The fundamental principles of an insight-driven organisation (IDO)

Billions of people worldwide maintain an active digital footprint on web and mobile platforms. As such, consumer data is both ubiquitous and readily available on a massive scale. Organisations must now monitor an abundance of structured data (e.g. captors in supply chain or Internet of Things (IoT) devices) and unstructured data (e.g. brand or footfall auto-detection).

Access to big data enables every organisation to gain a better understanding of its market, opportunities or customers.  The practice of systematically using data for decision-making has been growing and organisations who adopt its basic principles are referred to as insight-driven organisations (IDO).

What is an IDO?

An IDO refers to an organisation that uses data-driven insights to make robust evidence-based decisions, which vary in size and may have internal and external ramifications. In an IDO culture, scientific, tactical and strategic decisions trump those compelled by intuition.

IDO organisations use data-driven processes to foster a culture of big data analysis. Becoming data-driven is a holistic transformation that requires individuals, process and technology to be successful. The organisation will also need to define a vision of how data, analytics and digital can be used to add value across the enterprise. It is fundamental to shaping and growing insight-driven capabilities and culture.

What are the benefits of an IDO?

The primary benefits include but are not limited to the following: 

• An enhanced bottom line and higher degree of efficiency, as resources are utilised within the scope of comprehensive, well-planned initiatives;
• Superior customer service and satisfaction, as data provides a deeper understanding of target audiences, which promotes customised, relevant and highly engaging consumer experiences;
• Tangible financial benefits arising consistently and reliably;
• A comprehensive data eco-system that provides all descriptive and explanatory analytics the business needs, when it needs it. The same eco-system is future-proofed and capable of delivering predictive and prescriptive analytics where required, to enrich the insights of your organisation;
• Better risk management and reduced margins of error, as actions are carried out only after careful examination of available data.

What are the dimensions of a successful IDO?

Whilst leading organisations have made significant progress in developing analytics capabilities, they often struggle to structure their Strategy, People, Processes, Data and Technology to cope with the rising volume of information and the ever-increasing demand for analytical insights. There are the five key dimensions crucial to the success of an insight-driven organisation.

1.   Strategy

An IDO culture advances the strategic imperatives of an organisation.  If the prevailing competitive strategy of an online software service, for example, is to become a leader in customer support, an IDO system can ensure the attainment of this objective. Amazon is one of the finest examples of an IDO that utilises artificial intelligence (AI) and algorithms to achieve high levels of customer engagement and satisfaction.  

Successful strategic planning processes identify key strategic priorities. They also pinpoint areas in which data and analysis need to be put in place to attain core objectives.  For example, if a company’s strategic priority is to expand its millennial customer base by ten percent over the next five years, all resources and data should be marshalled to support this undertaking.

2.   People

Insights derived from AI and other forms of big data have now become an organisation’s key currency and determinant of success.  Companies depend on employees with the capacity to comply with the expectations of an IDO-led culture.

Successful IDOs use talent searching, competitive hiring, professional development, company-sponsored certifications and even hackathons to cultivate employee upskill, competencies relevant to the use of IDO systems.  According to the World Economic Forum, companies are expected to invest nearly a trillion dollars in data analytics and AI talent in 2018.  

Business and data analysts are now frequent assets to an IDO, as they not only process and ‘wrangle’ data and insights but also advise departments making decisions on strategic initiatives. A data analyst’s role is thus to ensure that an organisation follows IDO best practices.

3.   Process

A successful IDO depends on leaders and employees who communicate, apply, and model well-defined practices. As such, a mind-set that prioritises evidence-based decision-making should permeate an organisation. This requires a change management approach that should begin at the top of an organisation and proceed to subordinate levels. A group or team consisting of senior leadership and departments needs to be put in place with the sole mission of evangelising and effecting the IDO change management process.

A change management process can be a challenge; however, a well-executed one can aid in developing an IDO’s ‘keystone’ habits, such as clear problem definition. When presented with an issue, employees tend to immediately steer the conversation toward potential solutions. An IDO best practice ensures that such conversations begin with questions; problem-solving emerges once everyone has a clear understanding of the issue itself.

4.   Technology

A robust and secure technology infrastructure is the foundation of a successful IDO. Whether stored in the cloud or on-premises, data must be accessible anytime and anywhere. Easy access to reliable, comprehensive information enables IDO stakeholders to make informed judgment calls. 

Technologies such as Hadoop clusters or data lakes help companies store and process data from various sources. These reduce storage & processing costs and provide greater redundancy and horizontal scaling opportunities.

5.   Data

Data and information should be accessible in a central repository, with enough redundancies in place to stave off potential system failure. Many organisations store disparate information in multiple different places, resulting in missed opportunities for data reuse.

Organisations that use insight-driven approaches to decision-making rely on comprehensive research or data gathering; solutions derived from this systematic approach are stored in different parts of an organisation.

Efficiency is lost when another department seeks to answer a similar question and performs redundant research.  A thriving IDO saves valuable time and money by ensuring that data and scenarios are readily available for use and stored in a central location by stakeholders who need them.

Data integrity and user-friendly access are inherent to an IDO.  Data and information dashboards, for example, are a common feature of sophisticated IDO operations. Dashboards enable stakeholders to live monitor trends with data visualisations.

Source: Deloitte Consulting

Examples of successful IDO implementations

A few examples of companies who have successfully adopted an IDO approach:

1.    Carbonated Soft drinks – Using analytics to move to more consumer-centric strategy

This firm needed to turn vast amounts of data into insights to improve brand marketing (marketing mix), optimise delivery routes and balance over- and under-performance of sales.

2.    Low-cost Airline – Sharpening a competitive advantage

The low cost airline market has matured rapidly, and new strategies are essential to survive and thrive. This company faces many challenges including a lack of data governance structures and processes, no clear ownership of data, and very limited analytical capability. Defining the right scope of services and capabilities such as  price/seat optimisation and focusing on quick wins have help to rapidly deliver a war chest of over GBP 70 Million of incremental revenue. Finally, the move to become an ‘Insight Driven Organisation’ was endorsed fully and repeatedly by the CEO and exec team, placing it firmly at the heart of the new culture.

3.    Consumer Goods Manufacturer - Enterprise-wide capability development

The catalyst for change was the desire to accelerate profitable growth of the organisation and addressing current business challenges and inefficiencies. This European based global operator has been on the analytics journey for the past three years. Delivery has included financial self-service and reporting, revenue management, workforce analytics, and demand shaping capabilities.

Where to start?

Way too often, Organisations don’t know where to start. In that case, let's brainstorm! Participants of a brainstorming session have different knowledge and different experiences that will result in a high amount of ideas and suggestions generated. Because the ideas are not criticized or rejected during the session, interesting proposals can be refined gradually. The costs for a brainstorming session is very low in view of the expected outcome.

These sessions are good to establish the vision & strategy of the organisation and understand what you are trying to collectively achieve: how is the future looking? How is the Target Operating Model looks like? How far do we want to go? What are we aiming for?

There is a series of questions you can start asking your participants: what values can advance analytics bring to us? How to prioritise initiatives appropriately? Do we have the talents to conduct these initiatives? We can regroup all these questions in a few themes:

Insights Hub: what are the best in-class realisations in our industry? What competitive advantage it would bring to our organisation? What a centralised portal with data-driven insights can deliver to our business?

Visioning: what’s our value proposition? Can we align analytics services on our corporate objectives? What value can we generate?

Capabilities: what are our current capabilities? Where our capabilities are located? What is our current operating model and where are the gaps?

Prioritisation: which initiative should we prioritise first? Which governance model should we adopt? Do we have constraints or pain-points in achieving our IDO? Can we define a roadmap with tactical actions to be taken within the next 6-weeks?

Data exploration:what are our current internal & external data sources? Is it worth subscribing to an industry focused third party data source? Do we have an easy access to our data? Is our data setup compliant with all market’s regulations? What is the current state of our data governance framework?

Wrapping up

Adopting an IDO approach is more than collecting data, purchasing technology and hiring brilliant data scientists. When organization takes such narrow focus approach the results are often disappointing. Beyond data and technology, organisations must also incorporate their strategy, people and processes.

Moving toward an insight-driven culture is adopting a new mind-set. Although this is not something that can be build overnight, organisations can start with initiatives like a data governance (or data assessment) program as well as starting 6 to 8 weeks pilots to help shape the IDO journey (pilots have advantages over Proof of Concept: their reusability – pilots will chart the first milestones on an organisation’s IDO journey). To put organisations on the right track, Deloitte Consulting is offering half-day or full-day brainstorming sessions called “IDO Labs” to cover subjects like future state visioning, current state capability assessment, prioritisation criteria, scenario planning, action plan, etc., starring lessons they have learned from previous engagements.

According to McKinsey Global Institute, organisations adopting an IDO approach with a proactive strategy have a self-reported profit margin of 10 to 15 percentage points higher than non-adopters. In this information age, an organisation that implements IDO principles and practices is more likely to be a competitive one.

Becoming an IDO organisation is the path to AI. Next articles will explore AI use cases in various industries, starting with the Telecom sector. Stay tuned!

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