A Case for Institutionalizing Analytics

Analytics and BI, as Gartner predicts, will remain the top priority for CIOs through 2017. This is no surprise as more and more organizations include Analytics in their arsenal as a means to gain competitive advantage in these fiercely competitive times where conventional levers to compete are gradually waning. However, it is key to understand that Analytics is not a check in the box, it is rather a way of thinking about business decision making process and it needs to be imbibed into the organizational decision making culture across functions to ensure it results into a continuous virtuous cycle of decisions based on sound data and insights. For that to happen, it needs to be institutionalized.

Interdependent Business Processes: Value Leak

Business processes that define core business activities are highly interdependent and are a part of the business value chain with every process adding value as the baton moves up the value chain. It is crucial that all the key processes which can leverage analytics are such designed to ensure key decision-makers base their decisions on sound data and analytics rather than letting gut and instincts override that. Imagine an organization trying to address high customer churn. Sales performs Churn Analysis and identifies customers at-risk of churning and finds one of the key drivers of churn as ineffective customer service. It is equally important for the Customer Service to ensure that they perform e.g. Voice of Customer Analysis (or a similar analysis) to understand the root cause for ineffectiveness. If that does not happen the churn will continue ultimately resulting in value leak. Hence it is imperative not to leave loose ends. Institutionalizing analytics, across related processes, at the very least, can ensure that.

Analytics as a competitive advantage

If Analytics has to be leveraged as a competitive advantage, it needs to be a part of core organizational strategy. Using it opportunistically just for quick wins is a short sighted strategy which may help tactically in the short term but will not help strategically in the long term. Organizational view here should not be just to identify low hanging fruits (which though could be a start) but to really take a holistic view of all the business processes where decisions route through the Analytics tunnel so they come out swifter, sharper and more informed and accurate from the other end.

Being Lean, Agile & Aware of Socio-economic Environment

In these trying times, it goes without saying that organizations need to be lean, agile and be extremely aware of the external social, micro and macro-economic environment. This requires them to have the data, information and insights on their fingertips. Imagine a scenario where a new govt. policy change needs the organization to rethink their branding. This is by no means an easy decision. But if the organization is data-aware, has institutionalized analytics, is already measuring its external brand perception and its customer sentiments through social media analytics and its marketing costs and RoI through marketing analytics then it will find it much easier to find answers to all the what-if scenarios to arrive at a much more educated and informed approach rather than basing it on gut, instincts or whims.

Inculcating a Data-driven Decision Making Culture

As a famous saying goes, ‘Culture eats strategy for breakfast’. Some of the most difficult organizational changes are more successfully achieved when imbibing the change in the organizational culture rather than enforcing them as a strategy. The same is true in case of Analytics as well. Analytics needs to be woven across the organizational culture so that it is perceived to be an integral part and not as an enforced extra check. Decision makers should not feel that they are doing things differently when they use Analytics in their daily decisions rather it should come naturally and that can only happen if it is a part of the decision making culture, i.e. if it is institutionalized.

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