By following a few simple steps, organizations that have struggled with analytics can successfully transition to a data-driven culture.
Today, most organizations across industries understand the need for and value of adopting a robust analytics program. The most successful data-driven organizations use their knowledge to reduce risk, overcome challenges and stay competitive. So why are some executives so reluctant to embrace this reality? The truth is, many organizations have an opportunity to create a more data-driven culture. In fact, just 18% of executives surveyed in a Mastercard-sponsored Harvard Business Review (HBR) report are happy with the return on investment from their analytics programs, and only 27% agree or strongly agree that their organizations base strategic decisions on data.
When organizations are not seeing the expected ROI of their analytics programs, they're left wondering: what's the real value of data analytics? How can I unlock its true potential?
The Real ROI of Data Analytics
In the competitive retail environment, innovation is the only way to stay ahead. However, true innovation must be tied to business strategy, and research shows that there is room for growth here. In fact, according to a report of leading consumer-facing organizations, over 40% of business ideas do not break even.
That's why it's important for businesses to learn to fail and fail fast. By taking a test-and-learn approach to new ideas, retailers have been shown to gain significant value by making decisions using fact-based insights rather than gut instinct. Retailers seeking new opportunities for strategic innovation test ideas in a variety of areas, including marketing and promotions, products and merchandising, labor and operations and pricing and capital expenditures. This process can enable retailers to make data-driven decisions around the right investments to keep market share, resulting in higher loyalty, satisfaction and profits.
So how can your organization capitalize on these best practices to drive analytics ROI?
Creating a Strong Analytics Culture
If you're ready to maximize the value of data analytics in your own company, here are some tips to become more data-driven.
Build your organizational culture around analytics. Be sure executive leadership is displaying their commitment to data-driven decision-making by setting clear strategic and operational analytics objectives.
Deploy analytics across the business and integrate their use into the workflow and daily practice for all employees, including those on the front line.
Give everyone easy access to dashboards and reports so they can gather insights in real time and take action accordingly.
Develop strong analytical skills inside the organization, and encourage collaboration between business users and analytics experts.
Create metrics for analytical success, and develop a test-and-learn culture that gives everyone a chance to participate, resulting in stronger insights.
Becoming a data-driven organization won't happen overnight, but if you follow these recommendations, you'll be on your way to driving value well beyond what you could using gut instinct alone.
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