Companies are investing heavily in data warehouses and data analytics software. But many of them don’t have much to show for their efforts and sometimes customer service is actually worse.
What’s the problem? To begin with, big data has been hyped so heavily that companies are expecting it to deliver more value than they are actually able.
The primary reason that investments in big data fail to pay off, though, is that most companies don’t do a good job with the information they already have. They don’t know how to manage it, analyse it in ways that enhance their understanding, and then make changes in response to new insights. Companies don’t magically develop those competencies just because they’ve invested in high-end analytics tools. They first need to learn how to use the data already embedded in their core operating systems, in much the same way people must master arithmetic before they tackle algebra. Until a company learns how to use data and analysis to support its operations, it will not be in a position to benefit from big data.
The digital economy is all about capturing, analysing, and using information to serve customers. Most companies can significantly improve their business performance simply by focusing on how operating data can inform day-to-day decision making. So why don’t more companies make better use of data and analysis? One reason may be that their management practices haven’t caught up with their technology platforms. Companies that installed digital platforms — ERP and CRM systems, real-time data warehouses, and home-grown core information systems — over the past 10 to 15 years have not yet cashed in on the information those platforms make available. In addition, adopting evidence-based decision making is a difficult cultural shift: work processes must be redefined, data must be cleansed, and business rules must be established to guide people in their work. The good news is that once companies have made the cultural change, they usually don’t go back, and their operating improvements are not easily replicated by competitors.
Research suggests that companies with a culture of evidence-based decision making ensure that all decision makers have performance data at their fingertips every day. They also follow four practices: they establish one undisputed source of performance data; they give decision makers at all levels near-real-time feedback; they consciously articulate their business rules and regularly update them in response to facts; and they provide high-quality coaching to employees who make decisions on a regular basis.
Our own research indicates ‘little data’, readily and relatively cheaply available, often doesn’t figure at all with an organisations management team. Knowing how to access and use this data can transform performance.
*This article uses references from the following sources : –
- MIT Sloan School of Management
- University of Texas at Austin
- Interactive Business Dynamics Limited