Small Steps to Analytics Maturity!
Recently a client asked me an interesting question: How would you start analytics in an organization?
This also seems to depend on the industry. While Banking has greater maturity in the use of Analytics, FMCG companies may have different challenges given the lack of end customer data. Also it takes time to build analytical maturity in a company. And it takes a certain unique mix of people- a combination of left & right brain talent!
The question was interesting from many perspectives:
- What exactly is analytics and does the name describe the function?
- How should one go about starting doing the work that analysts are supposed to do?
- Where should the Analytics team report-is it part of a marketing team or somewhere else?
- What kind of issues should analytics try and solve?
- How much money needs to be invested to really make Analytics work?
My experience across both Retail & Retail banking has been that it is best to start small, very small! A lot of analytics can be done on an excel sheet and does not require a PhD in statistics to do. The simpler the analysis the “lesser” is the barrier in implementing the call for action that emanates from it. So my first suggestion to anyone starting out this kind of work is to follow the well know “KISS principle”(Keep it simple stupid). The most important next step from here is to choose the business area where you want to make an impact.
I would go for the counter intuitive bit here and try to make your analysis work for a business unit that is not doing so well. Businesses doing very well, have a lot of competing ideas clamouring for a share of the credit. It’s in the businesses that need help, that you will find maximum support. And finally I would say that choose business themes that are close to the CFO’s heart! The CFO’s support for analytics is probably the most critical part of what you would do-this forms the building blocks on which you can scale up your efforts in the years to come!
I have often come across situations where organization seem to believe that investing in top end statistical resources and buying high end technology is enough to extract value from analytics. The truth is vastly different and I strongly believe that embedding simple ideas and focussing far more on execution is critical for an organization to succeed in analytics based strategy.