Inside the insight-driven organization: Making better decisions with analytics
Short takes...on Analytics
A blog by John Lucker, principal, global advanced analytics & modeling market leader, Deloitte & Touche LLP
Making better decisions with analytics
Good ideas may be a dime a dozen, but the best ideas are golden. The idea of the insight-driven organization (IDO) is quickly catching hold, adding new value to tried and true processes, as companies realize the intrinsic value of making strategic decisions backed by analytics and data-driven insights. The IDO embeds analysis, data, and reasoning into the decision-making process, every day.
The promise of the IDO is easy to understand: Imagine an entire organization taking advantage of data-based insights to drive large and small decisions, everywhere in the business, all the time. Most companies have developed pockets of analytics-driven capabilities; in the IDO, data-driven insights become embedded into day-to-day processes.
What led to the rise of the IDO? Advances in behavioral science are allowing us to better understand how data-based insights can improve human decision making, resulting in decisions that are more accurate, complex, and consistent than those made by intuition or gut feel alone. When humans augment their experiences and knowledge with a stream of analytics-driven insights, the impact on the value of decisions can be extraordinary.
Scaling effective projects across the IDO
As organizations have become proficient at collecting and managing data, the next challenge is applying analytics to realize real value. As more and more data continues to be collected—from social media, sales, and customer records, even from products themselves through the Internet of Things (IoT)—the opportunity to find valuable insights through analytics is ever-expanding.
Many companies are making great strides in terms of analytics effort. Yet, truly becoming an IDO requires scaling the most effective projects across the organization, allowing analytics to have an even greater business impact as insight-driven decision making becomes second nature. Also, adapting solutions to be repeatable in similar or identical contexts helps bring a production paradigm to the IDO. Adopting the IDO mindset can help businesses do more, faster, and with better results:
- Improve the speed of decision-making: React more quickly, whether assessing risk in extending a loan or offering a discount to a new customer.
- Decrease the cost of decision-making: By taking advantage of data and information that already exists, less research or deliberation needs to go into making a sound decision.
- Make better decisions: Relying on a deeper, fact-based understanding of your customers and your market can lead to better results.
- Become more innovative: Discover market needs and apply new technologies to take advantage of them.
Insights deliver value to every industry
How does IDO play out in the real world? Consider one global insurer that had been pursuing analytics at the business level for years. They recognized an opportunity to gain a competitive edge by combining its strengths across the organization and implemented an enterprise-wide data analytics strategy that integrated and encouraged collaboration between country-level business units and the centralized function. New approaches such as launching a “Big Data Lake” (an easily accessible data warehouse with massive processing power that stores primary data in unaltered form and in many formats and types [structured, unstructured and numeric, text, audio, video, etc.]) and establishing a Global Chief Data Officer role helped accelerate insights.
Now that all business units can draw from the same deep well of information, the insurer has realized revenue growth through improved pricing, additional sales opportunities, expanded product offerings, and improved cost control through its claims and underwriting management.
Becoming an IDO
What does it take to become insight-driven? How can you begin to apply analytics to the decision-making process?
Start by identifying your organization’s key objectives and how analytics can help achieve them. How can you use insights to innovate on the services you provide? Do you have the right mix of technical, analytical, communication, and business acumen to implement and follow through with an IDO strategy? Do you have a clear line of sight from business decisions to data sources?
By establishing a strategic framework—a roadmap—for analytics, businesses can find long-term value in their data, improve the quality of decision making, and gain competitive advantage.
Becoming an IDO requires making a commitment to integrate all of the resources within the organization to take advantage of all that technology, processes, and people have to offer. And as organizations begin to realize competitive advantages, it becomes a strategic new way of doing business. Will you lead the charge in your enterprise?
Learn more about the insight-driven organization and other analytics advancements in Analytics Trends 2016: The next evolution.