The analyst function is dead

8 09 2011

The role of the operational analyst has moved from the business into both Finance and into IT.  The Finance team typically focuses only upon the financial outcomes of the business and has left the operational side of the business to the IT team.

Here is a conversation a client of mine recently had with their analyst…

ANALYST: ” Here is the report on units sold this year.”

BUSINESS:  “What happened here?”

ANALYST:  “That is a spike in the data.”

BUSINESS:  “Right.  But what happened?”

ANALYST:  “That is what the data is showing.”

Sadly, this is not uncommon in the business world today.  Billions of dollars are spent every year on Business Intelligence software to help us visualize what is happening within the business, yet we are really no better off in terms of insight.

WHY is this happening?

  1. The biggest reason why this is happening is we have changed the role of the analyst.  It used to be a marketing person looking at marketing data, or operations looking at manufacturing information.  We have now moved that role to IT, or IT has promised that that can do it better with their understanding of data structures.
  2. We have wrongly assumed that a picture is worth a thousand words.  In BI terms, a chart is worth a handful of questions. IT can not predict that next series of questions and is then left to prioritize what questions to tackle next.
  3. The pace of business, or at least the pace and variety of business questions (like the data we collect) has risen exponentially and scaled faster than our ability to respond.
  4. IT is over burdened and lacks the political power and will to say “no.”  They are in complete reaction mode and lack the resources to cover the demand.

WHAT can we do to fix this?

  • First off, we need to understand the analytical gap within the organization.  IT can manage the data and needs to partner with the business, but the business needs to own the intelligence.  It is easier to teach the business a little about technology, than teach the IT resources about the business.  The business side needs to find that type of person who understands a little about technology, but has a solid mathematical or statistical mind with a curiosity about improving the business.
  • The organization needs to find a better way to integrate better analysis back into the management process.  We need to give the analysts a frame of reference in which to explore ideas and present results.  Some of this will follow reporting upon weekly/monthly operational outcomes, while most will likely by ad-hoc hypothesis or what-if scenarios about some aspect of the business.
  • The culture has to reward critical thinking.  This is not true in most corporate cultures.  All to often, the analyst is criticized for not “going along” with the current belief.  If the culture does not reward new thinking, then the analysis will quickly fall in line with visualizations that support the status quo.
  • Invest in tools and training beyond just the core cubes and reports of the BI market.  While a good portion of analysis can be done with Microsoft Excel and a data dump, the more we want out of our analysts, the more we need to give them.  We need them to look at market baskets, threshold containment, frequency curves, optimization models, assumption testing, correlations, and many other types of analytical tools.

 

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4 responses

14 09 2011
Meta Brown

Michael, what good points you make. Your list of reasons why really hits home!

I’d like to add another reason why – job requirements for analysts have become laden down with technical items that don’t help the answer the “what happened” questions. Requirements like “Expert knowledge of SQL” are IT driven, not analytics driven. The push for IT competency steers managers away from hiring expert data analysts and toward expert data manipulators. There’s a world of difference between the two.

14 09 2011
Michael Ensley

Very good point. This also goes further when hiring managers don’t want to look out of their personal comfort zone. For example, if someone lacks math or statistical skills they will more often than not shy away from looking to these skills.

19 09 2011
Katie McCray

The state of things as they are – but all is shifting…

Currently, we see that the lines of IT and Business are more gray than ever, and we do see both functional groups duking out who owns analytics – right or wrong – but it’s a natural chaos that must occur while we shift generations and skillsets. At bare minimum, companies that do well to incent knowledge sharing, encourage tolerance across cultures (& generations), and effectively enable communication will do well —- regardless of whether IT or the Business “owns” analytics.

Most interesting is this new tech generation entering the workforce who have been brought up with IT acumen and technical intution from kindergarten… so regardless of the functional career they choose, they will bring a tech-savvy mindset and will likely bridge the IT / Biz divide by nature of who they are and what they enjoy. Not only that, but they are already in-tune with social sharing, remote communication, distance learning, and diversity tolerance, which are key attributes needed to blend our functional and global knowledge sets effectively.

Give them time to enter positions where they affect change, and we’ll see a change in how our organizations are structured and the methodologies used to run them. I suspect we will see blurry teams comprised of a miriad of knowledge sets with less functional walls become normal. I bet – 10 years from now – we’ll not hear an employee say, “I work for the IT department”, since the technical responsibilities will be blended throughout and the commodity-like activities outsourced.

6 10 2011
The emerging role of the analyst… « PureStone Partners LLC

[…] few days ago, I wrote about the analyst function being dead, which spurred conversations about the emergence of a new breed of analysts. Organizations, with […]

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