3 reasons why most data investments fail and what to do about it
“Less than 25% of organisations feel that their Data&Analytics maturity has reached a level where it has actually optimised business outcomes” HBR
1) Most data investments are technology driven only
The question of how will we measure the impact of our data investments is rarely asked.
Why? Because investing in data tech is seen as the end goal and not the means.
Many companies will think “job done” after signing a big cheque to a respectable tech company that will give them access to data and fancy dashboards. However, investing in tech should be seen as one element of the data agenda but certainly not as the milestone equating to running a data-informed business.
By the way, investing in tech is not even the first step of the data agenda. Asking the right business questions is. If the organisation has not spent some quality time identifying the right business questions to answer department by department, defining the right KPIs and the actions that should be derived from the data, then investing in data tech resumes as playing the lottery: there’s a very small chance you’ll win at the end. Tech is fancy, tech is sexy, tech is fast, but tech doesn’t make decisions, tech doesn’t run businesses, tech doesn’t understand business or customers, well, at least not yet and not fully. So, tech is one piece of the puzzle.
But with most conversations and focus being about tech, no wonder the puzzle never sees life…
If there is no explicit process to get from questions to KPIs to tech to insights to decisions, then nothing will happen.
So first, organisations should spend some hard time figuring out what questions are worth answering, what their true KPIs are and what actions can be taken and only then, they can worry about where the data is going to come from.
2) Business learnings through data are not encouraged enough, it’s all about the money
Quantify the benefits of this new change we have made, will you? Or how much are we leaving on the table? Both are very reasonable questions. However, we hear less questions like: what can we learn from this analysis?
Don’t get me wrong, I am a data evangelist and so I genuinely think that being ROI focussed is great. But, adopting a learning mindset when it comes to analysing data can be truly rewarding for everyone involved.
Why? Because it may well give your organisation a competitive advantage.
Think about it this way: everyone is looking for financial ROI, not everyone is looking for insights that can help them transform their organisation, compete in a different game or re-invent themselves.
So learnings through insights should be encouraged more.
Also think about it from the analyst’s perspective. Personally, I find it very satisfying to be able to report back and say: here is your number.
However, I find it a lot more stimulating to report back and say: I have some amazing learnings to share (that we have never talked about) and that we can start acting upon from today!
3) Leadership teams need to have a data plan and enforce it
Leadership teams need to become much more embedded in the data agenda and not just by signing big cheques to data tech companies, see paragraph number one above😊.
They need to set clearer objectives when it comes to leveraging data. And for that they need a proper plan in place. In fact, the plan should have been written way before the investment in tech was made. But that rarely happens. What tends to happen instead is this: they will sign the cheque because it feels like a big deal. They will wait for a few months and start asking to see a few dashboards on an ad-hoc basis, until the next sexy tech vendor comes along! And then the same story will repeat itself.
Sometimes, leadership teams will quite happily invest in costly data training (most of it will be about sexy tech of course…) but expect nothing in return. That’s not a plan.
No, instead, they need to expect more from everybody involved in the data agenda.
Leaders should expect frequent data stories from everyone who has been trained, expect more data driven learnings from analysts, expect most of the decisions made by team leaders to be data informed.
In fact, if a company is really serious about their data agenda, they should start measuring departments, teams and individuals’ performance through their increased data usage when making decisions. This will start impacting day to day mindset and behaviour for real, it will move organisations in the right direction and they will start reaping the rewards.
