A few days ago, we posted on a Novarica report which provided insight on major challenges to Business Intelligence. The largest inhibitors for insurers seemed to be systems/data related (core systems inflexibility, poor data quality, lack of standards for data). Now a major study by the IBM Institute for Business Value in collaboration with MIT Sloan Management review (Analytics: The new path to value) suggests that for a wider audience – 3,000 executives from many different industries and countries – only one in five respondents cited concerns with data quality or data governance. The bigger obstacles were lack of understanding on how to leverage analytics for value combined with a culture which did not encourage data sharing.
This is probably less of a contradiction than it seems. The survey respondents from insurers were primarily from IT (who tend to focus – rightly – on data), whereas the IBM study covered senior managers in multiple line and staff areas.
There are significant commonalities between the reports. Reinforcing the IBM study’s point, the Novarica survey concludes: “Participants were also generally conservative about the recent impact that their business intelligence capabilities had had on their operations.”
There may be danger in this. IBM’s work contains empirical evidence that sophistication in analytics correlates highly with organizations that regard themselves as ‘top performers’ and suggests that there is a learning curve to get to that level of sophistication.
It is clear that BI and analytics are both challenging and potentially profitable. Certainly something to watch. The 2011 Insurance-Canada.ca Technology Conference will have several sessions focusing on business intelligence and analytics for insurance business and technology professionals. We’ll have more from the IBM study in subsequent posts.