Consider this scenario: You are about to embark on a major analytics effort, and you want the program to meet current needs, provide a solid foundation for future growth and change, and gain significant business adoption. You also know that your organization does not have the best track record when it comes to implementing enterprise-wide information technology initiatives – in fact, a few have been truly disappointing.
You have taken a close look at those less-than-stellar previous initiatives and analyzed the results against known critical success factors. The people involved were highly skilled in their respective areas, and the teams had the right skill sets. The approaches used were demonstrated, and the solutions were technically elegant and met the specifications well. Even the underlying processes were solid and followed the business rules. So why did these projects not meet your objectives, and how can you apply lessons you might learn to your analytics initiative?
Often, technology or process design is not a cause of failure with IT initiatives. Instead, it can be with something seemingly simpler, yet sometimes harder to obtain: failure to gain and keep executive buy-in. Executive buy-in is more than obtaining funding or approval for an initiative. It is about securing and nourishing an ongoing commitment for support and guidance for the project.
However, with an analytics initiative, the stakes can be even higher. Because the implementation of an analytics initiative will require a change in the way the organization thinks about decision-making, the concept of executive buy-in takes on a more critical meaning. For an analytics initiative, executive buy-in means that there is an executive-level commitment to shepherd the project through the inevitable political battles and to make the tough decisions regarding changes to business strategies, operating models, business processes, organizational structures and organizational culture that can occur as a result of the initiative.
Why Analytics is Different
Executive buy-in is crucial to meeting the objectives of any IT project, but there are several respects in which analytics initiatives have different requirements for buy-in from the C-suite. Since an analytics initiative can impact every part of the organization, it is absolutely critical to gain buy-in from the executives across the organization regarding the initiative’s ability to align with their individual objectives – and of those of the organization as a whole. Collaboration is key here. It will be necessary for the entire C-suite to be on board and to collaborate in the implementation of any analytics solution devised.
Analytics is also different in that it can require a significant change in the way business decisions are made, and as a result change management becomes a big issue. Many executives still rely on experience and “gut feel” to guide their decisions. Business intelligence information is crucial in decision-making, but if there is a conflict between information and intuition, intuition often wins.
However, in order for an analytics initiative to provide high value, the culture of the organization must shift to a fact-based decision-making model. Such a change can be best implemented from the top, because it often takes a strong executive push to get line-of-business management to change. In the end, though, if senior management sets the example and drives the process, behavioral changes can be established.
It will also be critical to gain buy-in to revise the skills matrix needed for IT. Analytics may require the acquisition of new skills sets or cause increased emphasis on existing skill sets and roles (such as statisticians and quantitative analysts) that are not normally visible within all parts of the organization. These people have the analysis skills to understand and leverage the sophisticated mathematical models that are typically found in analytics technologies. However, it is not enough to acquire analytical thinkers. Often, these great thinkers need “translators” to bridge the gap between the quantitative language of analysis and the qualitative language of business – in essence, to translate the language of mathematical modeling into business terms so that their insights are understandable, can be made actionable and can be expressed through visualization.
The final way that analytics is different is that without sponsorship, it can fall to the wayside. Because it is a complex and quantitative undertaking that requires a shift in the way the entire organization thinks about the business and it provides value to the organization as a whole, the C-suite must champion the initiative so all levels of the organization will adopt it more readily; otherwise it can die. So, it is essential to showcase the value of analytics by demonstrating the ability to drive not only hindsight, but also insight and foresight (as illustrated in Figure 1), right out of the gate.
Getting and Keeping Executive Buy-In
Just because executives or people from the business are asking for an analytics initiative, it is not always the case that executive buy-in already exists. The challenge becomes one of securing and maintaining executive support that will be so critical to your analytics initiative, now and for the foreseeable future.
The first step to getting executive buy-in for an analytics initiative is to determine how to explain the progression from BI to analytics (see Figure 3) in easily understood business terms. Start by making the case for how the proposed analytics solution will align with the overall corporate goals and objectives. Get specific. Do not talk about increasing the customer base or becoming more profitable.
Make the case to the head of marketing how analytics can help him/her see why value-based segmentation (the revenue a customer brings in and how much it costs to acquire and keep that customer) is a better strategy than traditional segmentation (customer demographics and attributes). Compare the results of traditional customer segmentation to the projected results of a value-based segmentation model.
Likewise, help the head of product and pricing management understand how analytics can help develop better pricing strategies, such as a shift from cost-based to value-based pricing that is linked to the value it creates for the customer. Compare the results of cost-based pricing to the results of a projected value-based pricing model. You get the picture of where I am going with this.
Once you have shown the value of analytics to the C-suite, the next step is to start building the case for analytics. First, it is imperative to conduct an honest self-assessment of your current IT capabilities vis-à-vis analytics. The assessment should include data management, BI, performance management and advanced analytics domains. Those capabilities should be benchmarked against an analytics maturity model spectrum that ranges from nonexistent capabilities to leading capabilities (see Figure 4).
Once you have determined your current capabilities, the next step is to determine which business questions matter most to your industry, strategy and priorities, and which of these questions is most critical to answer first. It is also essential to quantify the value your organization will realize from answering these critical “crunchy” questions. If executives see how analytics can help them ask and answer the questions that are most important to them, they will be more likely to champion the initiative and make the resources and funding available as needed.
Getting executive buy-in is a challenging task, but maintaining it can be much more difficult - especially with analytics initiatives that tend to become enterprise-wide multiyear efforts. To maintain executive buy-in, it will be critical to show measurable success early on in the initiative. One way to achieve a quick win is to identify a pilot initiative that will really showcase the value of analytics to the organization.
Picking the right pilot project is not an easy task, however. It is a delicate balance of selecting a business area or problem that is narrow enough in scope to quickly show results yet broad enough to not be seen as an isolated point solution. This is crucial because the pilot must serve as a foundation for the enterprise analytics initiative.
There is no single right answer for which pilot project is “best” to start with. The answer will be different with respect to industry, and it might even be different within the same industry. Each organization is different, and so your pilot project should be selected by how well it meets your most pressing or visible needs.
User engagement can also be fundamental to securing and keeping executive buy-in. The pilot should showcase the power of analytics to turn complex mathematical models into easy-to-interpret graphics that provide actionable information to the business users, based on their individual roles and perspectives. Executives must really be able to “see” the value, not just imagine it. Figure 5 illustrates the power of visualization in analytics.
There are a couple of additional issues to consider in moving forward with the pilot. First, it is essential to avoid “analysis paralysis,” which is the mistake of spending too much time on analyzing the right way to move forward instead of actually moving forward. It is not necessary to have quality data throughout the enterprise or to have all of your business processes streamlined at this point. Instead, start with low-hanging fruit; go with what is most ready, and build as you go. Otherwise, the effort could lose momentum or even die before it gets going.
It is also vital to develop a roadmap to guide the initiative through subsequent phases. This roadmap should detail the future phases of the analytics initiative. It should also address the significant change management challenges that lay ahead as communication strategies and the skill sets required to move forward from the pilot.
Importance and Benefits of Executive Buy-In
There is not an adjective strong enough to describe how critical executive buy-in is to the ability of an analytics project to meet the desired objectives. Without it, the initiative has little chance of success because it brings such a significant shift to the organizational decision-making process. One of the primary benefits of getting and keeping executive buy-in for an analytics initiative is that it is backed by a chorus of championing voices that are an integral part of the effort.
This is especially helpful when the journey is a long multiyear effort. The executives serve as a rallying force for the organization to remind the project team – and the enterprise as a whole – of the importance of the initiative to the business.
When there is solid C-suite support for analytics initiatives, there is often a quicker path toward resolution of issues and disputes that will inevitably arise. Executives who have bought into the success of the analytics initiative can recognize the criticality of the program to the overall success of the business in meeting its objectives, and will be more likely to make decisions quickly to maintain momentum. With quicker decisions and solutions to problems, results can be delivered more rapidly and effectively.
Analytics will become increasingly important to many types and sizes of business in the very near future. It will be crucial to develop analytics capabilities to compete and thrive in the marketplace. Those organizations that have strong C-suite support can be better positioned to implement and benefit from analytics solutions. That top-down drive to change the culture of decision-making, leverage analytics more deeply and thoroughly understand the business environment (and the forces that shape it) will be founded upon the buy-in of most, if not all, of the key executives in the organization. Without this critical foundation, the analytics initiative will most likely be compromised. With all that at stake, why take that chance?
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