Why your best digital strategy should be a human one
It’s a common fallacy to equate an investment in your digital strategy with an investment in technology. The key component in your digital capability should be a human one
Increasing volumes of available data, sophisticated analytics software and rapidly decreasing technology costs are radically changing the nature of business. To keep up with the pace of change and be fit for an increasingly digitally-dependent future, organizations are investing heavily in digital transformation. For many, that digital journey starts with the data.
Extracting value from analytics investment
According to a survey that EY conducted with Forbes Insights, the majority (66%) of global companies are investing upwards of US$5 million in analytics software, and 78% of organizations agree that analytics are changing the nature of competitive advantage. Yet only 12% of global companies describe their analytics maturity as “leading.” Those who were not “born” digital have a longer journey ahead than those who are capturing customer data and interactions digitally right from the start.
Organizations are investing heavily in the digital technology to capture data but are often struggling to derive value from the harvest. So what’s the solution?
The human element
Analyzing collected information with a human lens is where true business advantage lies. Without the human element, analytics is an informative tool to create a bank of information. To create value from big data, you need to intelligently analyze, review and act on data findings.
Data, at its best, should have the power to disrupt and transform. Results from rigorous analysis of short- and long-term data sets can confound an organization’s accepted wisdom and assumptions influenced by human bias.
The leading 10% of enterprises surveyed reported a “significant” shift in their ability to use data to help meet competitive challenges. They encourage data analysis to be performed by someone who knows the organization — someone who is fully aware of the business objectives in the context of culture and leadership who will inspire the right line of questioning. Rigorous questioning will lead to better answers and produce solutions that are fit for purpose.
To derive value and advantage from big data, you need big judgement and a strong company culture that truly embraces analytics.
Key steps to analytics success
Getting the full potential from data and analytics certainly isn’t easy – which may explain why so many companies are taking so long to adapt to the new data-driven world.
The EY-Forbes research found that 89% of organizations agree that change management is a barrier to realizing value. However, it also identified key areas in which organizations can adapt their behavior – across business silos – to build a business strategy fit for the digital world:
- Strategy and leadership: Make data and analytics a strategic imperative. The vision to energize and sustain data and analytics activities needs to come from a view of how the organization’s strategy may need to change in a digital world. This often means that new leadership may be needed that can architect and implement digital and analytics-related transformation.
- Analytics consumption – Organizational: Align the organization around data and analytics. The value of analytics comes from the behavioral alignment required to consume analytics, to move from insights to action to value. This often means that culture, organizational processes, business users’ skills and incentives need to change.
- Analytics consumption – Individual: Start with the end user in mind. First, the business problem or opportunity needs to be clearly defined. Then appropriate analytics solutions need to be developed, taking into account what changes a user will make in their decision-making and/or business processes. User centric design principles and an agile development framework are often helpful to achieve a test-and-learn approach.
The power of people
Successfully transforming the organization to be analytically driven often begins at the top. If the board does not see the value of an analytics-driven approach, other parts of the business will find it easier to resist the new data-driven approaches.
Appointing a Chief Analytics Officer and a Chief Data Officer at the C-level can be a good step to make certain business strategy is based on analytics and its potential value, while also confirming that analytics objectives are aligned with the board’s priorities.
Four skills data analytics leaders need
EY Global Chief Analytics Officer Chris Mazzei identifies four key skills and competencies that a data analytics leader needs to be successful:
- Business expertise: understanding the industry and where/how value is created
- Innovation: identifying where there is opportunity for driving change in the business model
- Solution architecture: identifying where to apply analytics and being able to bridge the gap between business and technical teams
- Human network-building: creating a large number of senior stakeholder relationships to get things done
Embracing analytics at every level
A Chief Analytics Officer can do much to raise the profile of analytics within an organization and be a catalyst for change, but a successful transformation depends on leaders at every level enthusiastically driving the analytics agenda – even encouraging people in non-leadership positions to act as analytics advocates to their peers.
This is the core thing to remember: despite all the technology behind big data, people are at the core of every successful initiative. Human judgment supported by data is what creates real value from big data analytics – and human resistance could see valuable insights ignored.