Sunday, July 17, 2011

How to build an Analytical culture?

Today, many organizations in India are facing challenges to build and sustain an analytical culture within the organization. They face the following challenges 
  1. Lack of top management buy in
  2. Data Quality issues
  3. Lack of right set of people to implement analytics initiatives
  4. Analytics initiatives are being implemented with "Project" mentality
  5. Lack of awareness within business groups 
Many top executives in India think that they are not yet ready for Analytics from data maturity and investment point of view. One issue in gaining the acceptance by executives is the notion that the Analytics intiatives take long time to implement as it requires data warehouse to be built. Many organizations in India are not successful in building a data warehouse. To gain acceptance within executive community, you need to decouple analytics initiatives from data warehouse initiative. You need to tie analytics with strategic issues and identify areas wherein you can show "quick" wins. In order to show quick wins, you need not to pick your entire universe of customers. You can select small segment of your entire customer base or a region for analysis where
  • Data maturity level is high 
  • There is facts driven decisioning culture in place
  • Business impact of analytical results is very high
One of the banks in India, chose HNI(High Networth Individuals) segment for analytics pilot. They managed to show big business impact of using analytics in this small segment of customers and got buy in from their management for investment in analytics initiatives. 

Many organizations in India believe that they need to have perfect data in order to implement analytics. Let me tell you that data will never be perfect. So start right away with what can be done now with the data you have & get top management buy in.Once you have buy in from top management & you demonstrate the value of analytics, companies will invest more in resources and infrastructure to address data issues, paving the way for enterprise analytics deployments.

I always wonder when people tell me that they do not find right people in market for analytics. India has got the largest pool of math and stat people in the world. There are enough number of people available in the market. You need to find them and train them on relavent tools and technologies. If you do not want to invest initially then hire a partner organization to do initial pilot to secure buy in from management. Once management is convinced then start hiring people from the market. I strongly believe that organization can sustain analytical culture only when they build capability internally.

There are many early adoptors of analytics initiative in India.Today, they are finding it difficult to sustain analytical culture in the organization. They started of with implementing analytics with the "Project" mentality. They started with fixed scope and timelines. Once the project got implemented, project team got dismantled. This is a recipe for failure eventhough you have started on this journey before your competition.You need to treat Analytics as ongoing program and keep on enhancing & updating analytical models as your business changes to derive value out of your investments. This requires setting up of business analytics CoE. I shall discuss in my future blog about what it takes to build business analytics CoE.

Lastly, it is very important to create awareness about analytics within business community.You have to be able to clearly communicate the value proposition of analytics and what it means to the business. You have to be able to sell ideas.

You will be failed to build analytical culture if any of the above things go wrong. Organizations which were successful to build analytical culture stop looking at analytics as a tool or a product, but as a component of the business process.