Doubts Mount About Data Payoffs
Mounting evidence contained in vendor surveys suggests executives who play a key role in data and analytics technology investments are increasingly dissatisfied with the results of current approaches to analytics and the ultimate goal of problem solving.
The latest example comes in a report released this week by “decision science” and analytics vendor Mu Sigma, which concludes that businesses are putting the cart before the horse by prioritizing data and analytics technology over sound decision making.
Echoing earlier research, Mu Sigma reported that more than one-third of the companies it surveyed said data quality and consistency were the biggest challenges faced in their analytics initiatives. Similarly, a CEO survey also released this week found a growing lack of confidence in data quality.
While most executives were generally optimistic about the impact of analytics on their businesses, the Mu Sigma report noted skepticism among those early adopters who said they are underperforming against investors’ expectations. The report attributes that skepticism to companies “going about analytics in the wrong way.”
“Because businesses aren’t paying enough attention to creative problem solving, they are falling short in analytics,” argued Tom Pohlmann, head of strategy at Mu Sigma.
Along with data quality challenges, the report also emphasized that underperforming companies are twice as likely to identify data skills deficiencies as a major analytics challenge. Meanwhile, integrating analytics into a company hierarchy also creates problems is terms of who “owns” analytics. Responsibility tends to be spread among chief analytics, data, financial, information and even chief marketing officers.
Twenty-three percent said CIOs oversee data and analytics while 13 percent have created a new “chief analytics officer” position.
In terms of methodology, more than three-quarters of respondents said they either “lead with” or limit themselves to available data when attempting to solve a business problem. Twenty-six percent said they initially focus on the “desired outcome.”
Those results underscore the need for new approaches to problem solving, the report argued. “Organizations don’t approach analytics with the same rigor that they do other, more mature disciplines,” Mu Sigma asserted in releasing the report results. “Many do not follow a consistent methodology for problem-solving, focusing instead on plugging holes in their data and workforce.”
Among the remedies cited by respondents was the need for greater collaboration when using analytics tools. That approach would help overcome organizational shortfalls such as the lack of consistent methodologies for leveraging data analytics to solve business problems. Thirty-nine percent of those executives polled acknowledged they could do a better job of developing an analytics framework while 24 percent said a clear analytical roadmap was a priority in the coming year.
The online survey of 150 U.S. executives was conducted during the first half of 2016. Most exercise “heavy influence” over data and analytics investment decisions, the vendor said.