For any company that depends on data to drive its applications and business strategies — and let’s face that means most enterprises — Gartner’s recent research that shows nearly half of IT leaders planning further investment in analytics over the next year will be no surprise.
Using Enterprise Data
While it is true that everyone needs data, it is not always true that everyone knows what their data is doing, and these new investments aim to remedy that. One major point of interest in the findings of the Chief Data Officer survey, which was carried out early last summer, is that many of the analytics investments will be used to monitor and support digital transformation strategies.
It should also be noted that if nearly 50% of enterprises are looking to invest in analytics, another 50% are not. In fact, the CDO survey found that less than 50% of documented corporate strategies don’t mention data and analytics as key components for delivering enterprise value. The reason for this? According to Mike Rollings, research vice president at Gartner, the real reason is the limitations of traditional analytics offerings.
That is because traditional data and analytics strategies overlook the demands of digital business. Modern data and analytics serve a broader enterprise purpose and are more integrated into the ways people work than ever before, causing a new approach to data and analytics strategy to emerge. “IT leaders need to look at data first to succeed in their digital initiatives, rather than treating them as an afterthought to help with ad-hoc projects,” Rolling said during the Gartner IT Symposium/Xpo in Orlando last week.
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The importance of analytics, though, was underlined by the fact that CDO respondents in the survey found that the implementation of a data and analytics strategy was ranked the third most-critical success. So, what are enterprises using analytics for?
In 2019 many businesses are successfully leveraging analytics to drive paid marketing decisions, but in 2020 there will be more businesses utilizing analytics to measure employee performance in a more granular way, Calloway Cook, founder of New York City-based Illuminate Labs told us.
Many businesses have simple KPIs like sales and leads driven and don't measure employees on anything else. “With new software tools emerging annually to measure employee performance on metrics like efficiency per hour worked and efficiency at different times of day, companies should be able to further optimize the output of their employees without working them more hours,” Cook said.
That said, Deloitte claims that the number one success factor for CMOs today is the ability to effectively use customer data and analytics. Yet companies today are not demonstrating consistent ROI on their marketing analytics investment.
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Bucking Analytics Trends
Based on that, other Gartner research shows that by 2023, 60 percent of CMOs will slash the size of their marketing analytics departments by 50 percent because of a failure to realize promised improvements. Often this is a problem that results from not having the necessary organizational structure or leaders in place.
However, Eric Bradlow, vice dean of analytics at Wharton School of the University of Pennsylvania and founder of GBH Insights says there are five ways CMOs and marketing leaders can drive stronger results and ROI for their marketing analytics investment to buck Gartner's prediction:
1) Build Organizational Structure to Apply Better Data
To effectively use the power of analytics, companies need to develop organizational structure and processes to be able to quickly and automatically collect, analyze, and act on available data. Tapping into the right data continues to be a challenge.
2) Develop Analytics Leaders
Analytics leaders are those who bridge both data science with marketing strategy. Another key success factor for companies is developing and hiring the right leaders who can bridge both data science and business strategy. Simply put, analytics leaders need to know enough about the business to ask the right questions of data.
3) Hire a Chief Analytics Officer
Enterprises need to up level the importance of analytics. So how do companies increase the importance of analytics, and develop the data-driven culture, capabilities and leaders needed to successfully transform their organization? One trend we are seeing is the emergence of the Chief Analytics Officer, or Chief Data Scientist across more organizations.
4) Focus on Better Data, Not Big Data
An ongoing challenge organizations face today is what we call better data, not big data. Too often we see companies that are collecting data for data's sake, rather than taking a lean approach where they only collect data when it helps optimize the experience for their target customers, or better prediction of future behaviors.
5) Separate the Signal from the Noise
Enterprises that do this continue to predict and optimize business outcomes. Improving ROI for marketing analytics requires constant learning and experimentation to separate the signal from noise. There's no better way to learn about your customer than to see what works and what doesn't.
“Many marketers know the Holy Grail phrase, deliver the right product to the right person at the right time,” Bradlow said. “In the past, this was more difficult because we didn't know where consumers were. Now when marketers use better data, they know where the customer was and is more likely to be — providing the foundation for the ultimate in contextual 1:1 marketing."
Dina Kholkar is VP and global head of analytics and insights at Tata Consultancy Services. He points to the future and the role of data is likely to play in the enterprises. Data democratization, he said, is the key to success for CIOs in 2020, and is becoming increasingly more impactful to the digital workplace. While data democratization has been a hot topic among CIOs and Chief Data Officers for some time, in 2020, it will become a more critical board issue. “The CIOs who will have the most success will be those who make data more accessible to employees, while being mindful of ethics and security, and improve systems performance across the enterprise,” he said.