Many CEOs and senior executives hesitate to commit to data analysis investments due to concerns over the costs, time, and resources required to launch these efforts.
That’s according to a recent panel discussion among insurance industry executives on the topic.
While some executives are reluctant to invest in data analysis efforts because of a perceived lack of clear return on investment, there are several different ways that analytics champions can make convincing arguments for the business case behind analytics.
For starters, it should be clear to every senior executive who has excelled in her respective industry and reached the top of the leadership food chain that we are in the midst of the Information Age, which started with the advent of the personal computer in the late 1970s.
As we’ve transitioned from an industrial economy to a services-led economy, data is the fuel that’s powering everything from new product development to approaches to transportation and logistics to customer service. Meanwhile, high-speed networks and communications have spread around the world, providing greater access to information and markets, stoking global competition.
Companies across all industries are working faster and smarter to retain an edge and stay ahead of their rivals. Indeed, some of the most successful companies on the planet are nearly completely digital in nature, e.g., Google and Facebook. At the core of all of this is data.
The demands for executives to keep pace with heightened competitive pressures is increasingly driving senior business leaders to have access to real-time, actionable customer and market information to make informed, multi-layered decisions quickly.
This includes drawing upon the use of big data – or sets of structured and unstructured data – that are streaming into companies through ERP and CRM systems, social media, transactional data, and other sources.
A recent study published by Hypatia Research reveals that nearly one-third of the 800 respondents have embarked on big data analytics efforts over the past five years while another 15% of the respondents are just getting started with plans to expand.
One way of positioning this to senior management is to explain that companies that haven’t started down the data analysis path have likely fallen behind their rivals and hungry start-ups that are currently gaining insights into customer and market trends.
CEOs, CFOs, and other senior executives are often unwilling to make big investments in technologies or disciplines if they’re not yet convinced about the business case.
The key is to gain the support of a single, influential senior executive or organizational leader who sees the value of predictive analytics and is willing to champion the use of data analysis tools and techniques. Doing that can go a long way toward obtaining buy-in from other leaders from across the organization.
Another step analytics proponents can take to strengthen the business case for data analysis is to start with a small pilot project in an area of the business where they can demonstrate the potential for business process improvement.
Many enterprise IT departments have “skunkworks” research and development teams that have small budgets to test out new technologies. A pilot project could either be sponsored or co-sponsored by the IT organization along with the business unit that will reap the benefits of data analysis.