Creating a Culture of Analysis
Despite these nominal developments that might otherwise be taken as presaging a new "culture of analysis" for business management, there is a widening gap between the ability of the new technologies to deliver information beyond management expectations and the actual use of that data by management to make improved business decisions. This article will discuss the technology gap, building a culture of analysis and risk management data application.
The Technology Gap
Companies frequently encounter the widening gap between technology and decisions because as businesses rapidly change with external factors (i.e., the competitive landscape) and internal factors (i.e., mergers and acquisitions, product and business strategy), there remains an inability of associated data structures to keep pace. While different technology vendors and data incompatibilities are often to blame, lapses in defined processes commonly lead to loss of important data. For example, during a company merger, the history and meaning of a company's data, resident only in human repositories, may be lost due to changes in the workforce.
Other times, companies don't have a strategy for managing and using that data, limiting the ability to successfully leverage data analysis into a viable business strategy. Successful analytics are not simply about having access to information, but also taking that information and framing it into a context with which to make decisions. In other words, the best technology in the world is useless if the right people and processes are not in place to leverage that technology.
As companies become increasingly adept at extracting and analyzing data, ironically, they often become slower to act. This "analysis paralysis" is a result of too great a focus on getting as much data as possible and not enough focus on developing strategies based on using the right data. The successful enterprise effectively extracts only the data required to make a decision and quickly turns that data into action. While the importance of analyzing the data cannot be underestimated and undervalued, it must be balanced by processes that quickly impart information to key decision-makers and allow for swift execution of strategy changes when the data uncovers the need. Although a fine line, there is a distinct difference in the results garnered from a "technology dependent" organization and a "technology-enabled" organization.
Building a Culture of Analysis
Technology-enabled organizations have a common set of attributes that allow them to successfully integrate their people, process and technology. These include:
- Executive and top-down commitment to analytics and their applications.
- Flexible, efficient processes to execute new rules.
- Technology that is appropriate and properly utilized throughout the organization.
A commitment to analysis means that a consistent, deliberate and replicable approach to decision making is undertaken when possible. In order for this to happen, there must be an almost reflexive understanding of the value that data provides, the ability to turn that data into actionable analysis and the commitment to follow through on those actions. The elimination of strategies devised on "gut feel" allows an organization to truly assess its successes and failures and define clear-course corrections in a structured manner, resulting in more efficient operations.
Additionally, establishing at least one position of responsibility to be the "human repository" for analysis of data issues will ensure a consistent view of data and allow the analytical culture to permeate the organization. The person in this role communicates and assists in all data-related issues within the organization and also facilitates data analysis externally with consultants, vendors and suppliers. While there are a number of areas for which a business can outsource analysis, a competitive organization must internally commit and retain some analysis faculty.
The development of an analysis culture involves a number of change management practices that will not be discussed in this article; however, the hiring process is one area that cannot be overlooked as an organization moves forward. The hiring of analytic talent should be reflective of the desire for an analytical culture, with an emphasis on acquiring individuals who have developed their analysis skill sets by solving real-world problems.
The natural result of an analytic culture is frequent changes in strategies as new information is uncovered. As the environment changes, the strategy and rules used to make decisions must be modified accordingly. A decision environment and the processes that exist within an organization must allow these shifts to be executed swiftly and frequently. Frequent strategy and associated time-sensitive system rule changes can lead to costly mistakes; therefore, it is imperative that the processes be as automated and error-free as possible. Frequent and routine process review combined with intense quality control and documentation is imperative in creating an environment where analysis can flourish.
Technology for technology's sake is not a healthy strategy for an organization. Simply having the best data or the fastest hardware will not lead to the right decisions. The technology that is used must be able to provide the right information at the right time - no more, no less. Before undertaking any technology project, a thorough scoping of needs and identification of goals is essential. This allows the correct technology level to be identified and implemented, ensuring that the organization is neither saddled with unused capabilities nor hindered by inadequate capabilities.
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