Land of hype and glory
A recent conversation with an IT analyst was fascinating. She suggested that, as far as big data analytics were concerned, if we want to put our exciting new skills to the test, the sectors we need to focus upon are retail, financial services and higher education. The hype and the smart money are (still) with predicting which film we might like to buy or spotting when our credit cards have been cloned.
She agreed that other sectors also have plenty of data, and opportunities to put it to good use. But they just don’t have the money for this sort of thing.
These others are, of course, sectors such as our health and education services, local government, housing associations, legal practices, and some of our larger charities. And the data in question might just help to reduce the costs of primary or secondary care, or of housing the homeless.
But, to a certain extent, she is right.
She was pointing out that those who decide to employ big data analytics are prepared to invest a lot of money. Given that sectors such as Health and Social Housing don’t have much spare cash they are unlikely to join the party.
So, we could follow her advice (and the hype) and seek the riches and glory that will come with yet another prediction engine for holiday destinations.
Or we could do something more useful. We could continue to use these techniques to make a difference where lives matter.
The unhelpful answers are sometimes the best
But, there is the money problem. If there isn’t much of it to spare then the perception is probably that nothing much can be done.
Well, let’s nail this perception.
As a start, the analytics involved should be planned to simply deliver a healthy Return On Investment (ROI).
This may not sound very helpful. But the rigour that this will involve will impose a tight and much needed discipline across the whole exercise. In short, it will force everyone involved – to think.
It means for example:
- Being rigorous in defining the problem to be solved;
- Designing analytics that will help to solve just the problem at hand;
- Being very creative about how to extract and process the data needed;
- And knowing exactly how the benefit will be delivered that will make the whole exercise worthwhile.
Why should these make the difference?
Because this is the exciting world of ‘Artificial Intelligence’ and much of the hype has been generated by those who can explain what’s possible rather than by those able to say what’s needed. And there are many businesses that have jumped in with both feet (and a great deal of money) in their search for the possible that are now struggling to see any sort of return on their investment.
But, when you are forced by financial constraints to step back from what’s possible to examine just what’s needed, things can suddenly appear to be a great deal simpler, easier and cheaper.
It’s similar to a film plot in which a cop is tenaciously picking the lock of a property they want to sneak into. Their partner however, seeing how long it is taking, steps over them and just kicks the door open.
The problem to be solved wasn’t how to pick the lock, it was how to get the door open.
We are in a world of increasingly sophisticated lock picking devices. But at the end of the day, if you are trying to improve social housing provision as quickly and as effectively as possible, the best solution might be to just kick the door open.
Develin Consulting Ltd
We at Develin specialise in analytics that simply get the door open. Please give us a call if you would like to know more
A recent post of ours on LinkedIn received some welcome ‘likes’ in response. It was good to know that it was well received.
The post referred to an article recently published which was co-written with Jamie Stentaford from the Affinity Sutton Group. It was called ‘Management Accountants as catalysts for change’. Those who liked the piece were almost certainly Accountants. Hopefully each was thinking ‘a catalyst for change. YES!! That is exactly who I am and what I do!’.
A nice thought but perhaps a little optimistic.
It’s more likely they were thinking ‘YES! That’s exactly who .. er .. I would like to be. I just need more time in the day, greater access to better data and better tools, the right set of skills, better support from the rest of the business, stronger candidates coming through to fill vacancies .. etc’
The article was about a management accounting team that has definitely earned the title ‘catalyst for change’. But the subtext within the article, and probably the reason that it was published, was that examples such as this are still few and far between.
The Author of this blog teaches Mastercourses for the Chartered Institute of Management Accountants (CIMA). In the classroom we explore what’s needed for the Finance Team to become stronger ‘agents of change’, in particular the skills needed to provide the business with better insights from its data.
It’s clear from our delegates that expectations in this area are rising. Their colleagues back in the office are becoming increasingly aware that better access to data and more powerful tools with which to manipulate it should mean analytical insights not hitherto seen before e.g. segmentation of customers, trends in demand, predictions for step changes in economic outlook.
Our delegates would love to be able to provide them. But, unless more time can be made available to develop and introduce the necessary techniques, nothing much is going to change.
Even then it will take time. Affinity Sutton formed a new vision for their service over two years ago. It’s taken them until now to get fully into their stride.
To make more time available Finance need to either pass work on for others to do or cut back on stuff. In the classroom we perform a simple exercise using an old technique to illustrate how this can be done. There is no pretence that it’s easy. But its meant to encourage delegates to believe that it can be done and to have a go when they get back to the office.
The technique is drawn from a practice that is long out of fashion – zero based budgeting. In short this involves reducing service levels to quickly release time (and possibly save money).
Delegates list as many of the outputs from Finance to the rest of the business as possible. They plot each output on a grid. One axis is for ‘service level’ i.e. the scope of each output, the level of accuracy, the amount of detail, the frequency, timeliness .. the key elements of delivery that define the overall quality.
The other axis is ‘level of value to the recipient’ (i.e. the person who makes use of the output).
The recipient isn’t in the classroom so on the day we have only a one sided view of things. Nevertheless once all the services are plotted mismatches quickly become apparent. An output might be given a high service level score (a great deal of detail is presented with meticulous care), but a low score for its value to the recipient (it typically attracts little interest).
A finding such as this will often trigger a meaningful debate about the relative value of different outputs and how it should be possible to cut back on some to release time for something better.
The Finance Team within a large Logistics client conducted this exercise. They released so much time they celebrated by giving the entire Finance Team a day’s holiday a week after Year End.
It works, and an exercise such as this might be the best present that Finance can give to their business. People will get less of what they don’t need and more of what they do.
That said, the key message that we leave our delegates with is that they can free time up for better things, but it shouldn’t be down to Finance to do this alone. This is all about upskilling Finance to allow them to do much more to drive up value in the business.
If our delegates can pass that message on once they are back in the office, and make it loud and clear so that the whole business hears it, then they too might receive a few ‘likes’. And if things are going really well they might also get a reply from the rest of the business along the lines of ‘how can we help?’