Companies are failing to tap into valuable insights that could help them to achieve better business results.
A new Accenture survey released today shows conclusively that siloed data, poor technology and a lack of analytical talent are all to blame. The good news is that companies are looking to make changes today that will enable them to make more fact-based decisions in the future.
The survey showed that while two-thirds of all companies now view “getting their data in order” as an immediate priority, the longer term goal is the development of capabilities that enable behaviours and actions to be modelled, predicted and acted upon in real time (75 per cent of executives).
Surveying 600 respondents from UK & Ireland and US blue-chip organisations, the research underlined the urgent need for action. In almost 60 percent of organisations, data is still housed in isolated parts of the business.
Joined-up analytical capabilities remain the exception. And tellingly, almost 40 percent accept that their existing systems inhibit the effective use of enterprise-wide analytics.
The impact of this on performance is profound. The need for rapid, forward-looking decision-making based on reliable business insights has never been more pressing.
Whether applied to the roll-out of a smart-grid, a new clinical data management programme or the effective protection and exploitation of intangibles (such as IP), sophisticated analytics should be playing a key role.
The reality is that senior managers still fail to see fact- and data-driven analysis as critical when making key business decisions. Instead, they are relying mainly on gut instinct. This flies in the face of proven experience.
Companies that thrived in the wake of previous recessions were demonstrably those that used data-derived insights to generate lasting competitive advantage.
Instead of relying on gut instinct, senior decision-makers could be using tools and technologies that are already available. And those that do make analytic-based decisions could improve their chances of success by taking steps to ensure the consistency and accuracy of the data they use.
One of analytics’ most innovative capabilities is its ability to predict future business events. But the research shows that companies are failing to take advantage.
The analytics function is being used to a moderate/great extent only when examining market growth. Vital areas of the business – including risk management, financial modelling and skills requirements – are only using predictive analysis in limited amounts. Particularly surprisingly, given the importance of resilience in today’s environment, only 5 percent of companies apply predictive analysis to their supply chains.
Clearly, companies are missing out. But it doesn’t have to be this way. So what next? We’ve identified a clear sequence of actions that need to be followed:
- Understand what analytics really means (ie an integrated framework employing quantitative methods to derive actionable insights from data)
- Be confident that you have access to reliable, accurate data, and that you’re asking the right questions about customers, markets and competitors
- Develop systems to enable automated responses based on events.
For companies seeking analytical differentiation, two additional steps remain:
- Modelling and predicting behaviours and actions
- Enabling real-time optimisation through analytics.
As long as companies only use analytics in limited ways, they will limit their capacity to succeed. Our research shows that, of companies claiming to have an integrated performance management capability in place, only around 20 percent have any proven linkages between the metrics they measure and the outcomes the metrics are intended to drive.
Looking ahead, expect to see business leaders demanding much more from this function. Forced to compete on the “now what?” level, they know that looking back and learning from experience is no longer enough.
As technology has moved ahead, so descriptive analytics have been superseded by predictive analytics. These highly-evolved capabilities, properly integrated into and across the enterprise, will separate the winners from the losers in the next economic cycle.
Dave Rich is managing director of the Accenture Analytics Group