Analytics at a tipping point

Golden age or tipping point?

We’re in a golden age for data and analytics – with Big Data and ever-increasing computer power.  And companies, including banks, have no shortage of problems that can be solved using data.

Despite this, I believe that analytics is at a tipping point - specifically, our ability to crunch and analyze data is outstripping the ability of our analysts to communicate “insight” or get our business partners to act on it.  

Generating value from data

While we hear a lot about Big Data, data in and of itself is of limited value (even when it is Big!).  Data only becomes valuable when it is analyzed, and that analysis is used to generate insight.  But even insight is not valuable on its own - it needs to result in explicit action by a business partner in order for value to be realized, whether that action results in the pursuit of value creation or the avoidance of value destruction.  

So, in order to generate value from data, you need to have an unbroken chain where:

• You have the right data
• Data is analyzed and translated into insight
• Insight is communicated to business partners, and
• Business partners utilize this insight to drive business actions (which is what drives value)

Why we're at a tipping point

While this chain sounds simple enough, organizations often face four substantive challenges to delivering value from their data:

1. The "right people" don't have access to the "right data" to support the biggest business priorities
2. Analytics talent is scarce, and the volume of data continues to grow.  It is not possible to analyze all of it and translate it into insight
3. Analysts and business partners sometimes speak two different languages. In these cases, insight gets "lost in translation" between the two groups
4. Business partners and Analysts often underestimate how difficult it may be to translate insight into action when establishing joint priorities.  What looks great as an analysis, or even successful as a small pilot, may be difficult or impossible to scale up to generate real value

How to end up on the right side of the tipping point

So, if you're an Analytics leader, how do you end up on the right side of this tipping point, where business value grows linearly as you grow data and analytics capabilities?  I recommend three courses of action:

1. Invest in Business Intelligence.  Business Intelligence allows you to develop simple, automated tools to help visualize data for your business partners.  This allows you to develop once, and allow your business partners to self-serve going forward.  This frees up your analysts to focus on generating insights in new areas - which is critical if we want to keep up with the growth in data
2. Bridge the communications gap in one of three ways: Coach analysts on business strategy and executive communication and teach business partners how to be more analytical (which is different from quantitative); hire triple threats who understand analytics, technology and communication (these folks are rare), or partner with other people already in your organization who can help you bridge the gap (e.g., Strategy, Communications
3. Don't underestimate organizational readiness.  Many of the new data and analytics capabilities require significant process or organizational changes in order to execute at scale.  Work with business partners to understand what these changes look like and assess whether impact is feasible.  Focus on delivering a balanced portfolio of initiatives so that business partners see immediate impact while from quick wins while you're building long-term capabilities in parallel

I will cover data strategy - how to make sure the "right people" have access to the "right data" - in a subsequent post.