Who owns your analytics group?

Where you locate an analytics practice within the business may be as critical a success factor as the team’s skills, experts say. Should you embed it within the IT organization, establish it as an independent group, or embed the function within each business unit? Here are the options, the tradeoffs, and how to decide where to locate your analytics team.

Option 1: Run analytics as an IT operation

IT has the data expertise. Integrating the analytics group within IT helps foster a common sense of purpose, and that collaborative relationship may enable faster integration of analytics with other enterprise applications. But unless they can forge a close working relationship with stakeholders, such groups risk producing great models that no one uses.

Analytics groups may also disappear into the IT fabric, says John Elder, principal at consultancy Elder Research. “I wouldn’t embed them in IT because other priorities might take over.” Finally, analytics professionals who work within IT aren’t as well positioned to identify business needs, nor do they tend to be well equipped to sell the value of a model to business stakeholders in plain business language. “We techie people have to do a better job of making the business case for the model and showing that it will pay off. We’re still learning how to do that better,” Elder says.

Option 2: Let each business unit operate its own analytics group

Keeping analysts embedded in and reporting to the individual businesses is one way to make sure projects are aligned with business needs. This approach also facilitates collaboration between analysts and business stakeholders. “The initiator almost always has to be the stakeholder in the business who has the authority to authorize [the project],” says Dean Abbott, president of consultancy Abbott Analytics Inc.

On the down side, the relationship with IT, which “owns” the data, may be more distant. While analysts want to innovate, IT may be more concerned about system availability and performance demands. The IT group may view analytics as an annoyance, says Abbott, “because it means more hours in their day dedicated to things they don’t care about.”

Option 3: Create a shared services group

Operating a standalone shared services group for analytics allows for standardization of common sets of models and methods, eliminating redundancy and increasing productivity. “We believe that there needs to be centralized group, a permanent group that provides an analytical center of excellence,” says Kathy Lange, senior director of the business analytics practice at SAS.

But as with groups embedded within IT, being outside of the business team can reduce buy-in by the business. That’s what happened to Bryan Jones, director at the USPS Office of Inspector General’s (OIG) countermeasures and performance evaluation unit.

“We couldn’t get much traction because we were an outside entity,” he says, so he tried a blended approach: He moved analysts into the investigations groups and had them report directly to the stakeholders. The effort succeeded, and his group gained credibility. Today those groups send auditors and investigators to his services group to help develop new predictive models customized to their requirements. “We’re an organizational support group again,” he says.

Procter & Gamble takes a similar approach, but at a much larger scale. The analytics team at the consumer products company operates within a global shared services group that reports to the CIO, but P&G also embeds some 300 analysts in the individual businesses to act as “trusted advisors” to presidents and general managers, says director of business intelligence Guy Peri. Using an agile development model, the group can tweak an existing model within 24 hours, deploy new ones within 30 days, and scale a good one out to other business units within 90 days. “The only way to get the domain understanding is to be collocated with the business teams,” he argues.

George Roumeliotis is the data science team leader at Intuit. “You need both,” he says. “You need folks embedded in the business units, and folks in the center who can provide best practices.”

Ultimately there’s no one-size-fits-all decision, says Gartner Inc. analyst Gareth Herschel. “If you’re IT-centric, put them in IT. If you have business units all doing different things, embed the groups in the business. And if the businesses share customers and suppliers and have product overlap, use a shared services group.”

Related Stories:

Copyright © 2012 IDG Communications, Inc.

Bing’s AI chatbot came to work for me. I had to fire it.
Shop Tech Products at Amazon