Trouble Executing on Analytics? You May Need a CAO
A rigorous business analytics platform will require that changes be made to an array of processes, policies, and structures. A CAO can implement these changes while keeping every department motivated and on the same page.
IT resources are becoming increasingly abstracted, and companies need advanced business analytics to ensure that resources are optimized and wasteful spend is minimized. Companies are catching on: experts expect global revenue in the business intelligence and analytics market to reach $16.9 billion in 2016, which represents an increase of 5.2% from 2015. Yet while investment in a business analytics platform is one necessary step, it may not be enough.
As large companies work to incorporate a business analytics platform into their operational infrastructure, they will likely find a bottom-up approach to be ineffective or inefficient. Proper implementation of business analytics requires companies alter many of their pre-existing processes, policies, and structures. These changes will be beneficial in the long-term, but only if carried out properly — and if they’re made without clear communication with the entire company throughout the entire process, certain departments may become frustrated or resistant.
For these reasons, many organizations are choosing to hire a Chief Analytics Officer (CAO).
Particularly in the beginning of her tenure, the chief role of a CAO is to establish a vision for and convey a message regarding their company’s business analytics. As Gartner notes, a proper vision should be “future-oriented, time-bounded, aspirational, and sticky in terms of how the vision becomes integrated into corporate culture and drives successful business outcomes.”
The CAO’s vision will make sure that future analytics use meshes with the company’s culture and goals, instead of conflicting with them. The establishment of a business analytics vision may be the most important step in the implementation of an analytics platform, as it will prevent wasteful spend and misallocated resources in the future.
Just as essential is the delivery of a clear, direct message to the company. This message will explain the ins and outs of business analytics to each department: not just how analytics will be utilized, but why. In other words, the CAO’s message will explain how business analytics will actually benefit the company and each department. As departments adjust to new processes, this type of clear explanation will be essential.
Even after the CAO has incorporated business analytics into a company’s operations, they will continue to serve as an important intermediary between different departments.
Communication between business and analytics often leads to frustration, with business professionals lacking an analytics background and analytics professionals lacking business know-how. Companies that effectively bridge this gap can avoid devastating impacts on performance. In a recent study, Watson Wyatt revealed that companies that communicate most effectively are more than 50% more likely to report turnover rates below industry average. Similarly, a Towers Watson study found that companies with highly effective communication report 47% higher total returns to shareholders than those companies that communicate less effectively.
A CAO is uniquely positioned to overcome these communication issues through the creation of a common language that the entire company will use to understand analytics function and spend. By establishing standards with which to discuss business analytics, the CAO can draw every department into a common dialogue and ensure that nobody is left confused or frustrated. For instance, if IT wishes to buy more servers, they will be able to effectively communicate their reasoning to other departments; if marketing feels that certain practices are limiting reach, they can rely on detailed metrics to prove their point.
In a recent Wall Street Journal blog post, Thomas Davenport calls CAO’s “sales reps for a different approach to decision-making.”
What Thomas means is that the CAO’s role involves incorporating advanced analytics into an array of decision-making strategies, whether they involve risk management, marketing, or the budgeting of scalable services like cloud computing. With the right CAO, these operations and many more can be made data responsive without disrupting workflow or starting from scratch. Just ask insurance company Aviva, which now staffs over 100 quantitative analysts under CAO Adam Kornick.
Whether or not your company is in the market for a new executive, these business intelligence strategies can’t be effective without the proper tools. With a strong business value dashboard, like TeamQuest’s Vityl Dashboard, communicating important information across skill sets and departments is easy. Every company should weave IT into their analytics strategy with a customizable IT dashboard that minimizes cost and optimizes service.