Analytics Strategy: Consulting v/s Hub & Spoke v/s The Embedded Model

How should organizations define an analytics strategy? There are typically three usual models that I have come across with different penetration, reach, and success. What works for one organization may or may not work for others and that is axiomatic.

The Consulting Model:  In this model a tight group of data science and analytics professionals work closely with business units to understand challenges, design, develop, and deliver the analytics. As the name suggests the approach is more consultative in nature (shorter term projects). This approach delivers the most bang for the buck, since the team can achieve quick wins for business leaders and demonstrate the value of analytics, leading to potential sustained consultative engagements with the business units. This model works well in organizations relatively new to analytics.

The Hub and Spoke Model:  This model relies on a central hub or center of excellence, which builds an entire team of data scientists, data engineers, and analytics professionals. Such hubs/ hub-spoke-genericCOEs are given the mandate to serve as a clearing house for analytics in the organization. Many examples of this model exist in very large mature data organizations (IBM and Microsoft, among others). The spoke refers to small teams dispatched from the hub to design, develop, and deliver analytics. This provides a more sustainable approach for organizations dealing with external accounts/ clients / partners for deploying analytics. The COE will continue to serve as the delivery arm for the analytics since it has all the data, infrastructure, and personnel in one place.

The Embedded Model:  This model has embedded analytics teams within business units. Usually, this is an approach taken by financial companies where specialized teams work with the business in continuously delivering insights. Obviously, this is not a scalable approach for organizations, albeit successful “locally.” This provides business units with analysts who do not have to be coached on the ins and outs of, say, quantitative trading strategies. However, it does have the limitation of ‘tunnel vision’ with respect to solving analytics challenges.

Obviously there are organizations which do a mix of all the above or a subset of the above approaches. Personally, I believe a hub and spoke model works best since it is in the interest of any organization to have a long-term vision of what analytics can do. If an organization as a whole wishes to be data-driven in everything they do, hub-and-spoke / COE model is the way to go. This also allows for expert generalists to be developed over time and gain experience and expertise across multiple business functions. This may take time to set up, but I believe the investment may be worth it. The age old adage “If you build it they will come,” works!

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