I have a buddy who’s a golfer—really more of a duffer, but he tries hard. He also spends a lot of money on equipment. He truly believes that each new driver or wedge will get him to sub-90. But it never does. To me the answer is obvious. My friend’s problem isn’t equipment; it’s his approach to the game. He doesn’t do what he needs to play better. No lessons, no swing improvement, and not enough structured practice. Eighteen holes on Sunday morning with a cooler won’t do it. But my buddy keeps on spending on equipment, oblivious—and getting poorer by the month.
What’s the point of this? It’s not just a sob story; it’s relevant to a lot of what I see and hear when I talk to clients about their analytics programs. They spend a lot of money year after year, with little improvement in results. They chase after the latest and greatest tools, but they’re not doing the things they need to, to get better. What’s worse, analytics tools are seriously more expensive than golf clubs. It’s often a downward spiral that ultimately costs someone a job.
There are two categories of outcomes that will affect the success of your analytics efforts: business outcomes and technology outcomes. Business outcomes are the results of devising and implementing your business strategies. Technology outcomes are the results of how well our technology performs in helping you realize your desired business outcomes. If your business and technology outcomes aren’t well defined, and they aren’t in sync, it won’t matter how many analytics tools you buy, your analytics efforts will struggle.
Markets are changing faster than ever, and the future comes at you before you can blink. To survive the changes and capitalize on that future, I believe that business-outcome success should be defined keeping three criteria in mind:
- How you deal with customers. It’s not enough anymore to satisfy your customers. You must delight them. To delight them, it’s critical to create a sense of greater intimacy between your business and your customers. Customers want to feel as if you know them—what they need, what they want, and—most importantly—what they don’t know they want.
- How you manage and mitigate risk. There’s no reward without risk, but too much risk leads to disaster. What’s more, the types of risks have multiplied exponentially (fraud, cyber-security, market, economic, political) and it’s essential to evaluate them appropriately and manage them effectively. It’s essential to integrate technology—especially AI—into all aspects of risk management.
- How you innovate. Innovate—both in terms of what you offer the market and how you operate your business. Social media has changed the market landscape and businesses that don’t constantly innovate die more quickly than ever. Innovation won’t be possible, however, unless your business is operating at its optimal level. To do that, you must constantly innovate your operations to achieve and maintain operational excellence.
The only thing changing faster than the markets these days is the technology being developed to help companies master those markets. Once beyond the reach of many companies, predictive analytics has become table stakes. Architectures have also changed. The cloud is no longer an option, it’s a necessity for flexibility and security. But what kind of cloud? And what’s the relationship between analytics and the cloud? Those are questions that must be addressed and answered in terms of the potential outcomes for different options and combinations. The key to determining what options will work best for your business will be to look at those options through the prism of your business outcomes.
Creating customer intimacy requires massive amounts of data and complex, sophisticated analytics capabilities—think AI and machine learning. Risk management also requires complex analytics and sophisticated analytics, but it requires ironclad security as well. Continual innovation and operational excellence requires it all—big data, sophisticated analytics, and security—but it also requires flexibility in your IT infrastructure. You must be able to spin up or spin down, according to your information or project needs.
There are so many options out there: public, private, and hybrid clouds; intelligent clouds that mingle the cloud with analytics technology (my personal favorite); and machine learning algorithms to augment those analytics. The list is almost endless. However, the technology options you choose must be purchased with the goal of enabling you to meet those high-impact business outcomes that you’ve defined. If you don’t have clear outcomes in mind, and match the technology to those outcomes, the technology is useless—just like my buddy’s latest $500 driver, coupled with that terrible swing, can’t get him a 300-yard drive, no matter how hard he hits it.
Jan 15, 2021