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Quality data trumps intuition

“But my boss doesn’t pay attention to what the data says!” Is that a common phrase you cite in your head? It’s certainly what I’m hearing at recent conferences, as touched on in a recent blog post. This from the white paper, Getting your Money’s Worth with Analytics, will uncover some reasons executives rely more on gut instinct that facts. Based on research conducted by the Accenture SAS Analytics Group among 258 business professionals, the paper explores the effectiveness of business analytics.

Intuition is seldom, if ever, as good as cold, hard facts, but some still cling to the idea that intuition and experience are more important than data. Some of the specific comments respondents made about intuition overriding analytics include:

  • “Data is not available or data integrity is questionable, resulting in a fallback position of relying on intuition.”
  • “Data is not strong enough to support analytics.”
  • “Don’t believe the data or don’t want to believe the data.”
  • “Not enough hard data available or data is not easily accessible and measurable.”
  • “Trust their gut more; [we] don’t trust the data.”

According to the survey, intuition trumps analytics in an average of 39 percent of business decisions. Survey participants provide two main reasons for tossing the results of analytics in favor of intuition. The first reason is a lack of confidence in the data. This mistrust of analytics due to data issues has merit. Economist Intelligence Unit recently published a study1   that cited data quality and accuracy as a key problem for nearly half of all companies. Without a foundation of accurate and reliable data, the results of analytics are obviously in question.

Most organizations have data located across a large number of heterogeneous data sources. These organizations are spending most of their time gathering and processing data and little time analyzing it. With an effective data management approach, organizations have their data in order and access is simplified so they can spend more time in analysis that could enable better decisions.

The second reason survey respondents gave for overriding analytics with intuition is the idea that “the executive knows best.” This executive instinct is sometimes a function of lack of understanding of analytics in general. Analytics advocates in the organization – those who have used analytics successfully and want to push for more fact-based decision making – clearly face challenges combatting the instinct of the experienced executive, particularly in organizations where the “bad data” card can also be played. Related comments from the survey:

  • “People often believe that their business experience trumps analytics. There’s a general lack of education in technical disciplines like statistics.”
  • “Long-term cultural framework, lack of education of executives, fear of mathematics.”
  • “Many senior executives grew up in the industry without analytics. Familiarizing them with the benefits is often a challenge.”
  • “Business decision makers do not always have knowledge of analytics.”
  • “Gut feelings of key senior executives who feel that their knowledge of or feelings about a given business situation should carry more weight than the analytically-based data to the contrary.”

Beyond the need for a cogent analytics strategy, data issues plague many organizations.

Data quality and access are key inhibitors in at least four in 10 organizations. Forty-two percent of respondents indicated that they are uncertain how to integrate analytic insights into their business decisions.

But it is the validation that analytics can provide that allows organizations to recognize hidden insights. Staples gained some unexpected insight when it turned to analytics to improve its business. It did this by examining data that had been ignored previously:

“Through Web analytics, we discovered certain Web pages that were cumbersome for users to read and navigate, resulting in a drop-off point for the consumer – so we optimized our Web pages, and it has made all the difference.”

During campaigns were customers shopping in stores, online, or both?

“The discovery we made is that we saw who purchased online versus in the store, but we couldn’t determine who went to the website and didn’t make a purchase. We were missing what was happening in the middle,” said James Foreman, Staples’ Director of Circulation and Analytics. “We turned to Web analytics to validate that we were getting a good response rate to the campaigns, but they weren’t turning into purchases. Through Web analytics, we discovered certain Web pages that were cumbersome for users to read and navigate, resulting in a drop-off point for the consumer – so we optimized our Web pages, and it has made all the difference.”

1Big Data: Harnessing a Game-Changing Asset, Economist Intelligence Unit, September 2011, sponsored by SAS.
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4 Comments

  1. Mike
    Posted July 26, 2012 at 2:47 am | Permalink

    You wrote…

    According to the survey, intuition trumps analytics

    Dont you mean…

    According to the survey, analytics trumps intuition.

    • Anna Brown, Editor
      Posted July 26, 2012 at 10:13 am | Permalink

      Mike – Thanks for reading! The survey revealed that executives indeed use intuition over analytics in 39 percent of the business decisions they make, citing that they lack confidence in the data and the idea that “the executive knows best” as two reasons for doing so. What is your view on the matter?

  2. Steve Ruta
    Posted September 13, 2012 at 5:10 pm | Permalink

    Can’t tell you how many times in industry that exhaustive analysis “wasn’t enough” to act on. One of these days organizations will overcome analysis paralysis.

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  1. [...] Anna Brown, Editor | Published: August 21, 2012 Tweet A few months ago, I shared some of the findings from a recent Accenture SAS Analytics Group research showing that intuition trumps analytics among [...]

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