Data matters. It always has.
Take if from Sir Conan Doyle’s famous fictional detective, Sherlock Holmes, who once said, “Data! Data! Data! I can’t make bricks without clay.”
Today, CIOs are partnering with their businesses, just like Holmes and Watson, they try to solve the mysteries of data—using analytics—and achieve better business outcomes. They are using analytics to change the way their organizations build brands, manufacture products, and interact and manage their relationships with customers. They are using analytics to enhance innovation, achieve higher productivity, lower the cost of operations and ensure faster growth.
For technology providers that means big business. According to Gartner, in 2013, the worldwide business intelligence and business analytics market closed out at $14.4 billion, an 8 percent increase from 2012. Gartner predicts that business intelligence and analytics will remain top focus for CIOs until 2017. In India, the stakes are high when it comes to analytics. Indian CIOs say analytics is one of the top three most important technology trends—along with cloud computing and mobility—and will have a profound effect on their roles in the near future.
Going by the numbers from the State of the CIO 2014 (CIO magazine’s annual benchmark survey), a full 41 percent of Indian IT leaders have made significant investments in business intelligence and analytics, a clear 15 percent increase from 2013.
There are a number of leading-edge business intelligence technologies such as predictive and in-memory analytics, as well as data visualization, available in the market to help CIOs and their businesses make sense of the large volumes of data within their organizations. But technology is only part of the challenge. Here are the three things CIOs have to nail down if they want to help their organizations find success deploying analytics.
The Ownership Clause
In the past, business intelligence initiatives were led by IT and were really little more than MIS reports. That’s likely to change. Gartner predicts that going forward, companies will shift their investments away from IT-developed reporting solutions toward business-user-led analysis solutions.
That’s going to mean more business involvement, which, according to CIOs, is a good thing.
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“For any IT project to be successful, ownership has to be with the business sponsor and in case of business analytics, marketing is a key user and sponsor, and hence the rightful owner,” says Rajeev Batra, CIO, MTS.
Batra should know. Two years ago, MTS India, the mobile telecom service brand of SSTL, launched a platform called MBonus, which is driven heavily by analytics. MBonus is the framework for marketing campaigns. It’s what allows MTS to micro-target its customers with offers (like free talk time) based on a mix of data, some of which is real-time. MTS India’s IT team created a multi-dimensional customer grid based on multiple factors including a customer’s profile, their location, and usage patterns.
MBonus helps create targeted marketing campaigns that offer MTS customers additional benefits such as free talk-time, discounted calls, and SMS schemes, based on their usage, location, and other parameters. The efficiency and success ratio of these marketing campaigns were closely monitored by the business.
“The analytics platform has empowered business teams to create campaigns with minimal or no IT intervention, ensuring significantly lower turnaround time and market differentiation,” says Batra. Today, the MBonus platform renders approximately 600 voice and data marketing campaigns a day.
MBonus utilizes strands of analytics from a massively parallel columnar analytical database so that MTS could target promotions to customers in near real-time—while they were conversing on phone or performing data transactions. The parallel processing of 200GB of online data, in few minutes, gave meaningful output and suggested targeted campaigns for marketing teams.
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“Analytics has helped us increase our customer conversion rate from the industry standard of 3 percent to approximately 6.5 percent, while enabling opex savings of about 20 percent,” says Batra.
Batra isn’t the only CIO who believes that analytics projects shouldn’t be owned by IT. “Technology should be the custodian of an analytics project, and not the owner,” says Hitesh Arora, CIO, Yum! Brands, which owns brands such as Taco Bell, Pizza Hut, and KFC.
Business complexity, Arora believes, plays an important role in deciding who owns a project. He feels that business should define key parameters of an analytics platform and IT can ease complexity by choosing the best possible way to deliver it. In the past, Arora created a team constituting business and IT teams to deploy a BI project which was sponsored by the CEO of the organization and owned by the business.
Overcoming the Skill Crunch
Once it’s clear whether IT or the business owns an analytics project, the next step is to select the right mix of people to drive such an initiative. Today, one of the largest skill gaps that exist within organizations is the shortage of people who possess the ability to combine analytical skills with business knowledge.
Batra feels that this skill shortage is prevalent in both IT and business teams. “Skills around business analytics are scarce and much sought after and hence, at MTS, we have employed several long-term incentive plans to retain analytical talent,” he says. Although it still remains a challenge, it’s an important issue to address since the value of personnel grows multi-fold as they gain key analytics skills through hands-on experience or organizational-imparted training.
Ramandeep Singh Virdi, VP Group IT at InterGlobe Enterprises, feels that organizations must create very clear strategies to hire skilled people who possess the perfect blend of business acumen and analytics skills. “This team must understand that the ultimate goal is to build an analytics tool for the business so that they can make quick decisions in real-time, and they must deliver on that,” he says.
It’s tough to hire data scientists directly from the market or train IT in analytics. Veer found a middle path to overcome this dilemma. The company identified a few business leaders from finance and sales who were IT-savvy, and were also comfortable with key business processes. “We got a huge advantage by putting these business-function executives in analytics and they were able to bring in the financial expertise that we needed,” he says.
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According to CIO India research, 34 percent Indian organizations believe that analytical skills are too expensive to hire.
Deepak Solanki, VP-information systems, South East Asia, Reckitt Benckiser, feels that instead of hiring people from outside, a long-term goal of organizations must be to set up their own competency centers that will churn out analytical insights. “It’s not the technical skills required to build an analytics platform that’s needed, but it’s the people who can make sense out of data and use it to make good decisions. It’s that competency that’s missing,” says Solanki.
Ease of Use
The success of an analytics project depends largely on user acceptance. You might find the perfect technology, and the right skill sets, but it all comes to naught if end users refuse to adopt a tool you create.
Data from CIO India research illustrates this point. According to our data, 74 percent of organizations in India still share insights using spreadsheets-based reports. Part of the reason that’s true is because staffers are fairly comfortable
This is something CIOs on the path to creating business intelligence and analytics tools need to watch out for. Staffers steeped in their ways, and who have used Excel for years, are unlikely to take kindly to new tools.
“The transition from spreadsheet style reporting to using dashboards is a huge change management process. Hence, it’s important for CIOs to get support from CEOs or CFOs to influence the business users,” says Anil Veer, VP-IT, Aricent Group.
CIO India research indicates that 36 percent of Indian organizations have started using dashboards to represent data in real-time. The BYOD trend has also influenced business intelligence reporting and about 9 percent of organizations are experimenting with leveraging BI dashboards for mobile users in their organizations.
“The success of an analytics project depends largely on the ease with which real-time data can be represented in the simplest possible way so that end users can make quick business decisions and maximize operational efficiency,” says Virdi who delivered 300 operating dashboards for different departments at Indigo—in a span of just nine months.
The Future is Now
Analytics has come a long way. From the time when terms such as big data were largely unknown to IT or the business, to a place where organizations and their CIOs have been able to hit a level of maturity. According to CIO India research, about 43 percent of Indian CIOs are interested in tackling big data in the course of 2014—compared to 5 percent in 2013. This is a colossal shift and clearly indicates that the uncertainty around big data is slowly diminishing. As big data matures in the coming years, analytics will become more and more mainstream and will help businesses make more real-time, data-driven decisions.
Virdi feels that the time is right for organizations to use analytics-based outcomes to deliver ROI for business. “The use of business intelligence and analytics to improve operational efficiency and productivity in an organization will ultimately help deliver customer satisfaction,”
In other cases, analytical projects will also help businesses reach out to the right customers and forecast business gains more accurately. “Analytics can be used to build the right products for customers, predict and collect their responses, and anticipate realistic business outcomes,” says Yum! Brands’ Arora.
Organizations must keep in mind that it’s easy to get caught up collecting and storing new data, integrating different data sets or building new reports and dashboards for end-users. But, in the end, analytics must be a means to an end. Companies must be able to derive actionable insights for business and act upon them to deliver ROI.
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