Driving Sustainable Business Value from Data and Analytics

(USA and Canada) Leading corporations and business leaders have long been frustrated in their efforts to demonstrate ROI from data and analytics investments.  While realizing the importance, and often the necessity and urgency, of undertaking these investments for the long-term benefit of their organizations, these executives have struggled to identify the appropriate metrics to quantify and provide business justification for investments in data and analytics initiatives.

Now, a growing number of industry executives, and data and analytics practitioners, are championing a new metric which they have labeled as “sustainable business value”.  At the recent CDO & Data Leaders Global Summit in 2021, sponsored by CDO Magazine and the EDM Council, an executive panel offered their perspectives on this topic.

Moderated by Mark Johnson, editorial director for CDO Magazine, panelists included Mike Onders, EVP and Chief Data Officer of KeyBank, Derek Strauss, former CDO at TD Ameritrade, Bob Markiewicz, Head of Enterprise Data Management at Johnson & Johnson, Moez Hassan, CDO for Royal Caribbean, Richie Bachala, Global Data Engineering Manager at Sherwin Williams, and Peter Aiken of Virginia Commonwealth University.

The panel participants were in strong agreement that data and analytics investments must be viewed through a lens that corresponds more accurately to the value that is derived from these investments.  This lens focuses on long-term value creation and the total enterprise value of implementing new capabilities – which will benefit the entire corporation for many years. 

Panelists each made a case that traditional ROI metrics are too often ill-suited to capturing the sustainable business value that derives from data and analytics investments.  There was a consensus that data and analytics deliver long-term value that can’t be neatly packaged and measured by basic ROI approaches.  Ex-TDAmeritrade CDO Strauss commented, “Sustained business value should be the right metric.”  J&J’s Markiewicz noted, “ROI is too narrow a measure.  Data and analytics represent an entire ecosystem that is much larger than simple short-term ROI.”

Sherwin Williams’ Bachala stated that organizations need to understand the full enterprise business impact of data and analytics investments and become more effective at harnessing the business value of these investments.  He acknowledged how hard it has been for executives to quantify the value and return from data and analytics investments in the short term.   All panelists were in agreement that these investments must be viewed with a long-term lens that is attuned to the sustainable business value that is built and accrued over many years. 

KeyBanks’ Onders noted how “ROI does not always equate to value” and echoed the comments of Sherwin Williams’ Bachala, quoting a Facebook executive who expressed their view that “It’s about impact.  Something has to change – some behavior; some metric.”  Onders acknowledged that moving beyond the ROI equation is a “harder conversation”. 

Panelists suggested that Chief Data Officers face a difficult task given the disruptive nature of their roles and the unsuitability of traditional business metrics as measures of success.  Hassan of Royal Caribbean noted the challenge confronting CDOs, because “Data and analytics are core to optimizing all business processes.”  Aiken, of Virginia Commonwealth, called on organizations to “broaden their perspectives”, noting “you can’t run data as a project.”

Aiken emphasized the necessity of creating new capabilities and spoke of data as the soil from which business value is created.  Strauss expanded upon this analogy, suggesting that data and analytics were like a tree with roots in the soil in the form of data management, and bearing fruit in the form of analytics. 

The panelists agreed that it is the responsibility of the Chief Data Officer to deliver sustainable business value from the programs and activities that they manage.  They noted that data and analytics programs benefit all business stakeholders.  Reflecting upon measures of success, it was suggested that one measure should be the ability to quantify what it is that can be done now that couldn’t be done previously. 

KeyBanks’ Onders noted the convergence in recent years of the Chief Data Officer and Chief Analytics Officer roles into a single CDAO responsibility, sharing his perspective that Analytics leadership would become the dominant function in the years ahead, and citing CapitalOne as an example where every business leader is an analytics leader.

In concluding their discussion, the panelists focused on the importance of culture as a predetermining factor in developing the right data and analytics approach for any organization, citing the Peter Drucker statement that “culture eats strategy for breakfast.” Bachala of Sherwin Williams, explained that he had 11,000 internal users across 100 countries to satisfy, noting that change is driven from the business community and that there are many different operating practices that he must work with. 

The panelists agreed on the necessity of education and data literacy programs to both educate the C-suite as well as to educate stakeholders at all levels of an organization.  They envisioned a future where digital, data, and analytics were converging as brick-and-mortar receded, accelerated by the COVID pandemic.  

The panelists shared the belief that each company is on its own, distinct journey, where one size does not fit all.  While some companies are moving toward decentralization of analytics and some data capabilities, other firms prefer to operate in a centralized model.  It was noted that data is a core business enabler and companies must continue to adapt. 

Strauss summed up the perspective of the panel as they looked to the future, remarking, “Change is constant.  Change is good.  Culture is first and foremost.  CDOs must morph and adapt.”  This common recognition, combined with the development of new measurement metrics, will help organizations evolve and move toward realizing sustainable business value from their data and analytics investments in the years ahead.

Randy Bean is the author of Fail Fast, Learn Faster: Lessons in Data-Driven Leadership in an Age of Disruption, Big Data, and AI.  He is a contributor to Harvard Business Review, Forbes, MIT Sloan Management Review, and The Wall Street Journal, and Founder and CEO of NewVantage Partners, a strategic advisory and management consulting firm which he founded in 2001. You can contact him at rbean@newvantage.com and follow him at @RandyBeanNVP.