What’s holding back organizations’ analytics efforts?

Thoughts on the most formidable obstacles: people and culture.

I’m knee-deep into my new position teaching at the W. P. Carey School at Arizona State. One of my courses is CIS450: Enterprise Analytics. In it, seniors undertake a capstone project designed to provide real-world experience. They work with organizations that want to delve into their data and understand their businesses better. It’s a group-based internship on steroids.

Sounds promising but, since I’m new to the Phoenix area, I wondered whether or not I’d be able to wrangle together a sufficient menu of projects for my students. It turns out that my concerns were misplaced. On the contrary, there was no shortage of organizations whose representatives were willing to volunteer their organizations. In fact, I had to reject several companies’ proposals. (No bother. There’s always next semester.)

My students will soon enter what appears to be a great job market for those with advanced quantitative skills. Based upon their somewhat limited experiences, though, they may walk away with the impression that all companies want to use data and analytics to garner valuable insights. Unfortunately, nothing could be further from the truth. The term selection bias certainly comes to mind.

Unmistakable Trends

The trend towards analytics is unmistakable. Exhibit A: Google Trends over the past twelve years:

Clearly more people are searching on the term analytics compared to the mid-aughts. But are more organizations actually making data-based decisions? The evidence points to the affirmative. Consider this IBM report that suggests as much:

analytics

These types of numbers don’t surprise me, but I started thinking about why even more organizations haven’t taken the plunge. I’ve not seen compelling data on why so many laggards remain, but I can say this: the reasons clearly aren’t technological or even financial. (Data storage has never been cheaper.) They’re human, cultural, and organizational.

Make no mistake: the trend towards analytics is unmistakable.

As I know from my research and consulting experience, plenty of people are embracing analytics. Perhaps we’ll get to a point at which we’ll use analytics as frequently as we send e-mail. We’re certainly not there yet, though. Far too many folks at successful and mature organizations are unable—or, more likely unwilling—to look at issues through a data-oriented lens.

In no particular order, these folks fall into the following buckets:

  • Some are dataphobes and have been ever since they began their careers.
  • Others generally fear change and what data may manifest. Maybe they’re not doing their jobs as well as they can. Maybe their decisions don’t stand up to scrutiny—and they don’t want to ask the question.
  • Then there are those who claim to be “too busy” to learn new applications and methods, but odds are that they’re just trying to bide time.

Simon Says: As usual, the soft stuff is the hard stuff.

For a long time now, progressive organizations have been using data in interesting ways. Does that mean that everything can be quantified? Of course not, while rare, data-centricism can drive good employees to quit. Finally, there’s still a case to be made for strong product leadership and risk-taking irrespective of what “the data” suggest. (Cue alleged Henry Ford quote.)

Until senior managers force recalcitrant employees to get with the analytics program, expect more excuses than action from groups, departments, and entire organizations convinced that analytics doesn’t apply to them.

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