February 21, 2020
The business sides of organizations today are recognizing the importance and value of data and analytics in competing in today’s market, but they feel like IT organizations have not stepped up to the task of providing what’s needed to put data and analytics to work.
That’s one of the primary conclusions of a new report from The Hackett Group that examined priorities at organizations in 2020. There’s a level of dissatisfaction with what organizations are getting in terms of data and analytics from their IT organizations. There’s a gap between what’s expected and what’s being delivered. But is that really IT’s fault?
The Hackett Group study surveyed 200 leaders in several key areas within organizations, including IT, HR, finance, operations, and global business services. What it found was that those leaders in non-IT functions believed that although the business had invested a lot in data and analytics, the IT organization had not provided the value that should come from those investments.
More than half of study respondents said that advanced analytics initiatives have fallen short of their expectations of benefits, and half reported the same letdown for data visualization. The report found that only chatbots have been a bigger disappointment among digital initiatives. The research recommends that IT bring greater urgency to improvements in these areas or risk an escalating criticism from corporate leadership.
Michael Spires, technology transformation principal and practice leader at The Hackett Group, broke down the disconnect between IT and everybody else for InformationWeek.
As with so many technology problems, it’s actually a cultural problem, he said.
“We believe that this is not just an IT function but a joint function between IT and the business," he said. IT manages the data and provides the tools, but the business side often runs different business processes and produces data in different systems. When you have different business units managing differently and different geographies managing differently, it's very hard to normalize the data.
"You are going to struggle as an IT organization to manage that data effectively," Spires said.
The Hackett Group study, which is due to be released at the end of February, identifies analytics as one of the largest growth areas for organizations, but also one of the biggest weaknesses.
While analytics and data visualization have the largest deployment growth projections for 2020, they are also what Hackett Group calls "critical development areas" or areas where IT doesn't have the capabilities it needs.
"As a result, advanced analytics implementations have been disappointing, and it will be particularly challenging for IT to turn this around quickly," said Rick Pastore, senior director and IT research advisor.
A matter of empowerment?
Spires said that in many organizations IT was never empowered to take control to move data and analytics to where it needs to be, but now the business is demanding results.
The fix for this problem isn't an easy one. You can't buy a new tool that will quickly deliver the value that your business expects from its data and analytics investments.
Part of the problem is actually too many tools. Organizations that have grown by acquisition over the years may be using a multitude of different tools, and there is no centralized data management and data governance. Organizations like this must simplify their toolsets, according to Spires.
"We very highly link complexity with cost and slowness to market both from a technology perspective as well as from a business process perspective," Spires said. He believes industry may be at a tipping point right now in terms of consolidating and simplifying so many tools after years of acquisitions.
But perhaps the more difficult and essential change needed is the cultural one. The business groups and IT organization need to change how they work together. Rather than being a service organization, IT needs to become a business partner to each group, advising and collaborating with the them.
"The order-taker IT organization is dying," Spires said. Organizations that successfully leverage data and analytics will look a little different. "The business doesn't understand the technology well enough to optimize the solutions. IT can't lead them, but IT needs to come to the table with ideas, as opposed to solutions."
Getting from where we are now to where we need to be won't happen overnight, according to Spires, but that doesn't mean that you can put off results until you complete your multi-year plan.
"In my experience, you can't come up with this 3-year data plan to fix data and analytics because the business will lose patience," he said. "You need a plan that delivers value for each quarter, each step of the way between now and your target date. And you need to report on the deliverables each quarter."
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