San Francisco — Data analytics is en vogue among businesses lately, as companies try to derive more value from the vast amounts of data they have been collecting. But businesses must hire the right people before they can dig into that data, said Anne Robinson, Verizon Wireless’ director of supply chain strategy and analytics, during CFO’s Corporate Performance Management Conference on Wednesday. To do that, many of them will need to fundamentally alter their culture into one that puts analytics first.
“Basic analytics are table stakes now,” said Robinson, as she cautioned CFOs attending the conference to take their organizations beyond backward-facing “descriptive” analytics (the use of data to find out what happened in the past). Businesses that are serious about deriving value from analytics are moving on to “predictive” analytics that allow business leaders to more accurately forecast and plan for potential speed bumps, she said. And the most analytically mature companies are using “prescriptive” analytics, which involve the creation of customized optimization tools that, when given a current set of circumstances within one’s business, can prescribe the best course of action for the future.
“With these tools you’ll be able to come up with different policies that will allow you to achieve whatever the particular vision or goal is,” said Robinson, who also serves as president of the Institute for Operations Research and the Management Sciences (INFORMS), a society for professionals in the field of operations research, management science and business analytics.
But finding and hiring the analytical minds that will create such tools is a major obstacle, Robinson said. During the talk, she referenced a 2012 McKinsey study that predicted a 50 to 60 percent gap between the supply and demand of people with deep analytical talent to fulfill the needs of companies seeking to take on Big Data projects by 2018.
To lure the necessary talent, Robinson said, companies will have to make themselves attractive to data scientists. The CFO, she suggested, is in the position to take on executive sponsorship of advanced analytics initiatives. “Executive sponsorship is the No. 1 priority in making that leap from basic to advanced analytics,” she said.
The executive sponsor plays a major role in getting every facet of the company on board with advanced analytics initiatives, another key to success. “The organization needs to know this is something that’s going to be rewarding if they try adopting it,” Robinson said. “Getting people to trust the algorithm over one’s own experience and knowledge takes education, communication and visible leadership.”
And because analytics projects can be high-risk, high-reward investments, Robinson said, executive sponsors must be willing to provide air cover for data scientists if the investment doesn’t work out. They’ll want to know their jobs are secure.
Robinson concluded, “If your company is not seen as place with a career path for people with an analytics background, they’re not going to come to your door. Organizations can’t ignore [advanced analytics] because it’s going to take you to the next level. But you can’t do any of it in the absence of experts.”