SAS report offers Rx for companies lacking in analytical capabilities

Effective communication and executive buy-in are essential elements for companies wanting to become 'analytical innovators,' according to software vendor SAS Institute.

Organizations experiencing problems getting their business intelligence and analytics programs off the ground need to step back, take a deep breath and ask themselves a few simple questions. At least, that's what I came away with after reading a new report from analytics software vendor SAS Institute and the MIT Sloan Management Review.

Mark BrunelliMark Brunelli

The questions include these: Have we started our program by identifying a single business area that can benefit from business intelligence and analytics technology, before pursuing enterprisewide initiatives? Have we built lasting relationships, encouraged discussion and shared information between departments in our pursuit of analytical excellence? Have we gained the support of high-level executives by creating an "executive communications plan" that quantifies the expected return on investment of an analytics initiative?

Organizations answering "no" to any of those questions have some real soul-searching to do, according to the SAS report. There are many other variables that go into whether an analytics program delivers the desired results. The list includes data quality, the tools being used and the analytical capabilities of the team using them -- and getting those things right is definitely important. But companies that go too big, too fast while lacking effective communication processes and executive support -- well, let's just say they're risking an analytics hull breach of Titanic proportions.

The SAS and MIT research report, "From Value to Vision: Reimagining the Possible with Data Analytics," is based on a survey of 2,500 business executives, managers and analysts conducted late last year. The respondents came from 121 countries and more than 30 industries, and the annual revenue of their companies ranged from less than $250 million to $20 billion, according to SAS.

The report highlights the different levels of analytics maturity among organizations, separating the surveyed companies into three categories. SAS said the survey found that 28% were "analytically challenged," 60% were "analytics practitioners" and 11% were "analytical innovators."

Analytical capabilities set innovators apart

The report describes analytical innovators as the respondents who strongly agreed that analytics has helped improve their organizations' ability to innovate, and has helped create strong competitive advantages over business rivals. Analytics practitioners use data mostly to address tactical and operational issues, while analytically challenged organizations struggle to use data beyond basic reporting and marketing applications.

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"The analytically challenged are stymied in their progress by core data issues, from upstream at the capture, quality, integration and access phases, to downstream, where data is analyzed and disseminated," the report reads. "To address these areas, companies must invest in improved infrastructure, processes and technology skills."

Organizations that are lacking in analytics capabilities can improve their lot in life by identifying one small part of the business that stands to benefit from analytics, focusing on that area first and ironing out any kinks that pop up before expanding the program, according to the report.

As the program expands, analytics program managers should foster collaboration across departments to identify and set analytics goals with measureable results. And they should work to optimize the use of internal analytics resources and identify precisely what needs to be brought in from the outside world. It's also a good idea to seek out people within the company who have an appetite for analytics.

Eat with the analytics geeks

"Find the internal geeks -- those who are hungry for analytical work -- and take a seat at their lunch table," the report reads.

While it's possible to be successful in analytics without top-down support, it's a good idea to take steps to gain that support. Consider the example of casino giant Caesars Entertainment, as described in the SAS report. To help instill a more data-driven culture, Caesars has been embedding "analytics missionaries" with the management teams at its various properties -- an approach that might not have succeeded without a solid commitment from top execs. "This has been a difficult change in management process that has required support from corporate executives at headquarters," the report says.

Based on my conversations with many analytics technology users over the years, I agree with SAS that one of the other most important keys to becoming an analytical innovator is remembering to focus on innovation itself. SAS points out -- rightfully, I think -- that analytics is about more than just generating and sharing business insights. Long-term success in analytics hinges on being able to turn those insights into real innovations that improve the bottom line. But for the analytically challenged, getting there means first improving their communications and tactics and their approach to the executive suite.

Mark Brunelli is news director for the Business Applications and Architecture Media Group at TechTarget. Email him at mbrunelli@techtarget.com and follow him on Twitter: @Brunola88.

Follow SearchBusinessAnalytics on Twitter: @BizAnalyticsTT.

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