Three Organizational Best Practices for Becoming Data-Driven

Dave Stodder and I just finished writing our 4Q Best Practices Report on “What it Takes to Be Data-Driven: Technologies and Practices for Becoming a Smarter Organization.”  What struck me in analyzing the data for the report is that although organizations have embraced BI and analytics, they still have a journey in front of them to become data-driven.  About a third of our respondents felt that they were data-driven; another third felt the opposite.  The final third was on the fence.  The good news is that over 80% of respondents to the best practices survey felt they were moving in the right direction to become data-driven.

What does that right direction entail?  In the report, we describe the data-driven organization as one that makes informed, evidence-based decisions: that is, an organization that can formulate and answer business questions easily using relevant data, reports, visualizations, and analytics and take action on these decisions. Becoming data-driven is both an organizational ambition and an imperative that involves culture as well as technology.  It is about the using data to take decisive action, in addition to building relationships and trust around the data and how people look at the data and perform analysis.

There are certain technology and organizational characteristics of the data-driven organization.  On the technology side, this includes integrated data management and support, good data quality, an integrated analytics tools strategy, and the ability to operationalize analytics and drive action from these analytics.  On the organizational front, it includes strong leadership, transparency, governance, and an empowered team with a self-service culture.  Yet, a third of the respondents to our survey had no data governance in place and over 50% were not satisfied with how they were moving forward in terms of self-service.

The people side of the equation is often harder to overcome than the technology obstacles.  That’s why getting the people aspects right is so important. If the people in the organization don’t buy into becoming data-driven, then it likely won’t happen.  A few of the organizational best practices that help with individual change include:

• Incentives.  Only 7% of respondents use incentives such as bonuses or recognition for those who apply BI and analytics to decisions that deliver measurable output from efforts.  Organizations need to focus more on incentivizing individuals to make use of analytics. This cuts across the organization, from the business manager who might be using self-service analytics to the call-center agent who may use the results of an analysis to suggest a next best offer to a customer who calls.  Incentive plans should be well-thought out and attractive to specific roles.
• Empowerment.  The organization must empower users with the ability to apply data and analytics to solving business problems. It is not enough to supply users with self-service tools so they can be independent of IT. Users also need what IT can supply in terms of structure, governance, and facilitation of training and skills development. This helps to build confidence.
• Analytics literacy. Developing skills and analytics literacy is critical for success. This is the case for those performing analysis as well as those using the results of analysis as part of an operational business process. With literacy comes trust, which is also a key for success.  How can organizations expect a business user to perform an analysis if she doesn’t know how to use a tool or think critically about data?  How can a call center agent use the results of an analysis if he hasn’t bought into the idea or doesn’t understand what the results mean?  Knowledge helps people to feel empowered.

Of course, as one of our survey respondents noted, “In order to break down barriers it is important to take time to step back from both the analysts and the data and get to know people on a personal level.” Building relationships and trust is often the key to cultural change.

For more on building a data-driven organization, please read our latest best practices report which can be found at: tdwi.org