In an earlier blog, I wrote about how each organization is on a journey of its own design. But there are lots of common elements that make up every journey. And the first step regardless of industry or business line should be to Identify high-value opportunities to exploit analytics on all types of structured, unstructured, and real-time data.
Setting the Stage
An ideal place to start incorporating data and analytics is in key areas of the business with the greatest potential for positive impact—a high-value opportunity. This approach is designed for quick impact, even if many of the systems, components, and data sources are new, possibly immature, or require investigation and practice to deliver the best outcomes. What should you do?
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Articulate your strategy to gain agreement within your organization as to the vision for analytics and data. Getting an agreement upfront helps accelerate activities later. Consider appointing someone (a chief data officer, an analytics czar, etc.) to guide your efforts if that role doesn't already exist. And don't be shy about drafting the best person, not just the person who's available. With all the change we're experiencing now, someone with a good head on their shoulders and the ability to drive consensus quickly should be at the top of your list.
They're everywhere and anywhere. Talk with business leaders. They can rip off a list faster than you think. Let's review some imperatives that give you some great ways to frame the discussion between business leaders, data scientists, analysts, and IT.
Improve customer retention by 10%. Create highly targeted marketing campaigns in consumer products to target specific individuals or groups to improve outcomes of marketing and strengthen customer relationships.
Detect and investigate fraud in financial services before it engulfs you. Fraud, financial crimes and security breaches are among the costliest challenges for the finance industry. And it's not just in finance. Think of this as a data and analytics-driven insurance policy that can yield tremendous returns.
Align supply chains to the new market reality to improve responsiveness. Forecasting real-time demand in the supply chain lets you accurately project demand changes dynamically and closely monitor inventory levels that significantly increase profitability, especially when supply chains are turned upside down.
Improve transportation and delivery when everyone is now ordering online. Developing innovative uses for new data in transportation by including content such as weather data, crime reports, and ever-changing economic forecasts can be used in enrich predictive models and factor into route-planning and transportation methods, improving efficiency and safety.
These are just examples, but ones that let you think bigger than just "build some new analysis for the CXO". Overall, encourage curiosity, exploration, and culture change. This is the ideal stage for studying the potential benefits, learning, and experimenting to understand the possibilities. This also helps to infuse "analytic thinking" everywhere and can fundamentally change the way the business operates.
Prioritize the Best Path(s) To Take
Once you are in the midst of this identification process, you'll be surprised how many competing priorities there are. You'll need to weigh initiatives against each other. Why? It's highly unlikely you'll be able to fund and staff all of them.
Once you've created the list, the best thing to do is to put them through a prioritization scheme.
Often, decisions are driven by cost—the lower the cost, the easier to approve it. But the impact should be a key input as well. For example, you could spend $100,000 on Project #1, but its impact might yield $500,000 in savings—a 5X return – within a year. Not bad. Another program may cost $1 million but generate revenue of $8 million—an 8X return—within 9 months. While both are simple examples, they show that impact can be dramatically different.
I suggest you evaluate impact, time, and cost to prioritize your opportunities. Your firm may have a standard methodology to assess and approve projects. But take a look at Gartner analyst Rita Sallam's Risk Opportunity Appetite Return (ROAR) model to align investments with business priorities.
Identifying the highest value opportunities will get your transformation journey off on the right foot. What do you think? Let me know your thoughts in the comments below.