Every executive should be able to justify the cost and demonstrate the business value of their initiatives, including data and analytics (D&A) leaders. This becomes even more critical as IT budgets tighten and CIOs are under greater pressure to demonstrate return on investment from IT initiatives.
The key for chief data & analytics officers (CDAOs) is to show how their D&A initiatives contribute to, and deliver value for, business strategy. Vague statements about D&A driving more effective business decision making won’t be enough. Explicitly develop the value story or thinking, and follow the SMART approach, where business benefits are specific, measurable, achievable, relevant and time-bound.
To impact stakeholders, you must identify and communicate the desired business outcomes and the personal impacts on the stakeholders you’re targeting. A six-step approach can help secure business leader buy-in for D&A strategies.
Step 1. Set a strong vision that resonates with stakeholders
The D&A vision and value should be from the perspective of the stakeholders. Set a positive and compelling view of the desired end state that will resonate with the engaged group. Focus on the business impact and outcomes arising from an analytic approach, rather than any project deliverables, outputs or tasks.
Consider both better corporate outcomes and personal/professional outcomes. The former could be increased revenue, market share growth, reductions in wastage or mitigation of risk impacts; the latter might be improved reputational status with peers, support for a desired promotion, a financial bonus, job satisfaction or even an easier life.
Step 2. Be candid in calling out inhibitors
Explicitly identify inhibitors, challenges, problems or risks of D&A initiatives. For example, incumbent technical staff may want to protect their positions, limited availability of skilled staff may inhibit the ability to execute, or there could be power struggles over who owns the budget for D&A initiatives. Present the resulting impact of these challenges and propose remedial actions.
For example, where a short supply of skilled staff may inhibit the ability to execute, you could replace the existing team with new resources who have the requisite technical skills but lose institutional knowledge in the process — creating an atmosphere of uncertainty and mistrust. The remedial actions could be to train the current team on new technologies before deployment, and involve business and technical team members in the selection and deployment processes.
Step 3. Propose a solution tracing data back to business outcomes
Solution architectures are vital to delivery teams as practitioners. However, solution designs seldom articulate anything about the business questions that can be answered using the data, or the business actions and measurable outcomes that can be anticipated — which risks losing the attention of business stakeholders.
The solution blueprint for the D&A business case must offer a more consumable view that engages stakeholder attention and also helps educate about the overall solution approach — a “marketecture” view combining marketing and architectural perspectives that still captures the overall information supply chain in terms that matter to business stakeholders.
Think, for example, in terms of:
Expected business outcomes (what benefit will accrue as a result of taking action?)
Resulting business actions (what will someone do differently as a result of being able to answer their question?)
Data inputs, such as source data and the respective business applications (what data will the business community access to answer the key business questions?)
Step 4. Present the D&A delivery roadmap in business terms
Detailed delivery plans and schedules, including all tasks, activities and interdependencies, are critical for the delivery team, but business executives need a simplified view of the roadmap timeline. Show deliverables that need to occur over time to achieve the future state in a way that enables executives to clearly understand the things that really matter to them, such as:
What will I get?
When will I get it?
What impact will it have on me?
Step 5. Illustrate a cost-benefit analysis summary within the overall business initiative
As noted, anticipated benefits must be tangible, quantifiable and desirable to the stakeholders, with the causal contributions of D&A clearly identified. In selling the business case for D&A, the initial investment and ongoing support costs (total cost of ownership [TCO]) must be justifiable in terms of the expected ROI.
Specific financial methodologies for calculating ROI versus TCO vary, but some key principles include:
Tying ROI back to the aspirational vision/outcomes and key benefits of the original vision established in Step 1.
Be forward-thinking and future-oriented, and show a net-positive financial return across the initiative.
Remember line-of-business stakeholders will typically desire business benefits to accrue as improved business effectiveness, while CFOs and CIOs may seek efficiency dividends or risk mitigation.
Some organizations, such as government agencies and not-for-profit entities, may have nonfinancial benefits as their main drivers, but nonfinancial benefits should still be SMART.
Step 6. Take immediate next actions to kick-start the D&A initiative
State the immediate next actions that you will take to get things moving in practice. This also generates the final impetus for selling the D&A business case to stakeholders. Next actions are framed in terms of what will happen next, who will do it, when it will be done and why it is necessary.
Create an articulated statement of intent in unequivocal terms. This is not asking for permission. It is an “assumptive close” to take control of the decision process and drive toward a conclusion. Also embrace responsibility, showing confident and purposeful intention that the CDAO is in control of the overall plan.
Alan Duncan is Distinguished Vice President at Gartner, Inc. where he provides thought leadership on the business value of data and analytics. Gartner analysts will provide additional analysis on the acceleration of data and analytics at Gartner Data & Analytics Summit, taking place March 20-22 in Orlando, FL.
The post Analyst insights: 6 Ways to Secure Business Support for Data and Analytics first appeared on IT World Canada.