A new report has revealed a diverse landscape when it comes to how large businesses, including retailers, tackle problem solving and analytics - with the right approach proving an essential part to driving results and meeting stakeholders’ expectations.
The ‘State of Analytics and Decision Sciences’ report by Mu Sigma, provider of decision science and big data analytics solutions, shows that while the majority of senior decision makers (65 per cent) recognise the positive impact analytics can have on business growth, many are failing to manage and harness it effectively.
Part of that polarity is down to ownership. When asked who has overall responsibility for analytics within their organisation, 23 per cent said it is their chief information officer (CIO), while nearly a fifth said responsibility lay with the head of finance, the CFO (17 per cent).
The number of enterprises where ‘specialists’ are in charge of the function appears to still be in the minority, with only four per cent saying they have a chief data scientist looking after it, nine per cent a chief data officer and 13 per cent a chief analytics officer.
The report also highlights a diverse range of governance models among the 150 organisations that took part.
Most use a centralised model (44 per cent), where a central group provides analytics services to the rest of the company, while 22 per cent said they use a decentralised model, where individual business units are responsible, and 16 per cent adopt a federated one, a well-coordinated blend of the two.
When it comes to how companies approach analytical problem solving, surprisingly few companies said they begin with a business outcome in mind (26 per cent); most (74 per cent) said “we start with the data we know we have access to and go from there”.
On average, the bulk (39 per cent) of analytics work still centres on the descriptive – reporting on what’s happening in the business ‘here and now’ – as opposed to predictive analytics at 21 per cent.
“The report shows that many businesses are misguidedly prioritising data and technology over better decisions,” said Tom Pohlmann, head of values and strategy at Mu Sigma.
“Many are forced to spend the bulk of their effort organising and reporting on what is happening in their business, and not enough time looking at the why and what’s next part of their story, which will better prepare them for the opportunities and challenges on the road ahead.”
A key ingredient to problem solving and analytics success lies in taking a more creative and experimental approach.
Among the most successful companies, 60 per cent practice a ‘fail fast and fail cheaply’ mentality to help them identify the right mix to their analytics to achieve a competitive edge.
And, nearly 67 per cent of companies that exceeded investor expectations said they look outside their industry for learnings and practices to make improvements to their business.
“Changes in customer behaviours are leading to a scramble for new capabilities and offerings – which in turn fuels the need for analytics and insights,” added Pohlmann.
“While many enterprises are taking the right approach to meeting those challenges, many are still not paying enough attention to creative problem solving and consequently falling short in analytics.
“Organisations needs to understand the importance of decisions in order to gain truly valuable insights from their data – and sometimes you need to ‘think outside the box’ to get there.”
Looking forward, the overwhelming majority of participants (70 per cent) acknowledged that, to varying degrees, they plan to make improvements to their approach and have a clearer roadmap of analytical business problems they want to address in the coming year.
Those who are planning to do so can take heart from statistics in the report, which show a connection between business performance and analytical rigor.
Companies who have met or exceeded stakeholders’ expectations are nearly four times more likely to use a consistent methodology for analytical problem.
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