Originally published by Bernard Marr on LinkedIn: Why Investments In Big Data And Analytics Are Not Yet Paying Off
Working smarter, rather than simply investing more, is the key to gaining value from Big Data and analytics in business, according to a new report.
The report, Broken Links: Why analytics investments have yet to pay off, from the Economist Intelligence Unit (EIU), found that although 70% of business executives rated analytics as “very” or “extremely important”, just 2% are ready to say they have achieved “broad positive results”.
I had the chance to speak to the report’s author, Dan Wetherill, ahead of its publication today. Wetherill, an associate principal at ZS, told me “This is the kind of metric which we would hope to have seen much higher. But many companies are just starting down this journey – it isn’t just that they haven’t hit the bar – they are moving towards that destination.”
The report surveyed 450 senior executives from US companies across sectors including technology, pharmaceuticals, finance, manufacturing, travel and hospitality.
The sample was split evenly between professionals working directly with data analytics, and those responsible for business performance.
Interestingly, the results seem to suggest, according to Wetherill, that many of the obstacles stopping companies from achieving real value are caused by communications difficulties between these groups.
While many reported that their organizations had invested heavily in creating data science capabilities, “We didn’t necessarily see this as something separating the leaders and the runners-up.
“The distinction was actually in how executives collaborate – between the business and the analytics function leads.”
Indeed, the survey found that just 41% of participants thought that this collaborative relationship between data and business executives exists at their company. Diving deeper into the figures, among “leading” companies, this figure rose to 55%. And among companies not rated by the respondent as “leading”, it fell to 37%. This clearly backs Wetherill’s belief that this is an important metric.
Another common problem facing companies attempting to adopt a data-driven strategy is the lack of the right data at the right time.
“It’s partly a problem of availability”, says Wetherill. “What that leads to is being faced with difficult decisions at times when they might not have access to the information that they’d like.
“That forces them to rely on gut instinct more typically than they would like.”
Broadly the survey identified three areas where businesses are running into difficulties in extracting value from analytics. These are all areas which analytically-inclined companies can benefit from re-examining from the ground up and implementing changes where deficiencies are found, it suggests.