Research by Accenture, which offers consulting and strategy advice, revealed that nearly 95 per cent of high-performing companies say they are making better decisions through using data analytics -- double the rate of their low performing peers.
High performing firms are also four times more likely to report receiving a significant return on data analytics investment, says Accenture.
What distinguishes those who deliver ongoing, above-average business and analytics performance is that they do data analytics differently, it says.
Accenture NZ country managing director Justin Gray says data analytics has become a bit of a business buzzword, with the focus going on the technology that underpins it, but only when it is embedded seamlessly into the organisation does it deliver on the promise.
"Analytics is the tool that can give you the answers, but the value is only delivered by taking action on those answers," says Gray.
It's an end-to-end process that begins with a question, he says.
Good data is necessary to unpack the question, but most organisations have no shortage of data, Gray says.
"For all intents and purposes, data storage is essentially free.
"What it means is everyone holds on to mountains of information."
As well, more information is being shared across ecosystems, by governments and by enterprises, he says. On top of that are the technological tools with the grunt to run statistical models against the data.
But too often the focus is on the data science and the tools, says Gray.
"Organisations end up with this dark room in the corner where there are these people, these guys and girls, churning through this data.
"They're finding interesting things out and occasionally they open the door and throw something interesting out and someone picks it up and says 'that's really interesting' but they don't know what to do with it."
For all intents and purposes, data storage is essentially free.
Gray says organisations need to design analytics in the same manner as they set out strategy and processes, in order to ensure it's embedded into everything they do.
"The way I think about it is the Siri of your business problems.
"When it becomes as seamless as asking Siri a question and a whole lot of interesting stuff happens in the background, but you get an insight back that lets you go do something, that's the level that it needs to get to in terms of getting embedded in the process.
"It's not that it's invisible; it's seamless."
Information is always important at executive level, but the real power of analytics is unlocked when information is in the hands of people who are answering everyday problems for customers or citizens, says Gray.
He gives the example of a social services organisation.
Analytics can provide invaluable insights into trends for policy staff, but at street level a social worker can use tools grounded in analytical modelling to identify and support decisions about an at-risk child.
"That's where you get your most power because you can amplify that across all situations where that analytics insight is delivered at the right time to take an action that lets you change the outcome for a citizen or a customer.
Analytics doesn't take intuition and experience out of the picture, but done well, it provides timely insights to support decision makers.
The way I think about it is the Siri of your business problems.
One thing holding back analytics is a shortage of data scientists.
New Zealand punches above its weight in the development of skills, says Gray, with one of the leading analytics software languages developed locally at the University of Auckland, but there still aren't enough data scientists to go around.
That shortage means partnerships have developed across sectors, providing powerful outcomes for those involved, he says. It's also given rise to organisations creating products from the data they hold and analyse.
He says the Qrious Voyager is a local example, analysing the movements of tourists around New Zealand in a non-identifiable, aggregated way to help the likes of local councils and tourism organisations plan everything from infrastructure spending to new tourism services.
For these organisations it's a cost-effective way to power up decision-making with analytics.
Best strategy: Get started
Accenture's Duane Fernandes says that to understand whether your organisation is getting the best from analytics, ask yourself two questions:
• Do you think you are making better decisions through data analytics?
• Are you seeing the return on investment in analytics?
He says the answers will provide the yardstick to compare with high performing companies.
And his advice is to start right away on the road to improvement.
"The way people used to do business intelligence in the old world was to build this massive data warehouse somewhere and get all of your data in there, wait for it to be perfect and then start analysing it," says Fernandes.
"That actually led to a lot of disappointment.
"The way the technology has evolved and the way the economics of it has evolved is you don't need to go through that process anymore."
The workflow trends shaping software development are also happening in analytics.
Short sprints of data analysis -- anything from a day up to two weeks -- are a way to gain insights, then drive the next question, Fernandes says.
"Analytics is not a replacement for good business strategy either," says Accenture's Justin Gray.
"It's always going to be something that can be a capability and tool that can help validate, steer, direct and fine tune a business strategy, but you still have to start with the fundamentals of your business and what question you want to answer and analytics will help you on that journey."
