As a very broad definition, data and analytics bring together multiple disciplines that aim to make data useful. It includes all different types of analytics i.e. descriptive, diagnostic, and predictive analytics. They will encompass various technologies such as Business Intelligence (BI), Machine Learning, Business Rules, etc. In short, the purpose of data and analytics is to drive improved decisions, business processes, and outcomes, Gartner says. So, how do we make data and analytics work?
As the old saying goes, “data is the new oil” and therefore, data and analytics focus so much on the importance of the data. But it forgets a critical component that, without it, will be impossible to make data useful by only storing, managing, and building data quality and literacy capabilities.
So, if the data is the new oil, which it is, why not treat the data however we treat the oil? Let me entertain this analogy here a bit.
Many of us do travel daily in our cars. Sometimes many of us travel interstates and even inter-country by personal vehicles, which is quite fun – I should admit. But, do we build petrol stations or manage crude oil in tanks and tankers! Yet we know the importance of oil in daily commute and traveling regularly.
When it comes to data, we don’t act similarly. Many professionals try to build the whole data management infrastructure as well as validation and cleaning processes at a large scale in organizations. Let me break it to you; storing and managing data is expensive, complex, and requires lots of attention from the privacy and security point of view. On top of that, it does not help any organization to operate better and certainly will not change organizational behaviors.
What is the Missing Component?
To put it simply, the aim of data and analytics is to make the data useful. But, there is no way to make the data useful without thinking about the outcomes and actions. Also, it is pointless to think about outcomes and actions without understanding, thinking, and managing “business decisions”.
When you put the data into the perspective of business decisions, it is not just any data; it is the data that can influence an organization’s operations, people behaviors, processes, applications, and systems.
Business decisions bring the context that makes the data meaningful. And this context will ensure that you focus on creating a better outcome for organizations and simply avoiding boiling the ocean. This is the right approach to make data and analytics work.
How does this help?
Focusing on business decisions allows business and IT stakeholders to speak the same language rather than focusing on technology and the jargon around it.
Focus on what is Important
Creating decisions audit allows understanding and prioritizing the high-value business decisions. It brings an opportunity to talk the same language to business leaders while capturing what is important and how the business operation is influenced. Therefore, it establishes the common and shared understanding of business operation's source of influence. At this point, it becomes straightforward to communicate the value of particular technology and have a clear idea of why investing in such a technology will create a better outcome for the organization.
Avoiding the type 3 error
Building a data capability that is not used or creating an algorithm without use for business. This is the issue when a team of professionals solves a problem that does not exist. That is to avoid all the data and maths to solve a wrong problem.
As per Forrester, on average, between 60% and 73% of all data within an enterprise goes unused for analytics. Gartner says, 53% of AI projects make it to production.
These numbers clearly show the misalignment between what is important for business and what seems to be important from the Data and IT professionals.
Don’t use Analytics as the source for Data-Driven Decisions
Well, yes you read it right. Let me explain this point in little more detail. If the organization is at the stage where its leaders do not know what decisions they want to make, then they should use data to gather inspirations and using analytics is a very good way to do that so.
However, as we all know humans suffer from confirmation bias…
Therefore, analytics cannot be taken as a serious and rigorous source for data-driven decisions.
Address the Gap to Make Data and Analytics Work
Data and analytics leaders are investing heavily in analytics, machine learning, data science, AI, and other related technologies. The belief is that such technologies can drive better decision-making and thus business outcomes. However, there is a real gap between this belief and the reality of what business decisions are, and how they are managed. By using the Decision-Centric Approach®, we close the gap between hopes and reality. This will empower organizations to make data useful, change organizations' behavior positively, and improve the effectiveness and efficiencies of their operations– truly making data and analytics work.
Last updated February 20th, 2023 at 01:09 pm, Published June 16th, 2022 at 01:09 pm
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