Stacking the odds for analytics-driven innovation success
Companies are using analytics to distinguish themselves from their competition. Given the widespread availability of analytics tools, this may be somewhat surprising. It certainly suggests that only some companies are fully able to take advantage of those analytical tools and use them to create value. This is the conclusion from the MIT Sloan Management Review Data and Analytics Report, which goes on to suggest that analytics is a growing source of competitive advantage.
We know that analytics-driven innovation has the potential to create business value. We have seen this time and time again, across a wide range of applications, industries and arenas. We have also, however, seen innovations that have not created business value. Some of these have simply failed to take hold, and others have perhaps not fitted with existing business processes, or were the right idea at the wrong time.
Innovation can be an expensive process. It can take time and money to develop analytical processes, to put in place the data preparation, management and governance processes, and to run pilots and move them into production. Few organisations can afford to fail repeatedly with innovations. But are there things that can be done to improve the chances of navigating analytics-driven innovation towards greater business value?
Combining and embedding analytics
One issue to consider is whether analytics really needs to be an either/or. Some organisations may fail to make the shift to a data-driven approach because they try to move too far, too fast. In adopting analytics, they aim to abandon tried and tested decision-making methods, and refuse to allow anyone to rely on their intuition. This often results in ‘throwing the baby out with the bathwater’.
Intuition, or ‘gut feeling’ is not magic, or imagination. It is the result of the combination of experience and knowledge. Individuals may not know why something feels wrong, but they know that it does. If the answer from the data contradicts too many people’s gut feeling, it is likely that something is going on. The strongest decision-making is supported by both data and intuition. Wise organisations bring the two together. We are, after all, talking about data-driven decision-making, not data-only.
People not processes
Organisations also overlook people at their peril. Any change, of any kind, relies on people. Introducing a new technology, including analytics, is not primarily a technology issue. It is, instead, all about people: their acceptance, adoption and ongoing use of the technology. If people are not prepared to accept and use technology, then it will be ignored, and will not generate any value. This is a key aspect in analytics-driven innovation.
Sometimes innovation requires a complete rethink of how you generate value. Your core business may actually change as a result of analytics-driven innovation. Organisations that succeed in generating value from analytics have often been prepared to re-invent themselves, sometimes radically. A well known example is PrintFleet, an organisation that used to replace printing supplies, and reinvented itself using analytics, to become a company that helps its customers to manage their printing operations much more generally.
In analytics-driven innovation, especially where AI is involved, there are likely to be fundamental shifts within organisations. Even if the basic premise of the organisation does not change completely, individuals’ day-to-day work may change radically. The idea of this can be very threatening for individuals. In practice, organisations that successfully embed AI into their processes report that employees are freed up to do more value-generating activity. The partnership between people and AI results in more rewarding work, and better value for the organisation.
Acceptance of this is partly about how it is presented. It is also, however, partly about the organisation’s approach to ethical issues. Open discussion of concerns can often prevent them from becoming the focus of resistance.
Curiosity in action
We are interested in how the process of creating value from analytics-driven innovation has shifted since the pandemic and associated uncertainties and constraints. This year’s SAS Expert Study has been designed to harness the collective thinking of our partners who also engage with customers on a daily basis. Specifically, our domain experts will be in conversation with client directors in global systems integrators to explore shifts in sentiment over the past 12 months.
We want to understand how organisations are using data to drive innovation, and particularly the dynamics of the data-driven process. We will be looking at various issues, including the level of formality of processes and collaboration within the organisation, the challenges that organisations face in introducing innovations, and why innovative ideas have failed to gain traction.
Good quality research is the foundation of understanding. We are just emerging from a high-impact global hackathon that produced awe-inspiring cases. But how will they life on in the real world, and be integrated into business as usual? We want to understand how innovation at scale works in practice. Will you join us?
https://www.sas.com/sas/offers/innovation-at-scale-expert-study.html
