A few things executives should know about their analytics initiative

inlytica, llc

Since the 1990’s we’ve been promised a transformation in the way that businesses were managed. Analytics and Big Data would usher in a new paradigm in decision making. This paradigm would be based on insights generated from a vast pool of data. No longer would we be dependent on fallible intuition and judgment. Evidence would rule. Dashboards would provide an intimate view of the inner workings of businesses. Executives would be able to call up vital information with the click of a mouse. And more……

Truthfully, is that the way your organization works in 2023? As late as 2021, a survey showed that only 29% of executives believe that they are “experiencing transformational business outcomes” from their data initiatives. In my experience, that’s probably high.

So, what happened?

Technology vendors will tell you that your current stack is inadequate (you need to implement AI). Business schools will tell you that you need to hire for a different skill set. Your internal data team will tell you that they lack resources. The incumbent software provider will tell you that their product was not implemented properly.

And, more and more often lately, everyone is pointing their fingers directly at YOU the executive. You don’t trust data. You are biased. You are too used to “going with your gut”. You are not “data literate”. You have not established a collaborative environment between data scientists and business people. Read any recent article on why data initiatives fail and the authors will wind up blaming leadership for not establishing an “analytics driven culture”.

The reality though is that you, the executive, the decision maker are not the problem. You are the solution. You were sold on a series of false promises that were never going to work. And, now, there are a few things you really need to know:

Your analytics system was not designed with you in mind
Analytics have become synonymous with dashboards and reports filled with increasingly elaborate charts, tables, dials, gauges, etc. Their primary purpose is for monitoring. They offer insights into operations which can be valuable for ensuring that initiatives are on course. But, the charts, dials, gauges, tables, etc. rarely help to understand what strategic questions you should be asking and what the possible answers are. The decisions you need to make and the environment in which you need to make them should be the driver of an analytics program. (And, by the way, AI is not going to solve this.)

Your judgment and experience are valuable and are not to be ignored
The idea that statistics would supplant judgment was flawed from the beginning because it was based on a misplaced faith in data. The reality is that very few companies actually have so called “big data”. Even if your organization possesses terabytes, it will likely still only represent a very small fraction of the data universe. And, that fraction will get even smaller when you start cleaning and filtering.

Keep in mind too, that your data store represents a historical view of the world. The information it provides will only be valuable to the extent that the future will look like the past – which is not likely.

The reality is that your judgment, beliefs, and experiences should be combined with data to produce an updateable forecast of the future.

Technology is less important than you think
A modern analytics program cannot be accomplished without some investment in technology. But buying and implementing software is not, in and of itself, an analytics program. That may sound obvious but the “build it and they will come” approach has dominated the space since the beginning. At this point, if you have invested any money into database and analytics technologies, you have probably invested enough – at least for now. The next step is to make sure that you actually have a plan to accomplish your goals and then evaluate your technology stack to make sure that it allows it for your plan to be implemented. And, remember to include tools like Excel when you are doing your evaluation.

For too long, the idea behind the analytics revolution has been that organizations should be redesigned to conform to technologies and data. However, the real revolution will happen when executives begin requiring that analytics conform to the way that they do business and make decisions.

To find out how we can help contact us.