Monday, February 27, 2012

Analytics as a Strategic Capability

Analytics. The next frontier. First personal computing allowed us to work faster and more efficiently. Then web 1.0 brought an environment that allowed us to work with more flexibility. Web 2.0 made us social and gave us information about who we are, how we behave and what we like. Now it is time for analytics to bring it all together. The efficiency, the flexibility, the information - coming together to generate insights.

While the quantitative tools and techniques that are employed in analytics are nothing new, the convergence of personal computing, the web and social data position analytics to now be a truly strategic capability. The missing piece is organization that leverages each of these components into a cohesive package that delivers the right results to the right people at the right time with the right perspective. This is more than BI, more than a technology. It is a new way of doing business that recognizes the value of information, BUT ALSO is strategic about what problem it is trying to solve, and how that solution is delivered. All this takes people power and smarts that can't come off the shelf, and that understands business strategy, not just quantitative techniques and IT.

The reason why the business focus and perspective is SO important is because with out it, analytics can come up with a million answers, a million solutions, none of which address the real business problem at hand. Many analytics tools on the market make this very hard as they make it very EASY to thrash about in ones data, and to lose focus on why you were knee deep (now neck deep) in it in the first place. It is this axiom that drives the truth that business analytics be driven by business STRATEGY and those that define it. Business analytics should not be driven by technology - in fact technology should be the last consideration. This is not to say that technologists should not be included in the conversation, but they should certainly not be leading it.

So who is this uber businessperson that can lead the analytics of an organization? It is someone that understands technology, quantitative techniques AND business strategy. They are strategic partners with those that set business direction, but yet have the skills to guide or self execute technology and quantitative needs. They must elevate themselves above "number cruncher" status if analytics are to truly shape business strategy. They must see themselves at a business leader more so than a doer. It is this type of leader that can see the big picture and know how analytics fits in that will truly position analytics as a strategic capability within any organization.