More and more executives are signalling that involvement at the highest management level – and the right organizational structure – are critical factors in how successful a company’s analytics efforts are, even more important than its technical capabilities or tools.
Insights from a recent McKinsey survey show there are high hopes globally for how analytics can have a positive impact on revenues, margins, and organizational efficiency in the coming years. To date, though, many companies are still reporting mixed success in meeting their analytics objectives. For those that may be struggling, a lack of strategy or tools isn’t necessarily to blame.
The biggest hurdles to an effective analytics programme stem from a lack of leadership support and communication, ill-fitting organizational structures, and troubles finding (and retaining) the right people for the job.
The respondents in the McKinsey survey – conducted with 520 executives in a range of industries last September – said their organizations pursue data and analytics activities for a range of reasons, most often to build competitive advantage or improve the customer experience. Whatever the motivation, companies have found mixed success: 86% of managers said their companies have been at best only somewhat effective at meeting the primary objective of their data and analytics programmes, including more than one-quarter who say they’ve been ineffective.
In the survey respondents shared their perceptions that business generally needs to invest more in analytics, recognizing the transformative power of big data. Fast, automated access to accurate data is only a prerequisite for the strategic use of advanced analytics.
The wider challenge is to generate value from the data. Advanced analytics enables better decision making in pursuit of strategic objectives and increased performance transparency to improve bottom-line financial results.
Business leaders across various financial industries say they are making significant investments in risk-culture programmes, in particular launching dedicated actions to increase risk culture in retail-type businesses and products.
Working with our clients we observe that the demands on analytics teams is rising in terms of the scale of change and the ability to test, move on quickly, and test again. There are rising demands too on the ability to recruit, retain and target talent in the most effective way.
Considering how big data is having an impact on risk scoring and risk reporting, things have moved on from the initial stage of digitalizing information and archiving. The industry is moving into a phase where analytics is becoming something more embedded into the fabric and risk culture of the organization.
In terms of the streamlining of workflow and decision-making, one frustrating aspect of analytics that we encounter a lot is with inadequate tools and data access. Insurance companies out there have great people and great ideas but sometimes they just can’t get to the data they need. Either systems are too segmented, they are in different locations, there aren’t keys, or there isn’t any way of pulling the data together. It can be an issue of having the right training or approved access to the data.
This issue sounds very simple, but we see it on a regular basis and the solution must come down from the top.
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Follow the link to the LexisNexis Risk Solutions India website to find out more about how we support insurers.