Building an Analytics Ecosystem to help the business and change the image of IT...

I recently attended a large family holiday gathering and as per usual, those relegated to the “kids’ table” joked about forever carrying the image of “kids” despite all of them being adults.  It reminded me of something I’ve previously mentioned where some CIOs struggle for a seat at the executive table, seeming to forever carry the image of “techies” rather than business leaders.  I actually think it might be easier to alter the “techie” image than it is to graduate from the kids’ to the adults’ table because despite having my own children, I still sometimes find myself at the kids’ table. Yet, I’ve helped several CIOs move from the “techie” to the business leader table.

In addition to the ideas mentioned in that previous blog article, I think working with business leaders to create an analytics ecosystem and roadmap is an excellent way for CIOs to develop their business leader street creds.  To get started, if you don’t have a working knowledge of the various analytics categories, I recommend reading a book such as, “Big Data Analytics Infrastructure for Dummies.”

There are four basic types of analytics, each appropriate for different business uses and each using different tool sets.  Building an effective ecosystem and realistic roadmap requires understanding these business uses.

Four Basic Types of Analytics

1. Descriptive:

•       Used to provide basic statistics such as averages, totals, frequencies, causal relationship

•       Probably the most commonly used type of analytics done today

2. Predictive:

•       Helps see what the future may bring by using statistical models

•       Helps forecasts future revenue, profits, or operational outcome by modeling relationships between variables

•       Mostly used for planning

3. Prescriptive:

•       Optimizes predictive analytics scenarios for the best future outcome

•       Considers new inputs or constraints specific to a given situation

•       Recommends actions

•       Used for tactical planning

4. Cognitive:

•       Uses techniques and a high-performance infrastructure to identify non-intuitive relationships

•       Typically analyzes diverse sets of data

•       Often used for break-through ideas

Regardless of the type of analysis, the speed to gaining insight from data is the key to business impact.  It can mean the difference between leading and following in an industry.  Therefore, don't underestimate the business value of having systems, storage and databases that work well together as a team.  However, let's not dive into important nuances of technical solutions but return to discussing the business.

Most C-level executives have multiple analytics requirements.  For example Marketing typically wants analytics to help with client segmentation, understanding client sentiment and reducing client churn.  Finance wants help with planning and forecasting, automating financial and management reporting and improving visibility, insight and control.  Meanwhile, Risk needs analytics to improve risk-awareness in decision-making, manage financial and operational risks and reduce compliance costs.  And Operations might use analytics to optimize the supply chain, deploy predictive maintenance processes and improve fraud identification processes.

  

Often those executives will each buy niche solutions to help them answer their specific questions.  The result is a disconnected set of tools, capable of addressing a myriad of pin-point business questions but that yields sub-optimal business insight because the toolset fails to connect insights across business units. For example, analytical insights in risk management can and should improve insights in financial management, marketing and operations and vice versa.  But unless those analytics solutions were architected and designed for integration, chances are low that they will work well together.

The CIO can provide tremendous business value in this area because the CIO sees across all parts of the business and sees potential integration points between different groups.  The CIO probably is in the best position to gather the full spectrum of analytics requirements, help prioritize them and order their implementation schedules according to business impact, and then build an integrated analytics ecosystem to manage, integrate, govern and analyze data in the most effective way for the business.  This feat alone often earns a CIO the right to move from the techie to the business table. 

If you’d like help planning your approach to building an integrated analytics ecosystem, feel free to contact me.  Unfortunately, if you’re looking for help strategizing how to move from the little kids’ to the adults’ table at your next family holiday gathering, I’m probably not going to be much help.  I’m still trying to figure that one out myself.

Getting IT a Seat at the Table

I’ve noticed a growing trend where CxO business leaders bypass the central IT organization for IT projects.  Often it’s the product of a “chicken and egg” situation. 

Business leaders feel IT isn’t responsive enough filling requests so they form their own workgroups that choose “best of breed” solutions, the implementations of which wind up failing (see previous article about the extremely high failure rate of projects) and then they dump the project in IT’s lap to save the day.  Why doesn’t IT respond quickly to business requests?  They’re consumed retrofitting “best of breed” solutions chosen by teams that didn’t involve the IT organization or didn’t involve them early enough. 

Statistics indicate that business leaders bypass IT as much as 65% of the time.  The sheer volume exacerbates the problem because the central IT team just gets more swamped performing personal heroics to salvage projects undertaken without sound infrastructure considerations early in the process. 

So, how does a CIO break this cycle and win a “seat at the table” with the other business leaders.  I’ve coached clients on many effective approaches but here are a few to try. If you’re interested in more details, send me a note.

1.  Ask to be part of the business strategy sessions.  If that is not possible, then ask to see the business goals and key projects that emerge from the business strategic planning process.  This gives you much more advance notice of the types of projects that will require IT.  Few strategic business projects these days don’t involve IT and many are outright IT projects.  Gather your team to determine the IT implications for supporting the strategic business projects and approach business leaders with ideas for the plan.
2. Explain the value of coordinating across all IT projects and having the IT organization lead that coordination.  Since IT is a component for almost all business projects, it puts IT in a position to increase collaboration between the individual strategic work streams for the business and to take a holistic approach rather than piecemeal one.  For example, one client for which I helped create an IT strategy had over 20 business projects that involved Analytics.  By the CIO leading the overall effort, the IT organization helped create an optimized infrastructure to support a prioritized roadmap for the full set of 20+ analytics projects.
3. If the business leaders will not invite you to their business strategy sessions, invite them to your IT strategy sessions.  If you do this, you will need to take a business approach to your IT strategic planning.  Understand business goals and key projects across all disciplines, have the business leaders prioritize across the full set of projects and then determine the IT implications for supporting these projects. This effort should also include exercises to understand the current and desired future states for the IT Provider Relationship (see previous article 1 and previous article 2) as well as all IT capability areas. 
4. Improve IT service quality in key areas.  Many times the IT organization is seen as providing sub-optimal IT services.  They might have enough ITIL certifications to wallpaper the office yet still have poor service quality.  Fix your IT service framework so that you truly offer services rather than just call applications services.  Take a practical rather than academic approach to instituting your IT service model.
5. Invest in a few good architects who can bridge between the language of business and the language of technology.  Many times IT is not invited to the table because they are seen as speaking a different language from that of business.  This results in IT being seen as techies rather than business people.  A few good architects can work miracles to change that perception.
6. Engage outside assistance.  As the saying goes, prophets are often scorned in their own land.  Sometimes using an outside organization to facilitate IT strategic planning or IT Service management improvement efforts gains a lot of credibility because the IT organization cannot be accused of being insulated or self-focused.
7. Institute effective governance and enterprise architecture processes.  Most business leaders circumvent IT because their project will deliver time-sensitive competitive advantage that can’t endure idling in the IT project backlog.  Enterprise architecture aligns business and IT at many levels to ensure IT can provide needed competitive differentiation efficiently as well as run mundane daily operations effectively.  Governance defines decision-making processes and authorities and includes offering, portfolio and project management.  Many clients that consistently deploy projects successfully use architecture boards as governing bodies to focus IT on the right projects and create architectural standards to streamline solution creation, deployment and maintenance.  If IT lacks the capability and capacity to deliver the highest priority business projects in a timely fashion, there’s usually governance and/or an architecture issues lurking about.
8. Assess IT resource (financial and human) deployment between day-to-day maintenance and competitively differentiating work.  The results of such analysis, when packaged in business language, are often good fodder for having a discussion with business leaders.
9. Combine business and IT project management offices.  This demonstrates you understand business and IT interdependencies required for successful project execution and increases project success. 
10. If you can’t win-over the CEO or full C-suite, find one advocate in the group and undertake a project with that business leader.  This demonstrates the value of business / IT partnership in planning the project all the way through execution.  If you do this, you need a strong project manager because you want to showcase this with other CxOs.  Hope for winning over skeptics diminishes if the project stalls or fails.

These are just 10 suggestions and I don’t recommend trying all of them at once.  Actually, I would recommend choosing only one or maybe two.  I offer a longer list because the right one to try will depend upon the business context and personalities involved.  But all of them help build the IT organization’s and your personal credibility as being business-minded rather than enamored with technology.