Advanced analytics is considered to be crucial for risk managers. They bring an improvement in the decision-making process. It also plays a vital role in enhancing accountability. It also offers financial health benefits. It is useful to the employees in predicting the losses and performance of the monitor. Here are a few of the challenges and their solutions in advanced analytics:
The amount of data which is collected
With the introduction of big data and data-driven business firms, the risk managers, as well as employees, are seen to be overwhelmed with the total amount of data, collected. The business firm may get information on different interaction and incident which takes place daily, thereby leaving the analysts with a plethora of interlocking data sets. There is a requirement for the data system which collects as well as organizes the information automatically. Performing the specific process manually will let the employees make use of the time which is spent in processing the data for acting on the same.
With the wide availability of data, it becomes tedious to dig down as well as get access to the data, which need more frequently. At times, the employees may not go for a complete analysis of the data. Instead, they focus on the specific measures which can be collected at ease, instead of the one which offers true value. Besides this, in case the employee needs to sift manually through the data, it is almost impossible to get real-time insight into what is happening currently. Outdated data can hurt the decision-making process. The data system is known to collect, organize as well as alter the trends of the user which is effective in resolving this problem. The employees are known to input the goals and set a report, which offers answers to the vital questions. With the real-time alerts and reports, it is a prerequisite for the decision-maker to feel confident that they are basing the choice on accurate and complete information.
For being understood clearly, it is necessary that the data should be presented in charts and graphs visually. Though such tools are really useful, developing them manually is challenging. You need to take sufficient time for fetching information from a wide array of areas and putting the same in the reporting tool which is time-consuming and frustrating. The storage data systems allow the building of report with the single click of a button. Decision maker and employees are known to have access to the real-time information which is required for an educational and appealing format.
The next problem is trying to analyze the data across several disjoined and multiple sources. Various pieces of data are present in various systems. There are chances that the employees might not understand this, which may result in an inaccurate or incomplete analysis. The combination of data manually consumes a lot of time and limit the insights to what is viewed easily. With the centralized and comprehensive system, the employees are known to have complete access to all the necessary details in a single location. This will spend an ample time as you do not need to get access to several resources. It also allows the cross-comparisons and ensures that the data is complete.
Low quality of data
Inaccurate data may be harmful to advanced analytics. You will never be able to get a good output without a reliable input. At times, manual errors are made during the entry of data. This can result in negative consequences in case the analysis is used for having an impact on the decisions. The asymmetrical data is considered to be another major issue. Here, the information in a specific system does not reflect the specific changes, which are made in the other system, thereby leaving the same outdated.
Low budget and shortage of skills
Budget is another crucial challenge of advanced analytics. Risk is known to be a small department. Hence, it becomes challenging to seek approval to make significant purchase. The risk managers can keep a specific budget for the data analytics by the measurement of ROI for the system and creating a strong case for the advantages, it will get.
There are a bunch of organizations that are found to struggle with the analysis owing to the lack of talent. The employees do not have any capability or knowledge for running the in-depth analysis of data. It is possible to mitigate this challenge by the addressing of analytical competency during the process of hiring and having a system of data analytics which can be used at ease. The first solution makes sure that prerequisite skills are required whereas the second one is known to make the analytics procedure simple for everyone.
Lack of support
Data analytics cannot be efficient and effective without the right support from the business organization. The risk managers will not be able to take the right decision if the executives of a specific level do not confer the capabilities of acting. Different employees play an integral role in the process. In case the risk manager fails to access the system or in case the data is not submitted for the analysis, creating actionable information can be hard.
It is recommended to emphasize the value of risk analysis and management to different aspects of the business firm to overcome this hurdle. As soon as the team members understand the benefits, there are high chances that they will be co-operating. Implementation of change can be really difficult. Use of the centralized data analysis helps the risk managers in communicating the results easily and getting the buy-ins from several stakeholders efficiently.
Scaling the analysis of data
Scaling the analytics can be a real challenge as the business firm as well as the total count of data collected by it grows. Collection of information and creation of reports have become complex. A system which grows within the specific business firm is indispensable in the management of the issue.
Notwithstanding the fact, that overcoming the specific challenges may take some time, you can reap a wide array of benefits from advanced analytics. It is useful in bringing an improvement in the ROI of your business and the ways you operate your business.