Many Organizations Miss the Mark on Analytics
By Samuel Greengard
Although analytics isn't a new concept, it's attracting growing attention among business and IT executives looking to take their organizations to the next level. However, a new study from Accenture finds that only about one-fifth of organizations are satisfied with the business outcomes of their analytics initiatives.
Simply put, a disconnect exists between the analytics capabilities organizations have built and how successfully they've put them to use for business decision making.
"It has become clear that we are not yet at the stage where analytics is fully embedded in an organization's DNA," says Brian McCarthy, managing director at the Financial Services Analytics Practice for Accenture. He says that a number of barriers stand between an organization's investments in analytics and achieving the desired business outcomes driven by these efforts.
The survey of 600 executives in the United States and the United Kingdom revealed that 66 percent of organizations have appointed senior figures, such as chief data officers, during the last 18 months. These executives typically manage data management strategies and policies, and they focus on business growth.
Accenture found that the use of analytics as a primarily predictive tool has almost tripled—from 12 percent in 2009 to 33 percent today. Meanwhile, the number of organizations generating new ideas and opportunities from company data "to a great extent" has swelled from 12 percent to 25 percent during the same period.
However, only 22 percent of respondents said they are "very satisfied" with business outcomes driven by their analytics investments to date. Furthermore, only 39 percent of organizations stated that the data they generate is relevant to their business strategies, and only 50 percent said their data is consistent, accurate, formatted and complete.
"Analytics remains the new kid on the block, but it is clearly moving on to the C-suite agenda," notes Narendra Mulani, senior managing director of Accenture Analytics. "Although companies are investing in resources and advanced technologies, analytics is not yet deeply ingrained into the fabric of most companies as an integrated, enterprisewide approach."
Remarkably, 45 percent of respondents described their analytical capabilities as either in need of improvement, limited, lacking senior management support or piecemeal. Another 20 percent said they have the required technical and human resources to apply analytics regularly with some success, though the focus tends to be tactical rather than strategic.
One of the biggest problems, McCarthy says, is that organizations are "focusing on analysis at the level of a department or function. They're losing the opportunity to glean greater insights that can have a larger positive impact on the business. Only one in five executives said analytics is routinely used very successfully as part of an integrated enterprisewide approach."
McCarthy adds that organizations must find a way to weave analytics into the mainstream of the business. Companies also need to focus on the entirely different skillsets that are required for predictive analytics.
"Unfortunately, those that confine analytics to one-off initiatives and do not embed analytics into the business will fail to extract the maximum value," he concludes. "They won't see the desired business outcomes driven by their analytics efforts."