The golden project. Every analytics program has one. It’s the project that generated enough excitement that senior management agreed to start your analytics program.
It’s the project that has the potential to pay for it all. Maybe it’s not one project but it’s usually less than 3 projects. But what happens after you deliver these projects? Or worse yet, you discover along the way that those golden projects aren’t as golden as everyone thought.
At this point most analytics programs will move into run and maintain mode. Maybe they'll build an executive dashboard or automate some operational reports and be done. When this happens, it usually leaves an organization feeling like it could have done better.
The reality is that not every analytics project will be successful. Generally speaking, the higher the project value, the higher the project risk. It doesn’t mean you won't be successful, but the odds are less in your favor. As a result, teams tend to be more conservative. And that leaves a lot of untapped value.
How do you produce a consistent business value from your analytics ? Do what money managers have been doing for decades. Take a portfolio approach.
The first step is to create a list of all in-flight data and analytic projects. This includes the work required to produce reports and dashboards, data science studies, predictive modelling work, 3rd party analytic application support, and data integration projects. All the work required to support analytics across the organization.
Once your portfolio is built, you are now in position to accomplish 5 important objectives. All of these goals will help improve the value your organization sees from analytics.
Some analytics projects are pretty simple. The problem is well defined and the outcomes are straightforward to achieve. However, other projects may be more challenging to define or their value less clear. Taking a portfolio approach allows you to blend your project priorities to balance the risk/reward of your various projects. This is particularly important as the organization gets more mature in its use of analytics and there are fewer ‘low hanging fruit’ projects.
Encourage Investment Leverage
Certain types of projects create leverage, meaning they generate value beyond their initial intended use. Some examples include software/tools, data integration, and purchased data. Often it can be difficult to quantify the benefits from these projects on a stand alone basis. But as time goes on these investments get leveraged over and over again. Taking a portfolio approach gives you line of sight to connect those dots and see all the different opportunities that will be enabled by these leverage projects.
Increase Speed & Momentum
Creating speed and momentum is critical to value generation with analytics. One big challenge to this is bigger projects. They're complex and often value generated right away. But value can take on many shapes and sizes. A new data science study, prototyping a new concept, or implementing new visualization tools in the analyst toolkit seem small but can generate big value. If you take a portfolio approach you can mix smaller and larger projects. This will help to create a sense of speed and momentum within your organization.
Innovation requires risk. It wouldn’t be innovation otherwise. Ironically a risky stand alone analytic project will rarely get funded when competing for funds against a traditional project. This can cause an organization to miss out on significant upside opportunities. Taking a portfolio approach allows you to fund these projects as part of the portfolio. If the project doesn’t pan out, it’s covered by the returns of other projects in the portfolio. Here is a link to a short article on the International Institute for Analytics (IIA) website titled Fund Portfolios, Not Projects to Enable Innovative Analytics. It does a nice job of describing in more detail how taking a portfolio approach can enable innovation in your analytics.
Strengthen Organizational Commitment
Leaders are most passionate about projects they believe will make an big impact for their area. If your line of sight is limited to 2 or 3 projects that only benefit 10% of the leadership team, that will result in a low commitment by the organization. Taking a portfolio approach provides opportunities for everyone to participate. It also helps leaders understand that just because their project isn't the top priority today doesn't mean it won't be later. Funding a portfolio rather than individual projects also demonstrates the organization’s commitment to analytics beyond just a few initial projects.
Ultimately taking a portfolio approach to analytics is about making better choices. Choices that will improve momentum, executive buy-in, and value generation for your analytics program. It’s also about making choices that will prevent you from ‘putting all your eggs in one basket’.
Want More Consistent Value from your Analytics?
My FREE prioritization toolkit will help align your leadership around the projects with best opportunity for value generation.
I value your privacy and would never spam you
Latest posts by Phil Kelly (see all)
- Five Ideas to Improve your Analytics Returns - October 24, 2018
- 5 Reasons to Take a Portfolio Approach to Analytics - September 27, 2018
- How Small Provider Networks Can Be Data-Driven without Breaking the Bank - May 11, 2018