Companies Using Predictive Analytics | Data Science Dojo Blog

datasciencedojo · February 20, 2019, 4:35pm

Predictive Analytics: So what?

Chief data officers are rising to the leadership of business analytics programs in the UK and US more quickly than expected, according to an Accenture study that surveyed the field for the first time since 2009.

The survey of 600 executives – 300 in the UK and 300 in the US – disclosed that 66% of responding companies using predictive analytics have appointed senior figures, often called chief data officers (CDOs), in the past 18 months. Moreover, 71% of the organisations that have not yet appointed a senior figure responsible data management strategies and policies expect to do so soon.

“The speed of this development is a little surprising,” said Nick Millman, digital, data and analytics lead at Accenture for UK and Ireland.

The UK is ahead of the US in the appointment of CDOs, 69% as against 64%. However, 74% of US respondents said their senior leadership demonstrates a commitment to data analytics as the basis of decision-making, while the corresponding figure for the UK is 57%.

Millman said he expected the figure for active CDOs to be higher in two to three years’ time. Chief data officers have responsibility for data as an asset across the enterprise, he added, and so cannot operate on behalf of any particular function, such as finance or IT, which is still the realm of the CIO.

Predictive Analytics for Decision-Making

The research study, Analytics in action – Breakthroughs and barriers on the journey to ROI, is based on telephone interviews, in August and September 2012, with 600 executives at 600 private and public sector organisations with more than 1,000 employees.

“Organizations are progressing in the adoption of analytics for decision-making … [but] there is still a prevalent disconnect between analytics capabilities organisations have built and how successfully they put them to use for business decision-making,” the study found.

Millman confirmed that Accenture, both in the survey and in its practice, uses a “really broad definition of analytics as data use to generate insight which leads to action that delivers business value. So, data governance and management, say, are included in that. That’s how we operate as a business, too.”

Analytical Capabilities Need Improvement

Just over one-fifth of survey respondents (22%) said they are “very satisfied” with business outcomes driven by their analytics investments to date. This leaves 78% which are not. Some 39% stated that their data is relevant to their business strategies, and 50% said their data is consistent, accurate, formatted and complete.

A combined 45% of respondents described their analytical capabilities as either in need of improvement, limited, lacking senior management support or piecemeal. Another 20% of organisations stated they have the required technical and human resources to apply analytics regularly with some success, but that the focus tends to be tactical rather than strategic. Only 21% of respondents said they routinely use analytics very successfully as part of an integrated enterprise-wide approach.

In a statement about the research, the firm said: “Despite progress in building analytics capabilities, senior executives still rank intuition and experience over facts and complex data analysis in the decision-making process.”

The pendulum is swinging from gut feel to data, said Millman, but it is moving slowly. “There is a spectrum from repeatable business decisions, such as determining the probability of a fraudulent insurance claim, to which organisation to acquire or merge with. The pendulum will not reach the really big, one-off strategic decisions,” he said.

Other Survey Findings

68% say their senior management is “highly” or “totally” committed to analytics and fact-based decision-making.
69% use analytics to drive decision making in customer acquisition and retention; 66% in the development of new products and services; 60% to improve the customer experience.
Respondents from all surveyed industries except Financial Services believe the finance department has the most sophisticated use of analytics.
Click here for survey infographic

Nevertheless, Millman said the tripling of the use of analytics as a predictive tool, from 12% in 2009 to 33% in 2012, was impressive: “There has been a reasonable shift from gut feel to data [as a basis of decision-making], and that will accelerate. Also from backward-looking BI [business intelligence] reporting to predictive analytics, using statistical modelling, and other, tools.”

Data skills in Short Supply

According to a report summary,

“An analytics capability gap is a recurrent theme of the survey findings, with companies scouring the globe to source the analytics talent they know they lack”.

Millman said there is no simple answer to plugging the skills gap, and that building, buying or partnering all have a role to play. “Our advice is to think holistically about what you will be doing in three to five years’ time, and work back from that to determine what type of investment you need to make,” he said.

The Takeaway

“If you have strength in analytics already, then build; if not, then you could outsource to a partner. It is hard to outsource data stewardship; but you could get BI reporting or analytical modelling outputs back as a service.”

The report summary stated that emerging economies are producing science, technology, engineering and mathematics (STEM) talent in far greater numbers, but pointed out that it would not be enough to meet the likely demand for these skills.

The skills gaps are in data science and big data architecture, confirmed Millman.

Shared from Computer Weekly