• Analytics
  • McKinsey & Co.

Mobilizing the C-Suite for Big-Data Analytics

Leadership-capacity constraints are undermining many companies’ efforts. New management structures can be part of the solution.

When central data assets are key
At many consumer-services businesses, exploiting analytics involves combining transaction data across a number of businesses or channels. That approach allows these companies to shape insights such as how consumers engage with web sites or decide between shopping online or in stores. These companies often have (or are building) new central data warehouses or data environments, as well as related data-management capabilities. In addition, they often are working through new rules of the road on issues such as how they can access data while protecting consumer privacy or ensure that key customers aren’t hassled by unnecessary contacts.

In such cases, an enhanced role for the CIO — spearheading the development of the data-analytics strategy and talent building — is a popular path. Operationally, the CIO takes charge of efforts to develop the data and analytics infrastructure while letting the business units mobilize change aimed at exploiting it.

At one multibusiness consumer-services company, for instance, the board and senior-leadership team recognized that a significant step-up in performance could be achieved if it fully exploited analytics opportunities across business lines by harnessing its multichannel databases. Recognizing the overarching role that the central databases play in the company’s agenda, the leadership designated the chief information officer to direct the effort and to define the data and analytics strategy.

The leaders realized that each business unit, by necessity, would have its own targeted analytic priorities, such as strengthening promotional offers or optimizing inventory levels. Moreover, a different group of managers would be applying the insights across business units. The leadership concluded that under these circumstances, managing analysis and frontline training from the center would be a mistake and decided instead that the CIO should partner with business-unit leaders, sharing with them a tiered set of responsibilities.

At present, the CIO is immersed in two key projects. The first is creating a new infrastructure that unites the company’s multichannel transaction data with external social-media and competitive information and delivers the result to business units through an intuitive interface. The second involves building up analytics expertise that can be assigned to different business units but managed centrally, at least for the next couple of years as the effort gains critical mass. The analytics team is led by a deeply experienced executive who reports to the CIO and provides a crucial injection of top-management capacity. In parallel, business-unit leaders are hammering out analytics priorities and building the skills of frontline managers who will use new models to, for example, redirect spending across media channels.

When substantial internal analytics expertise is core to performance
We are also seeing a second approach, which shares some of the centralized aspects we touched on above but specifically involves companies that decide to build rather than outsource a critical body of advanced analytics expertise. That decision often leads organizations to locate the expertise centrally, where it serves as a common platform for creating value across business units.

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