Asia and the Analytics Conundrum
White Papers | July, 2016
By Steve Stine
There’s never been a better time to be an analyst.
While historically analytics was consigned to the metaphorical fireplace in an organisation, to be acknowledged and occasionally fed but largely ignored, today the story is much evolved. The vast amounts of data being produced in ever greater amounts has led to a renewed interest in making sense of this information treasure trove, and successfully unlocking its secrets can be a tremendous boon to businesses.
But the discipline is not without its challenges. Many organisations have not yet worked out how to store and organise the data they are generating, let alone analyse it. IT infrastructure is evolving, but not always in the right direction, and certainly not always fast enough in Asia. And then there’s the more fundamental problem of a lack of skilled talent to actually execute the analysis that so many companies desperately need.
So has the hype outpaced reality once again, and is analytics simply the latest in a chain of Big Tech promises that has yet to yield the anticipated results? Yes and No.
Like e-commerce in the late 1990s, digital marketing at the turn of the century, and cloud computing of late, analytics – while momentarily overshadowed by the so-called Internet of Everything – remains the blue-eyed child of the Internet era.
Analytics, as defined by the Tech giants, refers to the capabilities that enable an organisation to consume data faster by moving from raw data to insight-driven actions in order to generate key differentiators that in turn, create value.
IBM’s Annual Analytics Survey:
Based on IBM’s annual analytics survey, 63% of organisations that have deployed analytics solutions claim a positive return on investment within one year. More than two-thirds (69%) say a “speed-driven” analytics organisation created “a significant positive impact on business outcomes.” And 74% of survey respondents said that “data-driven insights will continue to accelerate.”1
While this all sounds very promising, realising the dream has not always proven easy. “The avenues are littered with failed attempts to successfully deploy analytics projects,” says one management consultant who has seen first-hand his share of analytics investment failures.
Some argue that it is the sheer complexity of the analytics undertaking that alludes organisations. No doubt, e-commerce and social media deployments have posed their own unique set of technical challenges, but little compares to the petabytes of data that in an analytics undertaking must first be sorted, “scrubbed,” and segmented. Complex mathematical formulas, or so-called algorithms, must then be designed and applied, tested, refined and tested again – all in the service of a better, more efficient or more customer-centric “discovery” that must then, in turn, be applied to a business in order to increase operating margins.
The Future's Bright
The good news is that technology tools are becoming increasingly accessible, affordable and usable, while computer processing speed is all the time accelerating. Says one technology sector commentator:
IBM, Oracle, SAP, SAS, Microsoft and others are all laying big bets on Analytics as the engine of future IT investment, but even IBM in its recent report acknowledges that “big data adoption in the broader marketplace has remained flat since 2012.”2
Adoption in Asia Pacific appears even lower than in North America and Europe. Getting beneath the question as to why this may be the case, DHR International has undertaken a seven-market study across the region to determine why analytics investment has not kept pace with the promise. “We’re still in the education phase,” says one analytics practice head for a global management consulting firm. But for others, the problem is more complex.
“In this part of the world, we’re a long way off from where analytics is built into the business,” says one leading human resources professional. “Analytics projects aren’t always sponsored at the senior-most levels, so unfortunately, they don’t receive the attention or appropriate level of investment necessary to make a difference,” he says.
One digital lead for a global management consulting firm concurs:
...Start somewhere, but do start
Yet, some say, being non-committal is only a part of the problem. Technology vendors and management consulting firms alike, say identifying and working effectively with the right sponsors on the client side is one of the single greatest barriers to analytics deployment in Asia.
“Analytics is falling through the cracks,” says the Asia CMO for one of the world’s largest insurance companies. “It’s an issue of ownership. Sometimes the CTO is given the lead,
and other times it falls to the CMO to get the job done …Neither [executive] has a full view of the business.”
For analytics to work, say experts, it is essential to address a “mission critical” issue or so-called “pain point” within the organisation in order truly experience the potential insight that analytics can deliver to an organisation.
Asia’s management consulting community concede, saying that while a “pilot” project makes the most sense from both a budgetary and risk perspective, pilots are oftentimes too small and isolated to deliver the big-bang results sufficient to catalyse enterprise-wide action.
Most would admit, it’s better to start somewhere, but even this can prove challenging. “Identifying the right stake-holder within an organisation, who is truly empowered to take an analytics project forward, is not always an easy thing to do,” said one consultancy practice leader.
CEOs or CFOs are the most obvious sponsors for such undertakings when you consider that analytics is seeking to solve a customer, revenue, or operational efficiency problem. But few have the capacity to give these projects the time and attention they deserve. Depending on one’s professional orientation, analytics tends to feel like either a back-end technology, or front-end customer issue, and therefore it is the respective technology or marketing head that gets saddled with the project.
Therein lies the rub, say the region’s analytics products and service leaders. Identifying, narrowing, scoping and delivering on an analytics project requires a 360 degree view of the business. “For many CEOs and CFOs, the mere mention of ‘analytics’ evokes images of large data warehouses, processors and technical geeks all bent on crunching and analysing data,” says one consultant. “While there’s some truth in this, it vastly underestimates the necessity of commercial input from front-line sales and marketing leaders.” Says one industry commentator: “Telling an IT department to manage an analytics delivery is like telling a scrub nurse to single-handedly perform open-heart surgery.”
The real problem, it seems, is the availability and experience of the right talent within an organization to develop analytics as a core competency. “Analytics is not an IT issue, it’s a people issue,” says one lead consultant. “If we want to accelerate the successful application of analytics in the workplace, we need to invest in the right people to get the job done.”
1 Analytics: The Speed Advantage, IBM Global Business Services, 2014, p1
2 IBID, p 6