The People Dilemma of Analytics

October 19, 2016 by Anne-Frances Hutchinson

“Why are advancements in data analytics leapfrogging the organizational capacity to accept the insights found in the data and to act to realize the benefits?”

That’s the question analyst Richard Sarkissian asked in a 2015 Deloitte report. While analytics has made it possible to combine data from many different sources to create previously unrecognized value for an organization, findings from such analyses are “sometimes rejected or discredited by the very organizations they were intended to help.”

In Sarkissian’s view, there are two main avenues from which companies are approaching analytics. The first and most common way is to use analytics to respond to recognized issues. In this approach, the push for analytics comes from people who have targeted an area for improvement and have doubled-down on technology as an agent of change.

“In solving known problems, data analytics generally supports the current organization’s roles and responsibilities, and the path from analysis to acceptance to action is fairly simple,” he wrote.

That’s where simplicity ends.

The second avenue, using analytics to reveal previously unframed issues, is littered with organizational minefields. In some organizations, there can be significant barriers to accepting the insights gleaned from analytics.

A program’s leader, for example, may have the power to make changes in their area but also accepts the risk and bears any penalties that result if the changes fail. Depending on the company culture and management history, such programs may not be worth the risk.

It would also seem that the more touch points that must be made across functions, teams or organizational siloes to get buy-in, the more difficult it might be to achieve. “In our experience, when analytics serves to assist a single function in addressing a distinct challenge, adoption is high but value is low.

When analytics transcends traditional functional walls and provides answers to “unasked” and more complex questions, the opposite is true,” said Sarkissian.

To move beyond answering simple, focused questions, or as the author called it, “answering the mail,” requires permission that many organizations may not know how to request.

“Many organizations earnestly believe that analytics can deliver great value by going above and beyond functional walls to illuminate previously unseen improvement opportunities.

However, they struggle with embedding analytics into existing roles and responsibilities; determining how to organize their delivery capabilities; and in getting business leaders to embrace what could potentially be an uncomfortable set of conversations.”

Sarkissian points to the “innate objectivity of data” to explain the hesitance to acting on the insights gleaned from data. Replacing human knowledge with analytical data may “inadvertently suggest” a shift in power from managers with budget accountability to statisticians who have none.

“In the worse case scenario, if the “cold hard facts” run counter to experience or fail to deliver the promised results, the reputational damage may gravely impair the organization’s ability to embrace analytics.”

The Deloitte report offers these principles that can help lower the barriers between those using data to find answers and those responsible for taking action:

  1. “Accept that analytics can be a threat to those who must embrace it. Engage with decision-makers and leverage their experience and knowledge to help produce more valuable insights versus scanning data and generating “fact-based” conclusions.”
  2. “Consider the long-term impact both upon the entire organization and upon individual roles as the focus of power shifts from experience and knowledge to data and facts. This has the potential to invert the typical hierarchical structure, essentially turning the organization upside down, where younger personnel drive decisions and more-experienced employees implement the insights.”

In the end, Sarkissian said, organizations should create environments where “analytics is perceived as an opportunity to support people, and not as a threat to the status quo.”

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