The business press is filled with articles on analytics, machine learning and big data. The articles contain story after story about how companies are using analytically derived insights to make critical decisions that, in turn, delivered immense value. With such success stories becoming more common, the appetite for analytics is increasing rapidly. Analytics capabilities are now thought to be a must have, as opposed to a nice to have.
However, when evaluating analytics capabilities today, we find most companies, even large, established ones, are struggling. They are struggling to identify analytics priorities, struggling to secure appropriate analytic talent, struggling to create predictive (versus descriptive) analytics capabilities and struggling to integrate insights into decision-making.
For most companies, in other words, the creation of analytics capabilities is still a work in progress.
Analytics Capability Assessment Findings
These perspectives are validated in the results of the Analytics Capability Assessment, conducted by PIVOT Strategic Marketing. The findings offer a glimpse into the perspectives of leaders, managers and analysts focused on developing analytics capabilities in their respective companies.
Key findings include:
- The overwhelming majority (83%) of respondents shared that analytics-‐derived insights are “very important” or “an absolute must” to drive competitive advantage and high performance. Is the time now for analytics capability development? Yes!
- Analytics can yield huge impact! 32% of companies estimated >$100 million in annual profit impact and
28% estimated $30-‐$100 million. However, nearly half (45%) of the companies do not know the annual profit
impact these insights can deliver. Must companies get better and estimating and communicating the financial impact of analytics? Yes!
- “Strategy” (83%) and “Marketing” (79%) are the functional areas respondents stated would benefit most from analytics and insights.
- 91% of respondents feel their company needs to improve their analytics capability. And the majority (64%) either needed to do so yesterday or are working on it now. Do we need to accelerate the development of analytics capabilities? Yes!
- None of the respondents — zero — stated their company has a clear and documented vision for what a high performing analytics capability looks like. Must we get better at architecting a plan for future capabilities and building towards that vision? Yes! Will the future look exactly as we planned? No. Companies will need learn and adapt along the way. The good news: half of companies (51%) are in the process of creating a vision and the associated road map to develop a high performing analytics organization.
- 70% of companies say they are pretty far (51%) or super far (19%) from world-‐class analytics organizations. Very few organizations (16%) contend they’re on par with them. Does this gap give an advantage to world-‐class analytics organizations? Yes! Can your company become world class? Absolutely yes!
- Companies that have or are in the process of forming a learning agenda — a set of strategic questions and a plan to answer them — tend also to have good or outstanding support (77% of companies) among senior management. Will a learning agenda help the leaders in your company know what questions will be answered and when, providing confidence that their investment in analytics is delivering returns? Definitely yes!
- Not surprisingly, most organizations (87%) do not have the proper analytics resources. Would an estimate of the potential impact from analytics help your company create the business case to invest in the development of analytics capabilities? Probably so.
- The greatest challenges to capability development are not the analytical tools & technology. Rather, the key challenges are the Quest for Perfection (69% Top 3 Box), Creating an Analytics Culture (69%), Not Enough Analytics Capability (67%) and Not Enough Focus on Few, Critical Projects (64%). Does it take time and effort to change the mindset and culture to facilitate effective analytics capability development? Yes and the returns make the effort very worthwhile!
- Despite analytics being deemed an urgent priority by most, 56% of respondents stated they’re behind schedule. Another 10% admitted to not having even started. Couple this with the fact that their organization does not have a clear vision for analytics and it’s no wonder most companies are struggling.
While companies understand the importance and potential impact to be derived from world-‐class analytics capabilities, few are there today. Most are struggling or just getting started. As companies move from descriptive reporting to prescriptive analytics, it is important for them to develop a vision, create a road map to achieve it and then execute.
Emerging Best Practices
To accelerate your company’s journey to develop analytics capabilities, consider the following emerging best practices:
- Create a analytics capability vision and road map to achieve.
- Develop a learning agenda with the most strategic questions and a plan to answer each
- Quantify the potential impact of individual analytics initiatives
- Identify ways to use predictive modeling to drive strategy and financial performance
- Consider creating more integration and coordination across analytics teams, possibly utilizing a Strategic Analytics Center of Excellence
- Start with achievable analytics projects
- Have the courage and discipline to say “no” to projects that are too ambitious or have low likelihood of success
- Remember the 80:20 rule
- Create successes and build upon them, investing in resources as appropriate
- Never give up…Keep taking steps on the “journey”!
Enjoy the journey!
Let us know if we can assist you along the way. Contact us at email@example.com to learn more about how we help clients develop world-‐class analytics capabilities (and improve their financial performance)!
About PIVOT Strategic Marketing:
PIVOT Strategic Marketing (www.pivot180.com) is a boutique consulting firm focused on analytics-‐driven growth and marketing strategy. We utilize BIG (and small) data analytics to create breakthrough strategies that set companies apart from their competitors. We are experienced strategists and marketers. We are fact-‐driven. We are creative. We are collaborative. We get results!