Why Your Analytics are Failing You

Published April 10, 2014   |   
Michael Schrage

Many organizations investing millions in big data, analytics, and hiring quants appear frustrated. They undeniably have more and even better data. Their analysts and analytics are first-rate, too. But managers still seem to be having the same kinds of business arguments and debates — except with much better data and analytics. The ultimate decisions may be more data-driven but the organizational culture still feels the same. As one CIO recently told me, “We’re doing analytics in real-time that I couldn’t even have imagined five years ago but it’s not having anywhere near the impact I’d have thought.”

What gives? After facilitating several Big Data and analytics sessions with Fortune 1000 firms and spending serious time with organizations that appear quite happy with their returns on analytic investment, a clear “data heuristic” has emerged. Companies with mediocre to moderate outcomes use big data and analytics for decision support; successful ROA—Return on Analytics—firms use them to effect and support behavior change. Better data-driven analyses aren’t simply “plugged-in” to existing processes and reviews, they’re used to invent and encourage different kinds of conversations and interactions.

“We don’t do the analytics or business intelligence stuff until management identifies the behaviors we want to change or influence,” says one financial services CIO. “Improving compliance and financial reporting is the low-hanging fruit. But that just means we’re using analytics to do what we are already doing better.”

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