Across industries, the shift to digital solutions has exponentially increased the amount of data that’s generated - estimated at more than 2.5 quintillion bytes per day and growing. As a result, the way that organizations define, create and measure value has changed, along with the speed at which they use that data to drive innovation.

But just collecting data isn’t enough - organizations need an analytics strategy for how to leverage that data to fuel innovation and generate value.

What is analytics

There are probably plenty of different definitions of what analytics is, but the one that I keep coming back to is that analytics is “the process of turning data into insight to make better decisions.''  The reason I prefer this definition is that it makes it clear there are three important ingredients - data, insight, and decision - and if you are missing one of those, you’re not going to be able to leverage data to drive innovation and value creation in your organization.

More organizations are recognizing this and taking steps to unlock this value, but are facing a challenge making it stick.

Barriers to adoption

It used to be that the major stumbling block in leveraging data was storage and technology. It required both a financial and physical commitment to collect and store data, forcing many organizations to be judicious about what they collected and how they integrated it into their legacy systems and processes.  In fact, in one of my very first analytics roles, we only had 2 years of transactional data to use in our warehouse and had a process that rolled data off every Sunday night to manage space. It also wasn’t unusual for queries and models to run for hours, which stifled a lot of “what if” and exploratory thinking because it simply wasn’t practical to spend days on a project without a strong business case.

The introduction of cloud services like AWS have all but eliminated both of those barriers.  Data collection and storage is now a fraction of the cost it was just 10 years ago, and computing power can be dialed up/down on demand.  The other key game changer is the rise of SaaS, which makes it possible for organizations to mix-and-match different capabilities and services to create bespoke solutions for a fraction of the cost of enterprise software (or the time required).  Products like Google Analytics, Heap, Mixpanel, or Mode make it extremely easy to start unlocking value from data.

So where are today’s challenges?  I believe that they lie mainly in how organizations are approaching how they use data and analytics and integrate it within their organizations.  In my experience, there are four main causes:

Framework for leveraging data

There are many ways to overcome these obstacles to leverage data and analytics, and your approach will be dependent on your organization’s maturity and the sense of urgency.  That being said, I’ve found that there are 4 common elements in starting to properly leverage data:

Think about Amazon Echo or Google Home - they’re essentially listening devices that Cold War spies would have loved to use. Today, we accept them into our homes because they make managing the lights easier and faster to find things on the internet.  Thinking like a consumer as you’re identifying problems, developing modelled recommendations or developing products will help create adoption and a competitive differentiator.

Analytics and Innovation

Having an analytics and data strategy is important, but in order for it to generate value and benefits, it needs to be linked to and work within the larger organizational innovation and transformation strategy. What role does analytics play within an innovation mindset?  

I see analytics as a validator and enabler of an organization’s innovation and transformation strategy.  It does this in three ways:

Simply put, an analytics and data strategy needs to be incorporated as part of an organization’s broader innovation and transformation strategy to provide an answer to that all-important question - is this working?

Where Do We Go Next

For all ways data and analytics have changed organizations in the past 5 years, there’s still more change on the horizon. While no one knows for sure what will happen, I think there are three trends everyone should be on the lookout for:

Successfully using data and analytics to drive better decisions and support your innovation strategy is about more than hiring data scientists.  It’s about identifying the right questions you need data to answer and focusing your efforts around a defined problem, creating strong linkages with your overall business objectives and your innovation strategy, and focusing on delivering customer value to ensure adoption. It is not easy work, but it’s absolutely essential for organizations to compete and win in this digital world.

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