CDO will hopefully bring the science and a healthy dose of reality check.
Additionally, CDO and CSO may carry leverage over different set of stakeholders and so the combination is quite powerful. For example, your CDO may have complete trust of CIO while the CSO may carry influence over Chief Marketing Officer.
If you don’t have a CDO, let CIO play the role of a CDO for the purpose of this exercise.
3. Don’t stifle resources going into your regular data
It is possible that your organization decides to invest money into some new initiatives related to Big Data. Don’t assume that the need for resources going into your regular data (think of your ongoing BI initiatives, spreadsheet software licenses, etc.) will diminish because the need for resources going into Big Data is growing.
So, does this mean that organizations will spend more on Analytics in future than they do today?
I think there are two parts of the answer to this question:
- To the extent that Analytics contributes to reducing costs elsewhere (e.g. manpower) – Yes
- To the extent that Analytics contributes to growing revenues – No (because the spend as a percentage of revenue may not change significantly)
4. Consider the organizational changes required
Your organization may need to go through a significant amount of change in order to execute its Analytics Strategy. Even before you start the execution, you need to think of answers to key questions such as:
- Do your processes allow you to act fast enough if you are planning to leverage [high velocity] Big Data to improve your Customer Experience? The same goes for launching new products or services based on Big Data.
- Where will the budget for Big Data initiatives come from?
- What adjustments need to be made to existing processes to leverage CDO office?
- If you are planning to use HR Analytics: have you engaged your current workforce sufficiently and have they bought into the idea?
5. Think about the execution
Given the interest in Analytics these days and the potential of new technologies, it is quite possible that your organization will have a long list of Analytics related initiatives that it wants to execute.
You might want to evaluate your Analytics initiatives on two dimensions: Volume, and Value. Typically, you will arrive at a curve as shown in the chart.
- For high value Analytics, you should keep the ownership directly with the business. You will probably want your smartest Data Scientists and Analysts working on the problem.
- For medium value Analytics, you could probably think of some internal Shared Service Centre that can leverage some economies of scale while delivering solutions to your Analytics problems
- For your low value Analytics, you should probably think of an external specialized Analytics partner who is able to leverage different underlying economics and enable your business to capitalize on the long-tail of Analytics initiatives
Agreeing a delivery approach upfront will save significant time at later stages, particularly when it comes to preparation and approval of business cases for individual initiatives.
I think the promise of Analytics is real and we are at a point where we can leverage technology to bring a step change in the way we do business. Of course, robust planning and execution are the keys to success.
As you embark upon your strategic planning process, I will be interested in learning how you are approaching Analytics in your organization.
What do you think about this post? I will be keen to hear your thoughts, comments and feedback. Please feel free to comment here or reach out to me on firstname.lastname@example.org.