Businesses often struggle to make the most of their analytics program — how can you improve your ROI?
In order to better use analytics within your organization, you first need to understand exactly how well you're using them now.
While data analytics is prevalent at most companies, organizations now must refine their approach and ensure they are truly deriving value from their analytics programs. A Harvard Business Review (HBR) report sponsored by Mastercard revealed that only 18% of respondent organizations have reaped sufficient returns on their analytics investments.
Leaders and Laggards
The HBR report categorizes companies into analytics leaders or laggards. Leaders have an organizational culture built around analytics that drives success, while laggards have more room to grow. Laggards can be less analytically mature for a number of reasons, but they often fall into three primary categories: they may not be using analytics in key decision-making; they may not have access to quality data insights and employees with the skills needed to interpret them, or they may have a lack of collaboration across business units.
By assessing your company against these criteria, you can identify key areas for improvement and take your analytics program to the next level.
Employ Analytics for Strategic Decision-Making
Companies with an opportunity to drive higher return on their analytics investments may not leverage analytics in business decision-making or uncovering business insights, relying instead on gut feeling. It could be that these decision-makers have tried and failed to adopt data analytics strategies in the past, or that they do not receive data insights in a timely manner. According to the HBR report, 54% of survey respondents said that analytics outputs failing to reach decision-makers or be integrated into the decision-making process is the greatest obstacle to analytics success.
To overcome this, it's imperative to incorporate analytics into core business processes. This creates more opportunities for data-driven insights to travel up the chain to those who need it. It also ensures that managers and executives at every level are using this information in their strategic decision-making. Although it takes an organizational shift for executives and other business leaders to take action based on insights, the approach works — the HBR report found that 84% of analytics leaders say that the pervasive use of analytics throughout their company contributes to their overall success. The survey shows that increasing access to high-quality data is key to enabling such pervasive use of analytics across teams, ultimately driving greater ROI on investment in this area.
Increase Access to High-Quality Insights
A common problem among analytics laggards, as outlined in the report, is: how do you derive valuable data-driven insights to inform business decisions? A lack of analytical skills and training may be to blame. In fact, 45% of all companies surveyed by HBR said that inadequate analytical skills among employees present a major obstacle to generating helpful insights from their data.
To truly become an analytics-driven company, data insights and analytics must be democratized among all employees. One way to do this is by centralizing this information in an easy-to-use analytics software platform. This will help maximize the return on your analytics investment and drive your organization's analytic maturity.
Enable Cross-Team Collaboration
Perhaps a company is actively using analytics for business insights and decision-making and is aware of the value analytics brings to the company, market share or bottom line, but they're still not seeing the results they had hoped for.
For companies in this predicament, data analytics is often siloed between departments or limited to executive decision-makers. Alternatively, it could be that those actively using data analytics simply aren't talking to each other as much as they should be.
The HBR survey found that 80% of analytics leaders reported significant collaboration between their business and analytics teams, compared to 20% of laggards. To become more analytically advanced, executive leadership needs to help foster a data-driven culture across the organization. By standardizing analytical processes across teams, employees will be encouraged to look beyond gut feel and make decisions based on analytical outputs. This will help create a common language around analytics results that technical experts and business teams alike will be able to understand, enabling them to better share learnings and translate insights into actionable recommendations.
Maintain a Leading Edge
For analytics-led companies, data insights enable decision-making and drive success for the entire organization.
Yet, even analytics leaders have their struggles. To avoid backsliding, analytics-led companies should regularly check that their use of analytics aligns with their business goals and continue rolling out data analytics platforms throughout the company, including to frontline employees. As demand for quality data insights rises, companies must be prepared to constantly improve the way they conduct analytics. It's the only way to stay one step ahead.
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