Indian enterprises score above-average in the data and advanced analytics maturity score, but organizational and skill challenges remain, finds the latest EY-Forbes survey
Technology has progressed to a stage where inexpensive storage, ever-increasing computing power and advanced analytics tools can be used to analyze large chunks of continuously generated ‘big data’ to provide useful insights. The digital age, having ubiquitous connectivity of devices, is increasingly providing opportunities for innovation and operational excellence to businesses. This is making data and advanced analytics a ‘top of mind’ agenda for C-suite in order to gain significant benefits such as development of new products, expansion to new markets and better understanding of their consumers.
The 2017 EY-Forbes survey on data and advanced analytics, covering more than 1,500 global executives found that companies having a well-established analytics strategy have witnessed a revenue growth and operating margin of more than 15% and a significant improvement in their risk profile.
Some companies are even considering strategies to monetize their data and advanced analytics — for instance, 43% of the respondents are looking to collaborate with partners to enhance market position. Likewise, 43% are exploring ways to sell data to new customers. Over the next two years, over half of the respondents plan to invest at least US$10 million in data and analytics resources.
Key learnings from global enterprises
The EY-Forbes survey compares companies into categories where ‘leading’ companies have a well-established analytics strategy that is central to the overall business strategy while ‘lagging’ companies currently lack an analytics vision or strategy.
- While 48% of responses from lagging companies quoted ‘lack of senior leadership support’ as a pain point to analytics strategy, only 28% responses from leading companies had this as a concern.
- Other critical factor for business success is having governance models in place. 75% of leading companies rely on a full range of enterprise, departmental, and line-of-business data and advanced analytics groups that operate within a well-aligned framework. This is in significant contrast to the 1% of lagging companies, which claim such level of maturity.
Figure 1. What leading companies do well
It is important for business leaders to implement analytics as an enterprise-wide strategy with sponsorship from top-level and functional executives and alignment to overall business strategy. At times, organizations might need to decentralize decision-making, thus letting line managers use resources as per requirements. However, on the whole, an organization’s analytics strategy should not be an ad-hoc endeavor which varies from department to department.
Assessing the maturity level and concerns in the Indian scenario
The EY-Forbes survey shows that emerging markets in Asia and Latin America have been strong in analytics capabilities. India scored above average in the analytics maturity score and ranked among the leaders in data and advanced analytics. The survey also shows that Indian enterprises are ahead of overall global peers on certain parameters.
Figure 2. India fairing higher than global peers on select parameters
Though analytics offers a lucrative platform for growth, its adoption comes with its own set of challenges. The EY-Forbes survey found that the fundamental problems arise at the crucial points between the steps organizations take as they move from identifying new business opportunities, acting on insights and measuring the outcomes of their data-driven strategies. For instance, a common pain point is lack of collaboration among business units and analytics specialists at the time of defining desired outcomes, designing operational models and measuring the results.
Figure 3. Key pain points highlighted by Indian enterprises
Essentials for succeeding in the data and advanced analytics arena
To succeed in data and analytics strategy, Indian organizations need to have a thorough assessment of the processes used during the formulation of data-driven strategies, an honest review of analytics capability maturity and a plan for closing any gaps.
- Make it a strategic imperative: The analytics vision needs to be embedded as part of the overall organization’s strategy, with backing from the leadership. For this, varied approaches are possible, such as setting up of separate Centre of Excellences, specific alignments with business units or a distinct centralized unit. The structure may gradually evolve as per business needs.
- Strengthen using a governance model: Trust in data accuracy and security can be developed by setting up an Analytics Governance Council and defining enterprise-wide data governance standards. The council typically should comprise of business heads, IT and analytics leaders.
- Identify what value analytics will create and review periodically: There should be clarity in the role analytics can play in value creation for the organization. Development of formal key performance indicators and period assessments of these will ensure that the efforts are focused in the right direction and deliver tangible results.
- Train your talent: Appropriate skill sets are required to gather and analyze data, and create analytics-based business insights. Hence, there is a need to organize training for the business teams to help them be better consumers of analytics. For this, organizations can collaborate with strategic analytics partners to build analytics capability.