Setting a vision for your Data Analytics initiatives
Are you report rich but information poor? Are you despondent about your investments in that big data warehouse environment? Do you really see a change in business results because of your data? Perhaps the issue is not your data.
Getting a decent ROI on your analytics environment can be quite a challenge. Yes, it seems to be common knowledge that data-driven organisations outperform their less data-driven competitors. According to McKinsey they are 23 times more likely to acquire customers and 6 times more likely to retain them. However, Gartner tells us that 70% of business intelligence projects fail to deliver on user’s expectations.
In a business world where nearly everything gets a number attached to it, it becomes increasingly harder to see the big picture. Stephen Covey addressed this issue in his landmark ‘7 Habits of highly effective people’ with the analogy of climbing ladders every day without questioning whether they are positioned against the right wall.
Could it be that your disappointment in your analytics environment, data warehouse, or whatever number-crunching capabilities you have, is caused by the absence of a pervasive vision? You might have lots of numbers, but don’t see the business benefits of maintaining all these numbers. We need a vision to make sense of numbers. Without the context and relevance provided by that vision, the numbers become meaningless. Pretty much like your soul needs just as much nurturing as your body does.
To turn the vision into something tangible we need a process that has stood the test of time, and gets applied at every level of your organisation: the Deming Plan-Do-Check-Act cycle. The PDCA cycle seeks business improvement through a simple set of clearly defined steps:
1. Plan – analyse the problem or opportunity and develop possible solutions to test
2. Do – test the solutions and measure results
3. Check – determine whether you are on the right track with your hypothesis
4. Act – if successful, implement the solution
But what if you have that all-pervasive vision, the process and that great data asset? You still need one more element in your approach that makes these elements come together. It is grit. Grit is passion, stamina, perseverance with longer term goals, courage, resolve and strength of character, all rolled up into one.
Now, let’s look at an example of this model in action. Let’s assume we are a retailer that is battling with out-of-stock situations on the one hand, and inventory levels that are too high on the other, which negatively impact our organisation’s margins. As a first pass of the PDCA cycle we might formulate the hypothesis ‘does real-time visibility in stock levels per retail store give store managers the necessary info to avoid out-of-stock situations?’ We implement an initial, straightforward business intelligence environment to provide this info to a test group. Then we compare the results over the next couple of weeks to stores without this info. If the results are favourable, we anchor the solution by rolling it out to all the stores (and keep measuring effectiveness of course). A second iteration of the PDCA cycle could then involve the analysis of optimising stock levels across all items, rather than just avoiding stock-out situations, since we don’t want to carry too much inventory. If that proves to be successful too, we ensure it gets anchored into day to day processes as well.
On top of this, be aware that it might not be an easy walk in the park. You need persistence to get across hurdles like uninterested users, bad data, regulations, resistance to change at all levels in the organisation and sky-high expectations that need careful navigation, to name a few. That’s where grit comes in.
In short, to survive and thrive in today’s business landscape we need to spend more time on the usage of the information that we provide through data environments. This needs to happen through a structured, systemic approach. Oh, and be prepared to sink your teeth in it for a longer period before you can reap the rewards. You can’t have a new company culture by Monday either, can you?