Deriving Value from Data

“YOU HAVE TO AUTOMATE THE DATA SCIENCE TO TURN SYSTEMS INTO INFORMATION SYSTEMS THAT WORK WELL.” KRISTIAN J. HAMMOND, NORTHWESTERN UNIVERSITY

What’s holding organizations back from making more of these investments that ultimately enable them to derive more value from their data?

 “People say data is the new oil, but for many companies, it’s the old oil: predominantly sitting in barrels waiting to be processed in a refinery in order to provide value,” says Shimmin. “They think data is worth money, but they haven’t seen it put any cash in the cash register. They need to view their data stores as not just oil stored in barrels, but something they need to process to turn into someone actionable and valuable across the business.”

Connecting the dots between the capabilities that enable insight and the resulting business value is key. Eight out of 10 respondents overall say it’s important to measure and report on the business outcomes of their data and analytics investments (93% of leaders say so). But many organizations have difficulty accomplishing that. A little over half of leaders (58%) indicate that they are extremely effective at measuring and reporting the business impact of data analytics and investments, while only one out of 10 of the rest of respondents say so. It’s an area where all organizations can improve. “It’s a causality problem. When people think about identifying business value, they want to say ‘we did this and out came that,’” says Brunsman. That’s difficult to do unless you’ve structured a specific inquiry around data to, say, optimize a marketing campaign. The connection between data, analytics, and business outcomes can be fairly abstract.”

But measuring and reporting on those discrete wins can illustrate what is possible on a larger scale. And those possibilities are proven out by the leaders. The decisions they are making to succeed where others struggle— whether that’s adopting and managing multi-cloud environments, investing in the necessary capabilities, or democratizing data and analytics in the organization—appear to coincide with real business benefits.

A mid-level operational decision based on data analytics or a strategic decision about entering a new market that has a long-term payoff can be more difficult to pinpoint. “You need a framework for doing so,” says Vesset.

That will require a combination of qualitative and quantitative analysis to assess the quality of decisions made. “Oftentimes there is a tendency to want to take data and connect that directly to higher revenues or profit, but that misses a step in between,” Vesset says. “You need to measure the impact on the decisions you’re making. Are you making them faster or better? Did you have the right analytics to make them?” Then organizations can connect the dots: better decisions drive better outcomes. And leaders are seeing better outcomes.

1.     They not only saw significant increases in operational efficiency over the past year (46% say so versus 20% of others), but also saw significant lift in more strategic metrics of performance.

2.     Nearly twice as many leaders as the rest have seen both revenues and profitability increase significantly.

3.     Likewise, employee satisfaction has grown significantly for more than double the number of leaders as other respondents.

4.     Customer retention and loyalty are up significantly for 36% of leaders versus 19% of others, and their data and analytics expertise is fostering greater innovation and winning more market share.

5.     When it comes to innovation and expansion, a full 35% of leaders are introducing significantly more new products and services, compared with 23% of others, and 33% of leaders have seen their market share surge, compared with 15% of others.

Read More : https://hbr.org/resources/pdfs/comm/google/GoogleTurningDataIntoUnMatchedBusinessValue.pdf