More C-suite executives understand their customers well in outperforming organisations according to a study published by IBM’s Institute of Business Value last year.  These business leaders increasingly want to interact with their customers across digital channels.  Achieving this requires initiatives to improve customer experience, create consistency in those experiences, address customers’ unmet needs and engage customers in social business.  These are enabled by gaining analytical insight into data, but CMOs in many organisations still feel under prepared for the acceleration in data volumes, and in particular they have made little progress with social media.

Last year I spoke to a number of CIOs from many industry sectors about the adoption of big data and analytics in their organisations.  A common theme was their focus on customer experience as a driver for analytics.  Two challenges are apparent as they try to deploy analytics for competitive advantage.  Firstly, access to ‘clean’, real-time data from multiple sources in what is a constantly changing landscape and, secondly, there must be a strong and clearly identifiable business outcome for investment.

Examples of the changing landscape include:
Deregulation which opens up well defined markets to new competitors.
Convergence of operational and enterprise technology with the internet of things.
Telemetry to aid infrastructure management or rate insurance risk.
Profiling for preventative healthcare.
Use of external data in decision making.
Insight into customers’ usage of products and services, when and for what purpose.

CIOs are not only struggling to capture and make sense of more data sources, but also they want to enable more of their resources to use the data to bring innovation rather than manage it.  There is an inertia to change where people have invested personally in tools and become wedded, perhaps now beyond the useful life of that tool.  In addition, data ‘ownership’ by a department can be a barrier to wider use, and even if that is overcome, data quality standards may diminish the value analytics could offer.  The inhibiting risk is in creating silos of data and expertise.

There is a wider issue of who owns the data strategy – the business or IT – and some are addressing it by bringing business people into IT.  It is a balance because the business understands how it operates and the outcomes it desires, and IT understands what it takes and costs to implement.  I see the balance of ownership influenced by industry, for example infrastructure heavy organisations have different risks to handle from information rich organisations.

Perhaps the most important challenge CIOs face is building a business case.  In most cases, precise return on investment is difficult to quantify.  Business cases are being built on intangibles with sponsorship based on judgement of competitive threat and gaining customer insight, for example.  Whilst the use of cloud services allows infrastructure investment to scale with use, the expertise necessary for big data and analytics projects is a high proportion of spend.

One easier route to a successful business case is the use real time information to put resources where they are most needed.  In today’s climate, many organisations are unwilling to support an investment case for a big solution.  A shorter term business case giving managers more flexibility in return for accountability can work.  It requires people in those parts of the business expected to benefit from the project to buy into the use of analytical insight and actions required from decisions made from it.  To embed cultural change, people need to have a degree of ownership in the success.  It is part of wider change management which is critical if organisations are to succeed in using big data and analytics to improve customer experience, and in turn drive business performance and competitive advantage.

By Chris Nott
Source: ibm.com