5 Predictions About Analytics, 4 Tips to Get Started & 3 Cautionary Thoughts

This is the time of year for predictions and there is no shortage of them in the analytics arena. As business owners and managers are redoubling their efforts to find competitive differentiation amid tepid growth projections for 2011, analytics is seen by many leaders as a way to gain an edge.

There are a few key predictions that are shared by seasoned analytics champions and neophytes alike:

• Organizational data is proliferating at an alarming rate, both in terms of volume and complexity. How to make sense of all of this data will be a challenge for those not on the analytics bullet train.

• Desktop analytics will dominate the business environment, making large servers and high cost analytic languages no longer able to return the desired ROI.

• Mobile applications will be hot topics. Devices like iPads, smart phones and tablets will bring analytics into end users’ hands like never before.

• The gap between heavy analytics users and laggards will continue to widen and it will become apparent in areas like innovation and product development as well as bottom line results.

• Privacy regulations could make the collection of personal data more restrictive. At the same time, individuals may balk at the idea of how much of their private information is in the hands of third parties.

Michael Lock of the Aberdeen Group and Caroline Seymour of IBM’s Mid-Size Business unit have some helpful pointers for companies that are taking their first steps into business analytics:

Get Control of Your Data: This means bringing disparate buckets of data into a consistent environment so it’s easier for more people to perform multi-dimensional analysis.

Analyze Data in a Business Context: Data analysis in isolation provides no insight and therefore has limited value to the business. Analytics works for the organization when there is a business strategy to address outside pressures, an assessment of capabilities and analytical needs and the ability to use analytics across the organization.

Think Big – Start Small: This is what Michael Lock calls the Land and Expand strategy. Start with one unit or one pain point and work up to the enterprise level of data consistency. Match resources to the company’s budget.

Empower Non-technical Users: 77% of the Best-in-Class companies measured by Aberdeen Group have what they call “pervasive Business Intelligence with self-service usage”. Only 10% of the Laggards have it. End users have the business knowledge, the business context and the ability to create insight from data.

I’ve been involved in so many fads du jour, from reengineering to knowledge management. All of the concepts were stellar but became hijacked by (gasp!) consultants selling technology or off shoring services or some effort to gain short-term advantages. The problem seemed to be either that the ROI assumptions were inaccurate or that consultants rarely stayed around to see the business through the painful change that inevitably comes with disruptive innovations.

Now for the words of caution...

Leaders Drive Change. That’s what GE’s CEO Jeff Emmelt says and I believe him.

Culture Trumps Strategy. Becoming an analytics-based business means behaviors change across the board. This is often left off the To-Do list.

The Collective Mindset Needs to Shift. If data is a source of power in the organization; if people think they’ve been successful making “gut” decisions; if collaboration isn’t in your vocabulary, you have some work to do to build a successful analytics-based company. But, the rewards are going to be huge.