Wiley & sas business Series

   Ensuring Sustainability 
 To be sustainable, every group needs to cover its costs. Unfortunately, 
this sometimes acts as a major barrier to the organization getting 
engaged. It ’d be nice to offer services for free. Unfortunately, every-
thing costs money and data scientists aren ’t cheap. Changes to opera-
tional systems or data warehouses are even more prohibitive. It ’s not 
unheard of for a single data feed to cost over a million dollars in inter-
nal resourcing costs. 
 Every group is established as either a cost center or a profi t center. 
Cost centers are covered through a defi ned budget with no expecta-
tions that they ’ll cover their costs. As a shared service center, they sup-
port the business and are very easy to engage with. They also struggle 
to justify ongoing investment; to an accountant, they ’re still a cost. 
Profi t centers need to be self-sustaining. Through negotiation, transfer 
prices, or direct cost recovery, they need to be able to demonstrate 
their contribution to the organization 
’s bottom line. While they 
’re 
often proactive, every integration they have with another unit “costs” 
money. As such, while they rarely struggle to get investment as long as 
they can demonstrate fi nancial performance, their constant focus on 
cost recovery can act as a disincentive for other groups. 
 This seems to force an impossible choice. If the group tries to 
recover its costs from the start, it ’ll compound cultural resistance with 
fi nancial resistance. No one likes being asked to pay for something 
upfront where the value is not necessarily known yet. Unfortunately, 
analytics is mainly about dealing with uncertainty. However, never 
recovering  anything  greatly limits what the team can achieve. Making 
changes to operational systems costs real money and without this 
funding, it ’s impossible to embed analytics in operational processes. 
 Clearly, neither model is more effective than the other; each offers 
different advantages and disadvantages. The mistake most organiza-
tions make is to assume that it needs to be one or the other. By starting 
with the funding model rather than the desired outcomes, they make 
it that much harder to succeed. 
 The best solution is to align the funding approach against each 
activity ’s objectives. Early on, the net should be cast as wide as pos-
sible. While the expected value from any given project is usually quite 
low, some will offer signifi cant value. These need to be identifi ed 
and validated if a case is to be made for change. Once validated, the 

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expected return should be signifi cant enough to justify the investment 
that will be needed to change operational processes. 
 Following the trajectory of expected value creates the process 
described in Figure    6.3  . 
  During early stages, the main objective is simply to determine 
whether a solution exists and, if so, whether it ’s feasible to develop. 
Rather than create barriers to adoption or innovation at this point, 
it ’s better to make it as easy as possible to engage with the group. By 
treating the people who support exploration as a cost center, other 
groups are free to engage without having to allocate budget or other-
wise reprioritize their activities. Flexibility is key during this stage and 
as such, simply defi ning the engagement approach is usually enough. 
Activity and focus are best managed by prioritization, often supported 
through an oversight executive committee comprised of key senior 
stakeholders from the group ’s customers.