“In God we trust, all others must bring data.”
– W. Edwards Deming
How do you use data today to improve the performance of your business? I often ask this question when I speak to business leaders, customers and prospects to understand how they think about data. Having been in the analytics space for twenty years, I have never seen more interest in analytics than I am seeing now. With the arrival of cloud technologies and new innovations, turning data into improved productivity and better business results is high on the executive agenda.
No doubt this increased interest and awareness in the power of data is due in part to all the market excitement around Big Data. Regardless of industry or market segment, companies of all types and sizes are now adding big data to the list of business and IT priorities, often with little or no idea what big data is. Interestingly, business owners often have little idea what data is available to them today and they struggle to even articulate a strategy or to point to examples where data is helping them deliverable measureable return. While the data may be big, the business results to date have not been.
Mike Healey of Yeoman Technology Group just authored InformationWeek’s just published new research report titled, “The Six Lies of Big Data,” providing yet more color and some interesting statistics to the market trend and hype about big data. The survey of more than 250 business technology professionals provides a number of interesting nuggets which suggest both missed opportunities, and the promise of better productivity and performance.
Interestingly, when the survey asked about the organizational approach to data, 61% of respondents indicated that their organizations were either leading users or best in class and heavily guided by data to manage across the organization.
This type of response would suggest that data access and analytic applications are now pervasive, enabling everyone in the business to do complex analysis, build scenarios and plans, and deliver real business value. Has the era of easy access to information to optimize and take action to improve performance finally arrived?
Not so fast
A review of the survey responses starts to reveal a different picture. Similar to discussions my team has with prospects and customers, there is high interest in capturing and using data, but most companies are still stuck with legacy tools, disconnected solutions and no connection between operational plans and business reality. Enterprise solutions, business owner access, and IT readiness is not there yet.
The first big reality check for many companies is in the solutions they make available to the business. Often these are point solutions or dashboards, supported by analysts behind the scenes with highly customized tools and spreadsheets. This is reflected in the IW survey. Excel as a big data tool is not an enterprise strategy.
When you dig into some of the additional details of the survey, the picture gets even worse.
- Only a third of companies plan to spend more on training and development around data analysis
- 17% are growing staffing around analytics, while 14% are cutting back
- 65% of companies are using Excel, with 20% of all analysis happening via Excel spreadsheets
Most organizations aspire to making analytics – capturing and making data that helps people optimize and act to improve performance – a core competency if not an area of strength in their organizations, but there are few companies where this is true today. Even with highly sophisticated teams, analysts across departments and even data scientists, it is the rare company that can connect data and people to deliver advantage.
Big Data vs. Small Data
Most organizations struggle to get meaningful, sustained value out of their small data sources, much less tackling “big data.” This includes basics like CRM data, HCM and ERP data, much less web and social data. And to the degree they do capture and extract the information, the leading technical approaches include Microsoft SQL and information discovery tools and the latest appliance from Oracle. None of these solutions are particularly business user friendly, and can’t bring all the data together in a way that makes it easy for business people to do analysis, much less find the trend, manage risk, or proactively manage.
Tellingly, when respondents were asked for the biggest barriers to successfully using Big Data in the organization, the number one barrier to success was budget.
With almost 40% of respondents claiming financial hardship, the data seems to suggest that Big Data is perceived as yet another IT project and added cost vs. competitive advantage for the organization. It is safe to say that all the vendor and tech press excitement about big data has yet to materialize in business cases that show repeatable and measureable business productivity and impact.
Big data is meaningless unless it is connecting to meaningful business value – faster inventory turns, cost take out, increased sales velocity, improved customer satisfaction. Data and other projects that can’t directly improve the way people do their jobs is of low utility for most organizations.
The hidden gem in the report is the reference to Erik Brynjolfsson’s MIT research on publically traded companies that focused their decision making on data analysis. Of the 179 public companies he surveyed, Brynjolfsson concluded that companies using data-driven approaches to decisions had 5% to 6% greater productivity than their peers. In short, a culture of data driven decision-making consistently applied produces superior results.
When you apply 5% improved productivity to a large organization with tens of thousands of employees, the impact can be substantial, especially when compounded year over year. Making data and analytics available for all users across the departments and functional areas delivers meaningful return. When we talk about re-imaging business analytics for everyone in the business to change the way they work, this is exactly the type of performance gain we believe companies should expect.
The discussion and hand waving around Big Data could be just a passing trend. What is not, is the need to turn any and all data into context and action for the business user.
Time to bring the data – big productivity awaits.