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01:18 PM
Gerald Shields, The Nolan Company
Gerald Shields, The Nolan Company

Insurance Leaders Must Collaborate to Achieve Analytics Value

Who should be in charge of deriving business value from analytics initiative? Ultimately, accountability is a collaborative effort.

In my last article, concerning the need to extract business value from business analytics, a reader asked: "Who should be charged with making sure this happens -- is it the responsibility of the CIO, line-of-business heads, data scientist (where there is one)? I assume it should be somewhat collaborative but I would think it benefits where there is a key leader to drive this." This is an insightful question business and technology leaders need to examine.

Yes, the drive toward accountability is definitely a collaborative effort. It's not unusual to find a difference of opinion as to who in the organization should shoulder this mission of deriving business value from analytics investment and activities. But most will agree that someone high enough in the organization must be charged with this responsibility in order to bring exposure, profile and accountability to the effort. As a former CIO, I believe this should not be the CIO. Rather, the CIO should partner with the head of Actuarial, CMO or Director of Sales (or all three) to lead the charge.

To some extent, just having someone drive the quest to extract business value from the business analytics activities will help drive business value. As Dr. W. Edwards Deming taught, you will never be able to improve that which you do not measure. You have to analyze what you're analyzing. Having detailed analytics on a company's analytics investment and activity may seem strange at first, but measurement and process analysis are key to refining business analytics to improve use and drive business value.

Companies are beginning to look at their business analytics activity on a process maturity continuum. When considering process maturity for business analytics, the processes in place in the three key practices in analytics maturity need to be examined:

  • Measure: the processes to establish metrics, report metrics and utilize metrics

  • Extract business value: the processes to transition business questions to analytics questions, prioritize analytics activity, execute analytics requests and confirm business value

  • Support: the processes associated with how an organization supports the infrastructure and the care and feeding of the analytics organization

It is critical to assess each practice area's processes to determine if the organization has the processes and structure in place to consistently deliver quality and value to the organization.

Processes within the Extract Business Value practice include: translating business questions into analytics questions, prioritizing analytics activity, executing analytics requests and confirming business value. By taking each process and decomposing the sub-processes associated with each, the organization will define how to succeed in extracting the business value.

As a company defines the processes and sub-processes associated with the practices within Business Analytics and assesses their performance on an analytics maturity scale, the organization is on the path to capitalizing on the analytics investment and moving toward becoming an analytics-based organization. The maturity scale ranges from an organization at Level 0 – Incomplete Processes up to Level 5 – Optimized Processes. Like most other examples of a process maturity assessment, an organization at Level 0 may have some success, however success is hit or miss, often limited to an occasional situation where "things just worked out well." An organization at a maturity Level 5 has consistency in the process, ownership of the process, documentation and institutional knowledge of how and why things are done. These mature processes give an organization an expectation of success that is often fulfilled.

Whose responsibility is it to make sure business analytics activities extract value? Ultimately, it is a shared responsibility. The CIO needs to be involved as do the business leaders; they need to set the expectation that this is a critical area where the organization will be measured and held accountable for delivering business value with the analytics progressing on the maturity scale to increase the probability of success.

About the author: Gerald Shields is Practice Director, Healthcare IT for The Nolan Company. Gerald has over 30 years' experience managing enterprise scale IT functions, with a focus on enabling the business through effective automation. At Aflac, he served as CIO and in senior IT management for over ten years, and is a respected thought leader and innovator in the areas of IT management systems, technology strategy, and mobile technology.

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