Chris Mazzei, Global Chief Analytics Officer, EY, on the upcoming analytics trends that will reframe digital in 2016
Over the past months, we talked to various top level executives to learn more about the challenges, opportunities, and behavioral and social impacts of running a business in the digital world. These conversations uncovered some interesting analytics trends – going well beyond the “usual suspects” related to the volume, speed and variety of data. And we believe these are the trends that will capture the attention of businesses and their leaders over the next year.
Bartering incentives for data
It’s no secret that in our digital world, companies leverage information collected from consumers who use electronic and data-driven services to strategize and deliver personalized services. But consumer behavior regarding the use of their personal data is changing. Based on our experience, consumers are becoming less willing to share their personal information. And these days, laws are being passed in favor of consumers’ control over their personal data.
To counteract this development, companies are piloting, or considering giving, discounts or incentives to consumers who are willing to share – and give permission to use – their information. As a result, we are on the cusp of a new state of sophistication in how companies deliver value to consumers based on various data sharing and permission frameworks. As the year unfolds, we’ll see this discussion accelerate.
The rise of the analytics leaders
Businesses agree that analytics is a key source of competitive differentiation. But analytics programs run by many companies have failed to deliver on ROI. According to a report developed by Forbes Insights, in cooperation with EY, 2015 EY/Forbes Insights Data & Analytics Impact Index: Don’t Forget the Human Element:
- Seventy-eight percent of organizations agree that big data and analytics are changing the nature of competitive advantage.
- Sixty-six percent are investing $US5 million or more in analytics.
- Only 12% describe their analytics maturity as leading.
What firms need is a business strategy that has analytics at the core, rather than just an analytics strategy that makes marginal improvements to existing operations. To move with this plan, organizations will have to find analytics leaders who can envision and design future-state business models, and who have the ability to influence others and get different parts of the organization to work together. Certainly, analytics leaders must possess the right set of technical skills, but it’s equally important that they can build networks and relationships across the business to create change and generate value. We’re going to see more of these leaders rise up, as organizations begin to realize that managing the analytics function and establishing a basis for cooperation is vital to analytics success.
The human element of analytics
Businesses are beginning to realize that the human element of analytics is as important as the technology and data elements. EY has covered this topic in detail (please see past blogpost). Many companies have increased their capacity to ‘”produce” analytics-driven insights – such as customer preferences, operational improvements and risk identification. However, they are still not seeing return on investment from their analytics investments. Why? Because return on investment can be realized only when people make different decisions and change business processes. A company’s culture, organizational processes, skills of the business users and incentives must be considered, and are all part of the equation to “consume” analytics throughout the organization. Despite massive spending on technology and tools, not enough focus has been put on the “consumers.” In the EY and Forbes Insight study mentioned earlier, 89% of organizations said that change management is a barrier to realizing analytics value. In 2016, we will see many organizations shift the emphasis from analytics “production” to analytics “consumption.”
When analytics forms the core of a business, big changes can take place. It’s safe to say that, in 2016, companies that successfully embed analytics into their enterprise-wide business strategy could be among the leaders in the digital arena. For CIOs, in particular, this means not only figuring out how to embed analytics in multiple verticals across the enterprise, but also building a network of influencers who can make that a reality.