"Is the juice worth the squeeze?"
That's how a colleague of mine asks if we are likely to uncover significant insights from a proposed project in our health innovation center. The question gets right at the heart of executive mindshare regarding health analytics investments; I just wish I had an easier answer.
(Source: Keith Williamson
If an organization is not doing any analytics, the answer is always "yes." Anyone arguing that information-based actions are not necessarily better than uninformed actions should be challenged to a blindfolded game of darts.
But comparative valuation can be tough. Before the introduction of software into the everyday workplace, productivity improvements looked easier. If an office was using typewriters, ledger books, and postal mail to conduct its business, the introduction of an electronic word processor, spreadsheet, and email had obvious, measurable impacts in speed, accuracy, and efficiency. But once an organization moves beyond that technologically barren phase, justifications for a different word processor or email platform become more difficult. "Why is it better than what we have?"
When that answer seems challenging, it may appear that there must be "less juice," but that conclusion is often unjustified. Automation, for example, is often a step-wise progression from an existing technological base (e.g., compare Mint.com to older versions of Quicken). In many cases, exponential value innovation requires the presence of existing technologies -- consider, for example, genomics.
Healthcare is just now emerging from its own technologically barren phase of paper records. Similar to the massive enterprise resourcing planning (ERP) system implementations of the past, healthcare will eventually learn that the value of information resides not in how you collect it, but in how you consume it.
But what if you already have basic business intelligence (BI) in place... how can you tell whether "advanced analytics" (e.g., predictive modeling, simulation, data mining, optimization, etc.) are better than plain old counts and averages? I always try to answer truthfully that we won't really know the answer until we do the work. But would you "bet your farm" on the Farmers' Almanac, or do meteorological models and weather forecasting help maximize crop yields? Would you blindly loan a stranger large sums of money, or would a credit-risk score help protect your money?
If there is value in knowing...
- How likely it is that a particular thing will happen -- where, when, and to whom?
- Why is it happening?
- How to get the best outcome when dealing with it?
...then there is "juice" in advanced analytics. And the value is at least equal to the cost of whatever bad thing(s) happen when you cannot answer those questions.
Of course, my friend's question also highlights how hard we currently have to "squeeze" to get insights. All too often, our analytical opportunities are compromised by immature enterprise architectures and information management practices. It can be time consuming and costly to get any insights, let alone insights that are useful.
But no one would have ever designed a "juicer" machine until they got tired of squeezing produce by hand. In my experience, analytical leaders find ways to serve two goals simultaneously: answering the immediate questions and iteratively building a platform for future insights. And that platform becomes a gift that keeps on giving.
What do you think? Is the juice worth the squeeze?
Editor's note: Jason will be joining us for a live, on-air interview this coming Monday, Oct. 7, at 2:00 p.m. ET for a discussion on "Making Medicine Smarter." Register now and tune in next week!