Companies live or die based on their data. It’s a big statement, but it’s true. Despite this, it still amazes me how fast and loose some are willing to play with their intellectual property.
Try this for a thought experiment: pick a company. Any company will do, the only rule is that it needs to be in the private sector.
Picture yourself going in and telling the board that even though they may have significant investments, a diverse portfolio, a great business model, and a strong leadership team, their company lives or dies based on its data.
Most executives will smile and nod. They won’t believe you. They’ll probably try and move on so they can focus on the ‘important’ stuff.
Now imagine deleting their customer billing records.
All of a sudden that statement doesn’t look so far-fetched, does it?
Take away data and almost everyone would go out of business overnight. If you misuse data in the public sector, you can probably look forward to rather short career.
The world is changing. Competitive advantage used to come almost exclusively through product or price differentiation. Today, it’s all about relevancy and understanding. People expect more than just product or price; they want a positive experience, ecosystem, and brand association. The only way to make that happen is through understanding your customers and acting on it. And without data, that’s impossible.
Business analytics is one the biggest differentiators around. It drives cost efficiencies as well as quality improvements. If you treat everyone exactly the same, you’ll probably get a pretty poor result. The only way to increase offer relevancy and treatment effectiveness is through better understanding. The only way to build that understanding is through analysing data.
Some organisations are fortunate: they already have these skills. Realistically though, most aren’t so lucky. And it’s only becoming harder to hire the right skills.
The almost unanimous consensus is that we’re barreling headfirst into one of the tightest labour markets in business analytics. Gartner has estimated that of the 4.4 million jobs that will exist in business analytics over the next five years, less than a third will be filled.
Given this, it seems to make sense to use contractors and consultants. And, in many cases it does; specialist skills can be hard to source and developing new skills takes time. However, it’s essential to always remember the importance of developing and re-using competencies created through a business analytics project.
Business analytics is linked to competitive advantage. Relying on someone else to create differentiation without a plan to internalise that capability is rarely a recipe for sustainable competitive advantage.
Tightening labour markets will inevitably force some interesting changes in partnering, delivery, and maintenance models. However, one thing won’t change: the importance of having a plan to build maturity in business analytics.
Those that don’t will see their advantages appear and disappear as fast as they change providers. If you can buy it, build it, or make it happen without real pain, it isn’t a differentiator. You’re just doing exactly the same thing as everyone else.
Evan Stubbs is the author of The Value of Business Analytics, a book that explains why teams fail or succeed. His most recent book, Delivering Business Analytics explains the link between business analytics and competitive advantage, outlines the Data Scientist’s Code (a series of management principles that move organisations towards best practice), and provides solutions to twenty-four common business analytics problems.