CIO’s Have The Data, But Where’s The Analytics?

by drjim on August 29, 2012

Image Credit Lots of numbers, but where are the answers?

Lots of numbers, but where are the answers?

If there is one word in the IT Sector that is hot, hot, hot these days it’s analytics. It seems as though it has almost become a part of the definition of information technology. Everyone and their mother’s uncle seems to be saying that analytics is the next great thing that is going to transform the company. Great, if you are the CIO it looks like you had better come up with a plan to transform your company’s numbers into something that they can use to make more money…

Who Do You Need To Implement Your Analytics Plan?

In all of the excitement that may be running through your company after the CEO reads that article about how analytics can transform the firm, something may be overlooked. It turns out that it’s going to take a very special type of IT employee to implement any successful analytics program.

It can be too easy to focus on what the end users see when they are using an analytics solution. Things like data analysis, reporting, and data management. It turns out that a lot more is needed. This includes having the IT workers have a deep understanding of the business processes that are being reported on. Remember that saying “garbage in, garbage out”?

What kind of people is a CIO going to have to add to his or her team? It turns out that you’re going to be looking for someone who has several years of business experience. They can come from either the business or the IT side of the house. In a perfect world, you’d like them to have experience with already having creating analytics solutions.

What Should The Goal Of Your Company’s Analytics Plan Be?

Once you have the right team in place, the next question is going to be what to do next. The first thing that you need to realize as a CIO is that these types of solutions don’t just show up. Instead, you’re going to have to play an involved role and actively participate in the process.

What you are going to want to be doing is working with the rest of the business to understand what they’d like to accomplish. Specifically, what should happen is that the IT department needs to design a solution that will allow the company to move to the “next level” in business performance.

Don’t get fooled by the pretty reports. A good analytics program has to deliver a lot more. If you do this correctly, then you will have found a way to maximize how important data is used throughout the firm.

What Does All Of This Mean For You?

CIOs have to be very careful when the rest of the company gets excited about a new concept that requires IT department involvement. Yes, analytics are an important part of how companies can be successful in the future, but to implement them requires careful thought on the part of the CIO. If done correctly, the company will have a better understanding of the importance of information technology to the company’s success.

One of the most overlooked points when a company falls in love with what they think that analytics can do for them is the simple fact that not everybody can implement an analytics solution. The IT department is going to have to make some good decisions when they hire for this function.

Once the CIO has staffed the IT team, the company had better be very clear about what they are looking for with this new capability. If not, then everyone is going to end being disappointed.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: How many IT staff do you think that a CIO should dedicate to implementing a new analytics project?

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What We’ll Be Talking About Next Time

The good folks over at Gartner and the Financial Executives Research Foundation have just completed another one of those big studies. What they found is that in companies that have less than $50M in revenue, 47% of their CIOs report to the company’s CFO. In firms that have $1B or more in revenue, 46% of CIOs report to the CFO. Looks like the IT department had better spend some time finding out what the CFO wants from the CIO

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{ 3 comments… read them below or add one }

Bill Cabiro September 1, 2012 at 1:41 pm

Jim, great article. Deploying Business Analytics software is not too hard and is usually done to support Accounting, Finance and Operations.

Exploiting Analytics to increase market share, revenue and profit is a completely different story and, as you well said, requires not only IT but actual business expertise.

I’ve written several articles about the strategic use of Business Intelligence & Analytics to grow the business. http://blog.strat-wise.com

Regards, Bill

Reply

Dr. Jim Anderson September 6, 2012 at 8:23 pm

Bill: Thanks for the links to your articles. “…analytics-driven organizations had 33% more revenue growth, 12 times the earnings…” — wow!, why would anyone not take the time and make the effort to not only install analytics, but also figure out how best to use what they are telling you?

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Bill Cabiro September 7, 2012 at 4:53 pm

Jim, bridging the cultural gap between IT and the strategic areas of the business is not only difficult but requires top management commitment. In his excellent book Competing on Analytics, Tom Davenport describes how a selected group of companies have gained a competitive edge by using analytics to support strategy.

Up until now, Business Analytics has been the exclusive domain of large companies that were able to afford the investment. Companies like Bank of America, Progressive Insurance, Amazon, Walmart, Capital One, Netflix and Google were pioneers in this area.

Fortunately, this situation has changed. Today, there are many analytic applications, either on premise or in the cloud, that are powerful, user friendly and very cost effective; making them ideal to bring mid size and smaller companies to the forefront of the 21st century technology to become true analytic competitors; but that is only the IT part of the equation.

The other part comes from the effort to integrate external market and competitive intelligence with customer and transaction data and this can only happen when IT works closely as a team with the strategic and commercial areas. This is usually the constraint.

Regards, Bill
http://bit.ly/zo4pcX

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