In the midst of a crisis like the one so many organizations have faced in the past year, there can be a lot of information but no obvious choice about the best course of action. In cases like these, many enterprise executives will go with their gut feeling to make a decision about a situation. After all, the organization is paying for their expertise and judgment.
But as organizations have more data than ever before and tools to gain insights from that data, they are increasingly looking to become more "insight-driven" rather than relying on the gut feeling of one or two executives. Why not use a scientific analysis of the data to look at options and make the decisions? But although organizations recognize the value of this approach, they are not there yet, according to a couple of new reports from Forrester Research.
Fewer than half of decisions (49%) are made based on quantitative information and analysis versus "gut" feelings, according to Forrester, and that's a number that has essentially stayed the same for years. What's more, a closer look at practices across organizations shows that less than 10% of them are driven by insights.
Still, more organizations are working toward becoming more insights driven. For instance, 63% of organizations have appointed a chief data officer, according to Forrester.
That's just really the first step. Even organizations that have a CDO in place still face a long journey ahead. To be successful, the CDO has to juggle many different initiatives to take the company to a place where data regularly turns into value.
In its two reports covering CDO initiatives, author Forrester principal analyst Jennifer Belissent offers a number of best practices and recommendations for chief data officers looking to make their organizations more insight driven. The following are a few of those recommendations:
Prioritize projects based on strategic alignment and complexity. Forrester recommends mapping projects across two axes so you can visualize which ones are more straightforward and more impactful or are better aligned with the business goals. CDOs should also ensure that they reevaluate each project's prioritization as the market shifts.
Establish a mandate to drive the insights transformation with executive support. Forrester notes that 42% of CDOs report to the CEO. However, it's also important to get buy-in for the insights-driven way of doing business, which is a change from how many organizations have operated. If there's resistance from the top, then sometimes a groundswell of support from employees can help convert top executives. It's the CDO's job to develop the relationships that lead to this mandate.
Embark on a listening tour to understand the needs of business partners. When you talk to other executives in your organization, focus on what's important to them. Maybe it is identifying high-value customers, reducing costs, or optimizing resources. Don't lead off the conversation with data and technology requirements. "Finding projects that deliver a win for all involved builds support. Listening helps," Belissent writes in the report.
Establish a data insights council to facilitate collaboration and build consensus. Forrester recommends that CDOs be collaborates above all else in order to establish common foundations, prioritize projects and allocate resources. "Bringing key stakeholders together in a data insights council allows them to see things differently and gives them a role in building the framework for becoming insights driven," Belissent writes.
Deliver value quickly through iterative proofs of value. This is a big one. Forrester says that successful CDOs must demonstrate the value of applying data and analytics to specific business questions fast. If there aren't yet results, then the CDO should demonstrate the work in process instead. Showing results builds trust with stakeholders. One CDO quoted in the report noted that he did many "dog and pony shows" to demonstrate insights and how they provided incremental value. This takes the collaborative process one step further.
The two new reports written by Belissent are titled Chief Data Officers: Accelerate Insights-Driven Business Impact in 12 Steps, and Chief Data Officers: Evolve Your Teams to Accelerate Impact from Data Insights.
"Chief data officers and their teams wear many hats working across the data value chain," Belissent wrote. "They evangelize the use of data and analytics, drive data literacy, and help establish an insights-driven culture...But most of all they must balance innovation with the foundation required for execution, including the end-to-end processes and technology fabric."
For more on data, analytics, and AI, read these:
How Data, Analytics & AI Shaped 2020, and Will Impact 2021
A Question for 2021: Where’s My Data?
How to Create a Successful AI Program
Analytics Salaries Steady Amid COVID Crisis