Nav­i­gate with ease

The Smart Manager - - Contents - ARINDAM BAN­ER­JEE IS PRO­FES­SOR AT IN­DIAN IN­STI­TUTE OF MAN­AGE­MENT AHMED­ABAD. TANUSHRI BAN­ER­JEE AS­SO­CIATE PRO­FES­SOR, SCHOOL OF MAN­AGE­MENT AT PAN­DIT DEENDAYAL PETROLEUM UNIVER­SITY.

Are you adopt­ing an­a­lyt­ics in your or­ga­ni­za­tion? Watch out for th­ese pitfalls, say Arindam Ban­er­jee and Tanushri Ban­er­jee, au­thors of Weaving An­a­lyt­ics for Ef­fec­tive De­ci­sion Mak­ing.

Gart­ner pre­dicts that, through 2017, 60% of big data projects will fail to go be­yond pi­lot­ing and ex­per­i­men­ta­tion, and will be aban­doned. 1 For an an­a­lyt­ics project to truly de­liver value, or­ga­ni­za­tions should have a well-de­fined script in place.

In­for­ma­tion (data-driven de­ci­sion-mak­ing has been the dif­fer­en­tia­tor for many suc­cess­ful busi­nesses over decades. The need for pre­ci­sion and speci­ficity in de­ci­sion has in­flu­enced pol­icy mak­ers to adopt an­a­lyt­i­cal pro­cesses to ex­tract in­sights about mar­kets, which can be in­puts for bet­ter busi­ness de­ci­sion-mak­ing. Tra­di­tion­ally, mar­ket­ing re­search de­part­ments spear­headed the col­lec­tion and anal­y­sis of sam­pled mar­ket data and shared in­fer­ences with the de­ci­sion mak­ers.

How­ever, over time busi­ness mea­sure­ment sys­tems have im­proved sig­nif­i­cantly in cer­tain do­mains; as a re­sult some or­ga­ni­za­tions are col­lect­ing mar­ket data and other per­ti­nent data con­tin­u­ously and more ‘com­pletely’. In the process, both the scale of data­bases and their pro­cess­ing have un­der­gone sig­nif­i­cant changes and the dis­ci­pline is now known as an­a­lyt­ics.

The an­a­lyt­ics and big data ini­tia­tives are slated to con­tinue to grow at a rapid rate around the globe in the next few years. Stud­ies by man­age­ment con­sult­ing firms such as AT Kear­ney have pro­jected a 10% CAGR of the an­a­lyt­ics soft­ware in­dus­try over the next five years. With

pres­sures on busi­nesses to show growth and prof­itabil­ity and in­creas­ing com­pe­ti­tion, the role of an­a­lyt­ics and knowl­edge man­age­ment ser­vices in gen­eral is bound to grow fur­ther.

While the an­a­lyt­ics com­pe­tency in emerg­ing mar­kets such as In­dia is also pro­jected to grow at a rapid pace and there are many con­ver­sa­tions around the prob­a­ble need for it in the cor­po­rate land­scape, there are sev­eral hur­dles that may ham­per the ex­tent and rate of adop­tion of this knowl­edge-gen­er­at­ing process.

chal­lenges in an­a­lyt­ics adop­tion in In­dian or­ga­ni­za­tions

A re­cent study4 of ours across busi­ness or­ga­ni­za­tions in In­dia has re­vealed some sig­nif­i­cant ar­eas of con­cern

re­gard­ing or­ga­ni­za­tions’ abil­ity to adopt an­a­lyt­ics ef­fec­tively in the near term. Though our sam­ple was of a mod­est size (twenty ex­ec­u­tive in­ter­views across mul­ti­ple in­dus­try ver­ti­cals and case stud­ies across five or­ga­ni­za­tions), we nev­er­the­less found some per­ti­nent is­sues for prac­ti­tion­ers to re­view be­fore em­bark­ing upon the an­a­lyt­ics jour­ney. They are:

■ non avail­abil­ity of com­pre­hen­sive busi­ness data: A pre­req­ui­site for ef­fec­tive data an­a­lyt­ics ap­pli­ca­tion is the avail­abil­ity of ap­pro­pri­ate data. It may be struc­tured or semi-struc­tured (or un­struc­tured), but it is im­por­tant that cov­er­age of the avail­able data source should be ide­ally com­plete and the va­ri­ety of in­for­ma­tion avail­able is broad enough to sup­port the ma­jor de­ci­sion-mak­ing ar­eas. Many of th­ese con­di­tions are not sat­is­fied in the or­ga­ni­za­tions that we have stud­ied so far. A sec­ondary con­cern is the un­or­ga­nized state of data in many or­ga­ni­za­tions, which makes it dif­fi­cult to de­velop a sys­tem­atic in­for­ma­tion plan to con­nect to de­ci­sion mak­ing re­quire­ments.

■ in­ter­nal data in mul­ti­ple and in­com­pat­i­ble for­mats: A se­cond di­men­sion of the com­pli­ca­tion for or­ga­ni­za­tions with large-scale busi­ness data is their avail­abil­ity in var­ied for­mats. This causes sig­nif­i­cant prob­lems of con­sol­i­da­tion. For in­stance, in the bank­ing and fi­nan­cial ser­vices sec­tor in In­dia, there has been rapid de­vel­op­ment in com­put­er­i­za­tion and au­to­ma­tion of op­er­a­tions in most large pub­lic sec­tor in­sti­tu­tions, in the past decade and a half. A con­se­quence of this trend has been that re­cent bank trans­ac­tion data is avail­able in stan­dard­ized elec­tronic for­mats but, their in­te­gra­tion (or lack of it) with back data avail­able in le­gacy phys­i­cal sys­tems (read: pa­per for­mats) makes it dif­fi­cult to ap­ply most pro­cess­ing meth­ods re­li­ably.

■ tech­nol­ogy alone has lim­ited po­ten­tial to cre­ate im­pact: Off­shore op­er­a­tions based in In­dia seem to have, to a

The need for pre­ci­sion and speci­ficity in de­ci­sion has in­flu­enced pol­icy mak­ers to adopt an­a­lyt­i­cal pro­cesses to ex­tract in­sights about mar­kets, which can be in­puts for bet­ter busi­ness de­ci­sion-mak­ing.

lesser de­gree, the prob­lem of (non) avail­abil­ity of data. There is also a large tech­no­log­i­cal in­fra­struc­ture in place that churns out in­for­ma­tion from the avail­able and more or­ga­nized data­bases. A pos­si­ble spin off of the su­pe­rior tech­nol­ogy in­fra­struc­ture in off­shore an­a­lyt­ics op­er­a­tions (a sig­nif­i­cant part of the cur­rent an­a­lyt­ics com­pe­tency in In­dia) has been the no­tion that the most ef­fec­tive and rapid way to de­velop an­a­lyt­ics com­pe­tency is to in­vest in a tech­nol­ogy plat­form. Noth­ing could be far­ther from the truth. Tech­nol­ogy alone can­not sub­sti­tute for lack of data or the un­or­ga­nized state of busi­ness data.

It is best to ad­dress the is­sues re­lated to avail­abil­ity of ap­pro­pri­ate data be­fore a tech­nol­ogy plat­form can drive ef­fec­tive an­a­lyt­ics. Ad­di­tion­ally, there are a few other mo­ti­va­tional di­men­sions that have ham­pered ef­fec­tive use of an­a­lyt­ics. They are ex­plained as fol­lows:

01 de­pen­dency on heuris­tics for mak­ing de­ci­sions: Tak­ing cog­nizance of some of the con­straints listed above, many busi­nesses re­main stead­fast on their re­liance on heuris­tic busi­ness rules de­vel­oped over long pe­ri­ods of ex­pe­ri­ence. Peo­ple-driven de­ci­sions have over­rid­den at­tempts to­wards stan­dard­ized pro­ce­dures and pro­cesses. The com­mon re­frain heard in th­ese or­ga­ni­za­tions is that in­for­ma­tion, since it is not avail­able or is in­com­plete, can­not sub­sti­tute the virtues of age-old ‘gut feel’-based de­ci­sion-mak­ing.

02 mar­ket growth hides the need for pre­ci­sion in de­ci­sions: The per­ceived ‘fu­til­ity’ of de­vel­op­ing the an­a­lyt­ics prac­tice is also fu­elled by the no­tion of the ‘grow­ing mar­ket syn­drome’. Data sci­en­tists are sup­posed to ex­tract busi­ness in­sights that act as nec­es­sary in­puts for pre­cise de­ci­sion-mak­ing in a highly ma­ture and well-pen­e­trated mar­ket. They are sup­posed to pro­vide di­rec­tions and re­fine de­ci­sions to hone in on the ‘close to the per­fect’ set of de­ci­sions for an en­vi­ron­ment. How­ever, when the mar­kets are in the grow­ing phase, such ex­trac­tion of pre­cise in­sights from past trans­ac­tions is not quite rel­e­vant. Hence, what is the need for in­vest­ment in an­a­lyt­ics, they ask.

how should in­vest­ments be di­rected to­wards adopt­ing an­a­lyt­ics in In­dia?

The find­ings of our study seem coun­ter­in­tu­itive, es­pe­cially given the level of op­ti­mism that is preva­lent about an­a­lyt­ics in the in­dus­try to­day. How­ever, it is never too early to be­gin the an­a­lyt­ics jour­ney in any or­ga­ni­za­tion. Per­co­lat­ing the cul­ture of us­ing per­ti­nent mar­ket and busi­ness in­for­ma­tion, no mat­ter how in­com­plete it may be, and fac­tor­ing the in­sights into de­ci­sion-mak­ing is a worth­while step to­wards build­ing long-term ca­pa­bil­i­ties in or­ga­ni­za­tions, specif­i­cally when mar­kets will get crowded with the en­try of more sup­pli­ers and com­pet­i­tive­ness in­creases in the near fu­ture.

How then should or­ga­ni­za­tions in In­dia chart out their an­a­lyt­ics jour­ney? First, it may be pru­dent to use ex­perts to de­velop plans to build rel­e­vant busi­ness data marts in or­ga­ni­za­tions with an eye to­wards their fu­ture use. Iden­ti­fi­ca­tion of key data, which may help in the analy­ses of var­i­ous fu­ture busi­ness sce­nar­ios, their prob­a­ble

Data sci­en­tists are sup­posed to ex­tract busi­ness in­sights that act as nec­es­sary in­puts for pre­cise de­ci­sion-mak­ing in a highly ma­ture and well-pen­e­trated mar­ket.

in­ter-re­la­tion­ships and de­ci­sions re­gard­ing in­vest­ment in their metic­u­lous col­lec­tion are im­por­tant el­e­ments of this plan­ning process. This is more like work­ing back­wards from a de­sired out­come to trace out what may be the re­quired se­quence of de­vel­op­ing a com­pe­tency to achieve it.

Se­cond, ex­pe­ri­enced an­a­lyt­ics pro­fes­sion­als can also serve as use­ful men­tors to en­able or­ga­ni­za­tions to equip them­selves with the right ca­pa­bil­i­ties for the fu­ture by

■ ed­u­cat­ing de­ci­sion-mak­ers about the ap­pro­pri­ate way(s) to use in­for­ma­tion-based in­sights into de­ci­sion-mak­ing pro­cesses ■ train­ing ex­ec­u­tives in the cor­rect ways to process data to pro­duce busi­ness in­sights

It is im­por­tant to note that the qual­i­ties of the ex­pe­ri­enced an­a­lyt­ics pro­fes­sional in­clude (see fig­ure 01)

■ a req­ui­site knowl­edge of data bases and their struc­ture

■ ad­e­quate un­der­stand­ing of pro­cess­ing meth­ods and their out­put

■ a sig­nif­i­cant con­nect with the busi­ness de­ci­sion-mak­ing

process.

While this might seem like a for­mi­da­ble set of qual­i­fi­ca­tions for an in­di­vid­ual to pos­sess, what is nec­es­sary to re­al­ize is that even­tu­ally a good cross pol­li­na­tion of th­ese ca­pa­bil­i­ties across a crit­i­cal mass of em­ploy­ees is re­quired for an­a­lyt­ics to flour­ish in the or­ga­ni­za­tion. The more adept ones among them act as trans­la­tors across var­i­ous func­tions (data man­age­ment, pro­cess­ing, and de­ci­sion­mak­ing) since their ‘blended’ ca­pa­bil­i­ties pro­vide them the nec­es­sary abil­ity to con­nect with all. Fi­nally, the guid­ing prin­ci­ple to man­age adop­tion should be to chart out the an­a­lyt­ics jour­ney in de­tail from ‘start to fin­ish’ (as much as one can) be­fore com­mit­ting sig­nif­i­cant in­vest­ments in tech­nol­ogy and in­fra­struc­ture.

Fol­low­ing this prin­ci­ple, ex­pe­ri­enced an­a­lyt­ics pro­fes­sion­als can help en­sure pru­dent use of or­ga­ni­za­tional re­sources and a timely in­vest­ment in the an­a­lyt­ics process. ■ 01 https://www.gart­ner.com/news­room/id/3130017 02 http://www.forbes.com/sites/louis­colum­bus/2014/06/24/roundup-of­an­a­lyt­ics-big-data-busi­ness-in­tel­li­gence-fore­casts-and-mar­ket-es­ti­mates-2014/ (Ac­cessed on Septem­ber 4, 2015, 0925 hrs (IST)) 03 Üs­ing Mar­ket­ing An­a­lyt­ics to Drive Su­pe­rior Growth”, Mckin­sey Quar­terly, June 2014. 04 “De­ter­mi­nants of An­a­lyt­ics Process Adop­tion in Emerg­ing Economies: Per­spec­tives form the Mar­ket­ing Do­main in In­dia”, Vikalpa,42(2), April-June 2017.

Ex­pe­ri­enced an­a­lyt­ics pro­fes­sion­als can also serve as use­ful men­tors to en­able or­ga­ni­za­tions to equip them­selves with the right ca­pa­bil­i­ties for the fu­ture.

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