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Analytics – Moving from Hindsight to Foresight

Lights

Published on November 9, 2016

Over the past several years, organizations have had an increased appetite for information. But not just any old historical information – information that can help to make timely, informed business decisions and provide real value to an organization. In the spectrum of hindsight - insight - foresight, the information we rely on often resides squarely within the hindsight category, leaving the insight and foresight components to individual interpretation and ‘gut feeling.’ Many organizations have survived and even flourished in this respect, but as technology, data and talent continue to expand and evolve, the competitive advantage continues to shift to those who know how to turn information into intelligence. Organizations that do this well are known as Insight Driven Organizations (IDOs). 

One of the big challenges in becoming an IDO is that a “one size fits all” model just doesn’t exist.  Being an IDO means getting the right insights to the right people at the right time and significantly depending on the people, processes, and structure of an organization.  Perhaps the most important element however, is that your IDO strategy is directly aligned with your organization’s strategic priorities providing focus and creating value where it matters most. 

Most conversations about becoming an IDO begin with one simple yet important question; how do we get started?

As with many things in life, it’s easy to jump to solutions before having a full understanding of the issues, but this can often lead to wasted time and money and frustration when progress and incremental value aren’t apparent. Buying a new system or tool or hiring a resource with a new skill-set within the organization are all potential elements of an effective IDO strategy, but when done outside the context of a cohesive strategy and roadmap for execution, they are not likely to be the silver bullet people expect . An effective IDO strategy contemplates the key components of People, Process, Technology and Data within the context of the organization’s overall strategy. The result is a plan that is focused and guided by a future state vision. Although this may sound daunting, we tend to look at the planning process in three simple steps: 1) assess the current state, 2) define the future state, and 3) develop the roadmap for execution. 

Current state assessment

Assessing the current state of an organization’s analytical capabilities is a foundational first step in the process for one simple reason – you can’t effectively plan a journey if you don’t know where you’re beginning.   From a strategy perspective it’s important to clarify the overall goals of the organization and the strategic priorities - short, medium and long-term. When assessing the value that analytics can provide it’s important to also ensure a sound understanding of the value drivers that support these initiatives.  Being an IDO is not about having information for the sake of having information; it’s about getting the right information to the right person at the right time to make informed and timely business decisions. Although the level of depth of understanding required will often vary depending on the size and structure of the organization, understanding the current data and technology landscape as well as the people and processes involved in key decision making, both the decision makers themselves and those who support their information needs, will also play a role in opportunity identification while providing the starting point for future plans and initiatives. 

The people element is quite often the most overlooked component as some view analytics as being IT driven, creating a disconnect between analytical insights and the decision making processes that drive business value. Being prudent in identifying key stakeholders and involving them in the process is often an effective way to ensure business needs are a key driver throughout the process and also plays an important role in the change management program in the roadmap execution stage.  An important element is understanding and documenting from those key stakeholders how they are currently accessing data, when or how often the data is being accessed, how it’s being used or for what purpose and for whom, what analysis is being performed on it and what outcome or insight is being obtained . Understanding these important aspects of the process are critical to developing an efficient and effective analytics plan that clearly addresses the needs of the users as well as those of the organization. A valued by-product from this exercise is the documentation of the process used by those key stakeholders so that the knowledge of how analytics are being performed and used resides within the organization rather than with a single employee.

Having now obtained an understanding of the current state of analytics, it may be time to consider the rapid development of proof-of-concept (PoC) projects, which can be a very effective early stage activity.  There are many benefits to these early PoCs by providing a means of helping to identify key analytics opportunities for the organization and making analytics less conceptual and more tangible for key stakeholders which helps to obtain the necessary support and buy-in.  It also uncovers key learnings to help inform the longer term analytics strategy and provides “quick wins” to demonstrate value and build momentum – while requiring only limited investments of time and money.  Lastly it helps to develop skills within your organization that can add credibility and experience when determining and planning larger future state projects as well as supporting the execution of your roadmap.

Future state defined

Once the current state is understood, with key value drivers known and opportunities identified, the next step is to identify a future state vision for analytics within the organization in light of the organization’s overall strategic priorities and goals.  Many people view “visions” as lacking any real substance, but in the context of becoming an IDO, it’s important to have a view of what the organization should and shouldn’t be when it comes to analytics.  It’s easy to say that you want to be best in class across the board and have all the capabilities and talent one could desire, but that would disregard the realities of time, effort and cost while also providing little guidance on the specific role analytics should play. As mentioned, analytics shouldn’t be viewed as being solely IT driven - solutions need to be supported by data and the right analytical capabilities, but they also need to be aligned with the organization’s strategy, embedded in the decision making process and delivered via an effective operating model. In the development of the future state vision, some things to consider would include the operating model (on a spectrum of dispersed to centralized capabilities), the core processes to both develop and communicate insights (question to insight to action), the talent model (combining business savvy with technical expertise), and the framework to validate, prioritize and monitor analytics-based projects.  The future state analytics vision should anticipate the future needs of the key stakeholders to support them in delivering on the strategic priorities and goals of the organization.

Roadmap for execution

Developing and executing a roadmap to become an IDO greatly depends on the information gathered and decisions made through the current state and future state exercises.    

In developing the roadmap, consider all the information derived from your current state assessment to help determine how to more effectively and efficiently derive value from your future analytics processes. When establishing your roadmap to the future state, consider ways to improve efficiency in terms of obtaining, using and interpreting data. For instance, consider how often data reports have to be created and how long it takes to run them. Consider where multiple people perform similar analytics or spend a significant time analyzing data. Consider how, when and how often people use analytics, the flexibility and agility required of the analytic, and where people are and what devices they are using when they want to make decisions using analytics. Another important factor to consider is how critical analytic is to your organization and how quickly you need to get from data to insight. By focusing on these and other considerations it can help determine where investments should to be made, either in IT systems, analytics tools and solutions or skills and capabilities, and also helps to build a thoughtful roadmap that can make real changes in an organization.

For most organizations, analytics is inherently “new” in some regards. It’s a new way for people to make decisions, it’s a new way to gather and analyze information, which often involves new technologies and processes. In other words, there is a great deal of learning and experimentation that goes into becoming an IDO. The roadmap should be flexible and adaptive; a document that should be updated when circumstances change. When executing the roadmap, never underestimate the importance of change management. When decision-makers and enablers alike are involved in every step of the process, provide their input and feedback and have visibility to the progress made and value generated with each passing milestone. The change is incremental and there’s a common understanding of what’s being done (and why) that eases any perceived burden of changing the status quo. Remember - becoming an IDO is about evolution, not revolution. The first few steps you take are often critical in gaining the buy-in, momentum and credibility for the value of analytics and thus PoCs or other early-stage activities should focus on asking and answering the right questions to drive business value, demonstrating a mix of clear monetary return (ROI) and a breadth of applications that are relevant to the organization’s priorities and involving key stakeholders that will help to champion future initiatives. Each entity’s roadmap will be unique depending on their current state and future state ambitions, but typically, will include planning and deploying an initial operating model. The model  defines the core processes (and related people, data and technology) to support early-stage opportunities, getting the required infrastructure in place and defining formal processes to validate the output, track uptake and usage and collect feedback to begin the ongoing improvement process.  

This is certainly not meant to be a prescriptive answer to the question of how to get started with analytics, but this approach has successfully helped other organizations transition analytics from a concept to a reality and provides very real business value in so doing. Although the journey can take many years, those with the right leadership and an organizational desire to improve can leverage this framework to help clarify the path forward and start reaping the rewards of being an Insight Driven Organization.

Stay tuned for the third and final part of our series on Analytics in the next publication of Financial Reporting Insights on [date]. In the meantime, we invite you to access additional details on the IDO framework and the path to becoming an insight-driven organization via the link below.   

http://www2.deloitte.com/ca/en/pages/deloitte-analytics/articles/becoming-an-insight-driven-organization.html

Please reach out to any of the contacts below with any questions or comments. We’d be happy to discuss how you can start your journey to becoming an Insight Driven Organization. 

Contacts

Mike Goodfellow Mike Goodfellow
Partner, National Leader - Audit & Advisory Finance Practice
Mike is the leader of the Finance Advisory practice in Canada and has over 17 years of experience primarily in the Canadian marketplace with a variety of small to large market companies in various industries including organizations in the public/private sector. Mike has also gained significant insights into business strategy, people/talent strategies, process improvements, analytics, and technology options, which enable him to help our clients reach their business objectives.
Jerome Townsend Jerome Townsend
Senior manager, Deloitte’s Audit - Public practice
Jerome has 10 years of experience serving public and private clients across a variety of industries. After helping to establish Deloitte’s internal Audit Analytics team, Jerome has held roles as a Lead Analytics Facilitator at the Deloitte Greenhouse in Toronto as well as leading our Finance Insights practice to help clients strategize, plan and execute on a variety of analytics-based initiatives.
Nicole Deschamps Nicole Deschamps
Senior manager, National Services - Innovation and Analytics and Member of the CPA Canada Audit Data Analytics Committee
Nicole has been in public accounting for 15 years, serving a wide variety of clients including both public and private, in the U.S. and Canada with a majority of clients operating in the manufacturing industry. Leveraging that experience, Nicole has led the Canadian Audit Innovation and Analytics team from the ground up. She is responsible for the development of innovations and analytics to be used by audit practitioners in the performance of audits.

 

 

 

 

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