When Will Analytic Business Adoption Reach an Inflection Point?
Blog: Enterprise Decision Management Blog
I have a confession to make. And nothing that would make most of you shudder (except for my beloved marketing colleagues). When I tell people I work for FICO, I usually get a response like “can you fix my credit score?” And by the time I break into my economical 30-second elevator pitch fit for cocktail parties, describing that we do more than scores, they’re already mingling with someone else.
But recently, I had a conversation that evolved beyond the 580s and 820s of the credit scoring world. At a party, I chatted with someone who actually stuck around for my “what I do” story and confessed to knowing that FICO is in the analytics business. We talked about the difference between predictive and prescriptive analytics, the cumulative effect of business actions (such as marketing offers) on consumers, and even into the business value of an occasional fraud false positive. Talk about heady stuff for a party!
What really stopped me in my tracks, however, was the next line of questioning (paraphrased, by the way, to account for the usual memory lapses associated with late-stage party conversations).
“Is there really an imperative for organizations to adopt analytics…other than scores and other basic analytics – to drive outcomes – or do these often get caught up in siloed decisions and politics? At what point does it become a corporate imperative to adopt predictive/prescriptive analytics across the organization? And what triggers that?”
I did my best to share some examples about FICO customers who are using capabilities such as prescriptive analytics to transform their businesses, but the specific answer to “when does it become a corporate imperative” threw me for a loop. I left the party impressed with the discussion but frustrated I couldn’t provide a cogent response to the line of questioning.
I volleyed the discussion back to Scott Zoldi, FICO’s Chief Analytics Officer. “Those companies that are successful in predicting their fiscal outcomes are those that leverage analytics across silos and aggregate to the larger business,” Scott told me. “The inflection point here comes typically from upper management or the board of directors, and most notably will arrive quickly when companies get too many surprises at end of quarter or end of fiscal year. Or when businesses are failing to be competitive, are inefficient, and look at some of the role model companies that utilize analytics very effectively in their businesses.” Scott wrapped the explanation by mentioning, “At some point, their businesses become too complex to trust to human management without analytics, metrics and monitoring to ensure that small shifts to business and course corrections can be taken, vs. ‘running up against the shoreline’.”
So when it comes to taking the analytic leap, it’s anyone’s guess what will trigger the change in a particular organization. But given the infusion of new, disruptive companies in virtually every industry that leverage advanced analytics, the moment of truth for change has likely already arrived – or will, indeed, very soon.
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