English to Greek Other IT (Information Technology) management, big data

Balancing speed, cost, and acceptance

A natural impulse for executives who “own” a company’s data and analytics strategy is to shift rapidly into action mode. Once some investment priorities are established, it’s not hard to find software and analytics vendors who have developed applications and algorithmic models to address them. These packages (covering pricing, inventory management, labor scheduling, and more) can be cost-effective and easier and faster to install than internally built, tailored models. But they often lack the qualities of a killer app—one that’s built on real business cases and can energize managers. Sector- and company-specific business factors are powerful enablers (or enemies) of successful data efforts. That’s why it’s crucial to give planning a second dimension, which seeks to balance the need for affordability and speed with business realities (including easy-to-miss risks and organizational sensitivities).

To understand the costs of omitting this step, consider the experience of one bank trying to improve the performance of its small-business underwriting. Hoping to move quickly, the analytics group built a model on the fly, without a planning process involving the key stakeholders who fully understood the business forces at play. This model tested well on paper but didn’t work well in practice, and the company ran up losses using it. The leadership decided to start over, enlisting business-unit heads to help with the second effort. A revamped model, built on a more complete data set and with an architecture reflecting differences among various customer segments, had better predictive abilities and ultimately reduced the losses. The lesson: big-data planning is at least as much a management challenge as a technical one, and there’s no shortcut in the hard work of getting business players and data scientists together to figure things out.