Market Pulse

Enabling the
Analytic Organization
IT executives must enable a culture of data analytics to
remain relevant in the emerging business environment

Background That definition of data driven is probably miscon-

Data is todays most effective competitive weapon.
But how does an organization make the best use of the
business data it gathers and generates? And what is ITs
role in that best-use scenario?
Those are the questions analytics vendor SAS and tech
media firm IDG set out to explore in a recent survey of
IT management. They asked IT leaders across industries
about their companies use of data analytics and their
involvement in it, including organizational structure,
processes, and strategies. The results spell out a clear
divide between truly data-oriented companies that
approach analytics with eyes wide open and results in
mindand those that dont.
Based on ad hoc comments added to the end of the
survey by anonymous authors, there are many opinions
on the play of forces at work in the emerging analytic
culture. Business drives; IT supports, wrote one IT leader.
Its their data, wrote another. Analysis should be done
by IT, wrote a third, capturing both the pride and the
antagonism inherent in this complicated technology-
driven business trend.
Data Definition
The first and most obvious question concerns the role
that data plays in an organization. In that respect, its
encouraging to note that almost half of IT executives
(48%) consider their organizations to be highly data
driven. However, its worth enquiring into how those
survey respondents are defining that term.
strued in a lot of ways, says Renee Nocker, Director,
Technology Marketing with SAS. Nocker, former IT
director of Kimberly-Clark, points out that a lot of
organizations use reports and after-the-fact tracking
to judge past actions and accomplishments. To be
highly data driven, though, with all the attendant
advantages, businesses need to use all the data
resources they have available, including unstructured
data, to optimize their processes with an eye to the
future. If they think theyre data driven and theyre
looking in the rearview mirror at what happened,
thats not a positive game changer, she says.
Its also true that certain vertical industries are associ-
ated automatically with the data-driven concept, such
as financial firms and government agencies. And the
opposite is equally truethere are industries and orga-
nizations not traditionally thought of in terms of sophis-
ticated data analysis. Reality, though, is a lot simpler,
says Thornton May, futurist and Executive Director of
the IT Leadership Academy. High-performing organiza-
tions are highly data driven, he says.
For instance, some argue that manufacturing does not
lend itself to the highly data-driven organization, that
you dont see exemplars of analytics in manufacturing.
Not true, May says. Just look at what happened at GM.
Their whole walk-back from the abyss was due to the
companys embrace of analytics capabilities, in partic-
ular in connection with customer data, he points out.
So, while some vertical markets have more potential
for creating value by fully embracing the wonders that
are analytics, says May, there are no vertical markets
that cant be improved by embracing analytics.

Methodology:
SAS and IDG asked senior IT decision-makers across industries
about their companies use of data analytics and their involve-
ment in it, including organizational structure, processes and
strategies. The survey was conducted online between July 11,
2011 and July 18, 2011, among members of the CIO Forum on
LinkedIn. Results are based on a total of 150 responses.
 2 >> Enabling the A nalytic Organi z ati o n
Market Pulse

The Collaboration Imperative When asked how they would best enable an analytic
organization, almost half of IT leaders (47%) say that
Business data, by definition, encompasses the entire
analytic IT initiatives should be driven by the business
enterprise, from internal processes to external
side, which would build the case for the initiative then
partners. That suggests the analytical operation is a
seek the support of IT. More than a third of respondents
shared responsibility. However, data is the ocean in
(34%) describe that as being the case in their organiza-
which IT swims, so its not surprising that some IT
tionshigher in data-driven organizations (43%).
personnel feel proprietary when it comes to data-
driven operations. IT is the base for analytics,
commented one IT leader.
Decentralized Skills
That is not necessarily the consensus. Whether
As far as the skills related to data analysis, they are
intuitively or through experience, most IT managers
decentralized in a significant way. Data aggregation
seem to understand that business analytics is most
and data reporting skills reside mostly within the IT
effective when it is a cooperative, collaborative
organization, IT managers report, while data analysis
endeavor between IT and business. Unfortunately, that
skills reside mostly within the lines of business, which
understanding is more honored in the breach than in
is especially true at large companies (1,000-plus
the observance.
employees).
While three-quarters of survey respondents believe IT
Thats significant because it reflects tradition. Data
and business should have equal ownership of analytics
aggregation and reporting, historically, are areas of IT
projects, only 39% say that situation actually exists in
expertise, while analysis is a business function. But
their organizations. Its noteworthy, though, that this
history is rarely the best guide to creating a forward-
situation is significantly more likely to be the case at
looking operation. There are more appropriate, more
highly data driven companies versus those that dont
effective organizational structures, according to futurist
identify themselves as such (51% versus 3%).
May, such as an analytic community, which could
Still, despite their collaborative leanings, many IT bring together expertise from various departments
managers look to the business side of the operation around the organization into an agile analytic crew
to prime the analytics pump. And while small groups charged with leveraging their analytic capabilities.
with big ambitions seem like an efficacious way to get
An interesting aspect to this discussion involves a
analytic projects on track, most IT leaders pooh-pooh
dilemma familiar to most IT veterans: How business
the idea.
savvy do IT professionals need to be? Two trends
make that question more relevant now than ever
before. First is the increasing tendency toward IT
becoming a service, which commoditizes traditional
How data driven is your organization? IT speeds-and-feeds skills. Second is the increasing
48% consider importance of data analytics, which turns something
their organizations to IT was used to treating like a commodity (as exempli-
40% be highly data driven fied by data aggregation and data reporting) into a
31% 29% valuable corporate asset, one that demands a new
30%
mindset and approach.

20% 19% 19% Those two leading indicators should be red flags to
ambitious IT pros, says May. For one thing, there are
10% groups out there celebrating the analyst and misrep-
1% resenting IT people as hod-carrying pipe-fitters, he
0%
says. That characterization may not be far off if those
Not at all (2) (3) (4) Thoroughly
data driven data driven IT people are simply interested in technology infra-
(1) (5) structure issues, such as cost cutting and keeping the
e-mail flowing, May points out. Thats why IT pros need
Base: 150 qualified respondents
3 >> Enabling the A nalytic Organi z ati o n
to increase their relevance by augmenting technology
savvy with business smarts. You have to understand
how your organization creates value, May says.
Committed to Analytics
Though they would rather that analytic initiatives
originate on the business side of operations, the fact
is that executive IT management are the ones most
deeply involved in promoting or encouraging the use
of analytic capabilities, according to survey respon-
dents. Line-of-business managers are the second most
committed group, while executive business manage-
ment comes in third.
Its perhaps not surprising that IT executives are so
committed to the use and success of data analytics,
says futurist May. Thats because IT understands their
future is a function of embracing and operationalizing
analytical projects, he says. Also, IT is in the unique
position to understand and articulate the organization-
wide advantages of the analytics function. IT has the
fodder to build the business case that this [analytics
Ideal vs. Actual Scenario Regarding
How IT Initiatives Should be Driven in
Enabling an Analytic Organization
Driven by the business (Business
builds the case for why analytics
initiatives are necessary and seeks 34%
IT support as needed)
Driven from the top down (top-level
executives mandate analytics initiatives,
and some type of collaboration or center 28%
of excellence is formed representing 12%
both IT and the business)
Driven from the bottom up (ad hoc IT
and business group builds a business 17%
case, garners a few quick wins, and the 23%
initiative gains traction)
Driven by IT (IT builds the business
case for why analytics initiatives 4%
are necessary and seeks support 17%
to get started)
4% Ideal way IT initiatives
Other scenario should be driven in
8% enabling an analytic
organization
Analytics is not a high enough priority 1%
to warrant any of these approaches 7% How IT initiatives are
currently driven
Base: 150 qualified respondents
Market Pulse
project] needs to be an enterprise environment, says
SAS Nocker.
Its a little harder to understand why executive busi-
ness management scores so low, relatively, in terms
of commitment to analytics. Especially since business
execs at highly data-driven companies are significantly
more likely to be deeply involved in the use of analytic
capabilities, according to survey respondents.
The dichotomy between business and IT often mani-
fests itself in corporate culture, meaning how closely
integrated the IT function is into the decision-making
processor not. Indeed, only 59% of IT executives
say that decision makers at their companies rely
on IT to provide the information they need to make
strategic decisions.
Data itself may be the keythat is, trust in data
versus trust in business savvy, experience, intuition.
In many companies, it seems, trust in data is lacking.
Less than half (46%) of IT executives feel the decision
makers at their companies make good use of the
information resources available to them for setting
company strategy.
Not surprisingly, those organizations that indicate
analytics projects are owned equally by business and IT
are the most likely to report that their decision-makers
make good use of available information resources.
Guts and Glory
47%
Of course, no company would embrace decision-
making based on data at the expense of business
savvy or experience completely. But what is the right
equation?
Not the status quo, according to many survey respon-
dents. Executive business management overrides
data-based decisions with ones that are based on
human judgment or intuition occasionally according
to more than half of IT executives (53%), and
frequently according to almost a third (31%). Such
gut decision making over data-based formulations
also comes from line of business management occa-
sionally, according to 45% of IT execs, and frequently,
according to 24%.
Its hard to avoid a platitude at this point: You reap
what you sow. Or, as one IT leader commented: Busi-
4 >> Enabling the A nalytic Organi z ati o n
The way organizations
leverage data from its Top 2 Box Strongly
analytics initiatives Rating agree
Data is descriptive and used to report on
past performance 83% 44%
Data is used to dynamically align the
organization to current market conditions 54% 21%
Data is used to proactively anticipate market
demands fueling growth and innovation 50% 20%
Base: 150 qualified respondents
ness decisions made without the benefit of supporting
data are decisions made over and over again.
Along with business roles and technology expertise,
tradition affects the emerging culture of analytics in
another way: most companies still use business data
to look backward. Yet, there are encouraging signs
that more companies are embracing the future-
oriented problem-solving nature of analytics.
As suspected by SAS Nocker, the most common way
businesses leverage data is historical. A majority of
respondents (83%) say their organizations view busi-
ness data as descriptive and they use it to report
on past performance.
At the same time, though, more than half (54%) of IT
executives say their organizations use business data
to attempt to address current market conditions,
and fully half use it to look forwardto proactively
anticipate market demands. It is crucial to note (and
as might be expected) that those organizations that
say analytics projects are owned equally by busi-
ness and IT are significantly more likely to use data
to address current competitive advantage or future
direction. This is key because it demonstrates the
business value of an analytics-oriented organization.
Future Shock
Data is the competitive weapon of the future. Those
organizations that learn how to exploit their data
resources effectively will give themselves the greatest
chance for success. The ability to exploit data in that
Market Pulse
Neither
Somewhat agree or Somewhat Strongly
agree disagree disagree disagree
39% 11% 6%
33% 19% 18% 9%
30% 18% 19% 13%
forward-looking way can only be achieved through the
best use of analytics.
Its not necessarily an easy sell. Such an ambitious
data mandate must ripple through the organiza-
tion, embraced especially by upper management in
a meaningful and actionable way. The number one
criteria of a data-centric organization is the desire to
know, says futurist May. Its an organization where
senior management is asking questionsnot just
operating but asking questions.
IT is already involved in analytics in several ways:
as supporter, as instructor, even as proselytizer.
But IT must become more involved. Ownership of
analytic projects is a way for IT to assert business
savvy and engagement.
IT needs to find an area where there is business
value that is easy to demonstrate, says SAS Nocker,
find that project that will drive significant value and
deliver quickly to demonstrate the possible game
changers that business analytics can enable. Once
its been proven one time, the need to use analytics
can become viral in a culture. Or as one IT leader
commented: Quick wins enlighten business leaders
as to the advantages of analytics.
Analytics will enable committed business organiza-
tions to embrace their competitive future. It also will
enable the IT organization to embrace its emerging
business role.
Visit SAS Business Analytics Knowledge Exchange:
www.sas.com/ba-ITleadership