Uncovering the Value of Data & Analytics: Transformation With Targeted Reporting

Insufficient tracking of transformation value often leads to mixed feelings at the leadership level and underutilized change potential.

Most of the time, (Cloud) Data & Analytics transformations are initially approved for implementation based on a solid business case with clear return expectations. However, programs often don’t have a functioning value framework to report on the business value generated from change and the progress toward the initial expectations.  

In such cases, the transformation impact for executives and business leaders is a “black box” with no clear indication of direction. As time passes and the costs associated with transformation programs increase due to scaling, an insufficient Value Reporting Framework can lead to loss in executive buy-in and reduction of investment budgets. Furthermore, with high market volatility, initiatives without a tangible influence on the company’s bottom line tend to be deprioritized quickly. 

On the more positive side, a high number of companies have robust value scorecards to track their transformation performance. However, metrics in these scorecards tend to be either too operational for executives to easily digest or focus exclusively on cost aspects. Such reporting usually misses other impactful value dimensions, i.e., increase in customer value, risk mitigation, and compliance. Despite potential shortcomings, we believe that operational value metrics should stay in place because they supply a sound foundation for assessing the performance of data and IT organizational units. This reporting category will henceforth be referred to as the "Inside-Out" view. In order to make value reporting more insightful and impactful for executives, we recommend the addition of a further reporting view, which we call “Outside-In.” This view measures holistic value creation from transformations across key enterprise dimensions, i.e., Top-Line Growth & Customer Value (more details on the dimensions in subsequent paragraphs). At its core, the Outside-In view monitors how a transformation supports the enterprise business strategy and gives insights into the overall return of transformation initiatives.

To accommodate the above needs, we propose two views, depending on the target consumers of the value reporting:

• Inside-Out View: Reporting to the Chief Data & Analytics Officers (CDAO) & IT leads. This view has a more operational and tactical focus.

• Outside-In View: Reporting to business leaders, executives, and key decision makers. This view has a more strategic focus, providing tangible insights on the transformation impact, measured with a non-IT lens.

While the two reporting views are stand-alone, they should — at a minimum — be reconcilable because they use the same underlying input data and fundamental assumptions in value models. Data processing efficiency gains, as recorded in the CDAO operational metrics, data processing efficiency gains should translate into enterprise business value measured in the Outside-In reporting under Operational Excellence.

Furthermore, input data and assumptions require alignment and certification by key transformation stakeholders, i.e., CDAO and IT heads, program leads, and business leaders to make the value reporting views transparent.

The reporting views are further described in a brief overview:

• CDAO & IT Inside-Out Value Reporting — Creating the basis for tactical decisions and unlocking further value potential.

The Inside-Out reporting follows the CDAO & IT goals and the underlying data, IT, and analytics strategies to achieve these. Common reporting topics focus on the change impact within the CDAO & IT organizations and business adoption, setting up a trusted data ecosystem for business consumption with clear Authoritative Data Sources (ADS), increasing adoption of self-service capabilities for business users, or reducing complexity in data processing. This type of reporting highlights tactical improvement potential through architectural redesign and refocusing priorities during a transformation journey.

The universe of metrics for this reporting is broad, and the final choice of metrics should address the goals and focus areas of the CDAO and IT units. This was the case in a recent transformation program where, from initially 10-plus reporting topics and 50-plus value metrics, the stakeholders aligned to continue tracking for five topics with four to five metrics for each topic. The right balance between how much to track and the relevance of the metrics for assessing the true change impact is essential to make the reporting both manageable and impactful.

Below we give a non-exhaustive example of topics and metrics tracked directly by CDAO and IT stakeholders in transformation programs. The thresholds for the metrics are set up internally by the CDAO and IT leads based on their specific transformation roadmap.

• Business Outside-In Value Reporting — Driving Enterprise Alignment and Executive Buy-In for the Transformation Journey

As mentioned, Outside-In reporting offers a perspective on the value generated across core business dimensions, which translates into the organization’s current and future results. This view enables businesses and executives to understand the impact of a transformation program quickly and holistically and evaluate to what extent the progress meets their expectations.

We show below five value dimensions to include in the Outside-In reporting. Depending on the reach of the transformation program and the business goals followed, not all dimensions are applicable.

The value metrics used to track the dimensions follow the business use cases included in the transformation roadmap, aligned to industry best practices, and internal standards for value measurement, i.e., increase in customer lifetime value as measured by the average profitability expected per customer.

•  Key Aspects To Start Value Reporting 

At a minimum, each reporting category should start with key aspects, including reporting dashboard layouts, reporting frequency, calculation method, accountability metrics, and the end-to-end process from collection of input data to the dissemination of metrics and forums to review the results and subsequent action upon them.

Leaders should consider implementing value reporting early in the transformation journey. This will help key stakeholders follow the transformation development, and creates a solid foundation for decisions.

(Note: This article contains the author's personal views, which should be considered as recommendations only.)

About the Author

Paul Olteanu is a Director in Accenture’s Chicago office, part of the Applied Intelligence Financial Services Practice. Before joining Accenture in Vienna (Austria), he worked for McKinsey & Company Risk Practice in the Frankfurt (Germany) office. As a data and analytics executive focused on value generation across business and technology, Olteanu has partnered for over 15 years with U.S. and European (Austria, Germany, UK) financial services clients to develop and implement data and analytics strategies across the end-to-end transformation lifecycle.

He specializes in data strategy, data management and governance, big data, data platforms, intelligent operating models, and operational excellence. Olteanu also has deep skills in company valuation, post-merger integrations, and financial/commercial due diligence.

Olteanu holds a doctorate in management science, an MSc in Finance from the Rotterdam School of Management, and is a Charter Financial Analyst (CFA) Level 3 Candidate.