As 2023 ushered in new economic volatility and market uncertainty, many leaders are seeking ways to drive profitability and value.
The good news is they may not have to look any further than the mirror.
As we’ve talked about before, third-party research indicates that analytically mature organizations outperform others in their industry across nearly every metric, including 3-year revenue and 5-year operating income.
Now, thanks to the Alteryx Analytics Maturity Assessment, we’re seeing data that shows how leaders can increase maturity to drive that value.
The findings? It starts with leaders.
Analytically Minded Leaders Are Essential for Analytics Maturity
Organizations with leaders actively engaged in developing analytics programs or setting analytics as a strategic imperative for business see higher analytics maturity scores.
As you can see from the box and whisker plot above, there’s a strong correlation between leaders prioritizing analytics and analytics maturity.
Unfortunately, it doesn’t appear many leaders are making analytics an imperative. Of the 216 respondents, only 22 percent of leaders are actively engaged in developing analytics plans and programs, and only 8 percent are actively engaged and treat analytics as a strategic imperative.
Worse, nearly half (47 percent) say that leaders are still discussing analytics’ importance without evidence of a plan or action.
As you can see from the chart above, the average analytics maturity score for organizations with leaders driving the change is nearly a point higher than those without plans. That extra point often places companies at stage 3, where organizations also start to see more value.
So, the question is, what should leaders do about it?
Accessing and Using Data Helps, But More Is Needed
The good news is that leaders have plenty of opportunities to shape the value they derive from initiatives.
The challenge is that they need to put plans into action.
In the past, it was simply enough to increase the ease of data access throughout a company. While that’s still one of the easiest ways to see a leap in analytics maturity and value, organizations need more to see increased maturity.
As you can see from the chart, increasing the percentage of decision-makers with easy access to data does increase analytics maturity. But those benefits wane as the percentage increases.
In fact, the average scores start to even out after the 26 to 50 percent range.
Of course, having data is only one ingredient to driving value. As we all know, data only helps if you use it. So, you would expect that using data in decision-making would have just as strong of a correlation to analytics maturity. Yet, something surprising appears when we look at the data for analytics maturity compared to using data to make routing business decisions.
Once again, we see a benefit to analytics maturity when organizations use data to appropriately frame and guide routine business decisions. There’s a significant lift to analytics maturity as companies use data to guide and frame more than 10 percent of their decisions.
However, the benefit of using analytics in decision-making starts to slow as it nears 25 percent, and there’s almost no increase in analytics maturity once a company passes 50%.
While increasing access to and the use of data and analytics does provide a lift to analytics maturity, it doesn’t provide as big of a lift as leaders who are driving change.
Organizations Can Drive Value Through Analytically Minded Leaders
As you saw from the first box and whisker plot, organizations with leaders that are actively driving plans or making analytics a strategic imperative are nearly a point ahead in analytics maturity compared to organizations that don’t.
However, that’s only one example of correlation. So, how about another?
Do you see it?
There’s that correlation between analytics maturity and leaders again.
Organizations with leaders who align analytical efforts to all key business objectives, or even a few strategic objectives, see a more significant lift to analytics maturity than organizations that don’t. Once again, that gain is nearly a whole point in analytics maturity.
While increasing access to data and using it to frame and guide business decisions helps with analytics maturity, they’re not the only factors contributing to increased value.
It’s not even the main factor. That correlation belongs to leaders.
Not just leaders but leaders who ensure that analytical efforts are aligned to all key business objectives and measured and managed as part of an organization’s overall strategic plans.
Furthermore, people at organizations with higher analytics maturity are more confident in their operational, tactical, and strategic decisions.
Looking at these three graphs, you can see the confidence in operational decision-making climb from 49 percent at low maturity to 76 percent at strong maturity. The same improvements occur for tactical and strategic decision-making, with confidence percentages rising from 51 to 77 percent and 64 to 79 percent, respectively.
So, not only do leaders hold the keys to analytics maturity, but they also hold the keys to driving value and instilling confidence in short-, medium-, and long-term decision-making across their organizations.
Using Analytics to Drive Value
The data from the Alteryx Analytics Maturity Assessment for the second quarter of 2023 shows the clear connection between the emphasis leaders place on data and analytics maturity.
And, since higher analytics maturity leads to more operating income and revenue for organizations, leaders who align their analytics to business objectives should have a solid correlation to added value.
The question is, what should leaders do to increase their organization’s analytics maturity so they can see value?
We recommend taking at least the following four steps:
- Ensure decision-makers have easy access to data
- Use data to guide and frame routine business decisions
- Align analytical efforts to a few, if not all, business objectives
- Actively develop and implement plans for analytics initiatives and treat analytics as a strategic imperative
The first two steps require analytics investments that make it easy to move data around your organization and get answers from them. This includes decisions improved and enhanced with data science, machine learning, and AI.
The last two steps require strategic thinking, planning, and alignment.
Of course, we also recommend taking the Alteryx Analytics Maturity Assessment to get a clear picture of your current level of analytics maturity. After you take it, you’ll get a customized report with your score, how you compare to organizations within your industry, a list of next steps you can take, and recommended resources you can use.
If you’ve already taken the assessment, we have plenty of resources to help you plan, strategize, and align your organization.
No matter the path you take, though, remember that you’re in the driver’s seat. You don’t have to do anything radical to create value during economic volatility. You only need to look in the mirror and align your organization’s analytics to its objectives.