I have been reading about and practicing data analytics for several years now and I still don't get the hype that exists about the real value that it brings to its users.    Granted that cloud, remote virtualization, Big Data,  and advanced global networks  have made it easier and cheaper to store and analyze petabytes of data that if tapped on effectively can produce facts that would help any cause.  It is true also that analytics can bring the power of prediction and Business Intelligence can put information at one's fingertip in a format one can easily understand.  No doubt that cloud can help any enterprise get the necessary resources it needs virtually in real time. I for one have seen the value of Customer Service Analytics to help drive customer retention and loyalty.   With mountains of data, data quality and governance solutions, master data management  and data integration is allowing organizations manage their information assets many times quite effectively.  

There are a number of business domain areas where analytics has made a notable mark for consumers.  Data analytics on online flight reservation systems for example has helped Southwest Airlines provide numerous popular flight paths to travelers at very affordable prices.  On defense intelligence and terrorism, analytics has helped the intelligence community thwart attacks to a number of critical economic lifelines of the national infrastructure.  In life sciences, analytics is marking advances in the human genome project and the cure for many diseases of an aging population.

So great...Data Analytics certainly does give us a plausible value.  But, here is where I see it failing.  The current state of analytics and Big Data is such that it is helping somewhat in commerce.  However, how is it helping in the daily personal decision making of individuals as a whole?  Think about it.  How many spam ads and unwanted emails do you delete from your box every day?  In Q2 2013, the number of spam emails grew 4.2% from Q1 2013 to a average total of 70.7%of email.  When you purchase a product online, how much help do you get from vendors in comparing their products to the competition?  There are consumer guide sites such as CNET that do provide some information on purchasing electronics, but can you say the same thing about selecting a good primary care physician?  Can you honestly say that the data that the NSA gathered on you or other citizens will never fall in the wrong hands and do you trust the government that it never will?  Can you think of a web site you can go to that gives you real measures on information leaks? Do retailers who have millions of credit card records on file give you any statistics on number of security/privacy incidents and does that data show how they compare with other retailers? Think about any of the recent customer support calls that you made for a product that you purchased.  How does it compare to a similar experience say 5 or 10 years ago? If we took a survey that could measure weather a retailer is genuinely concerned about your issues, how would you think that retailer compares to say 10 or 15 years ago? 

It seems to me that bottom line, the value of analytics is in providing quality valuable service or product and that in itself builds the trust between the provider and the consumer.  So despite all the technology and gadgets in use today, we are still a long way from building that trust, and trust is the currency that we should be measuring success of analytics in any enterprise.      

Xerox invented Laser printing and copying less than 50 years ago and as a result revolutionized the publishing industry.  This innovation was so significant during its time that the outcome was that almost every Japanese electronics product manufacturer, the likes of Canon, Konica, Ricoh and Minolta invested billions to market office printing and copying products.  Xerox’s invention triggered the modern publishing paradigm that we live in today.  Of course, as we all know, when publishing spilled over to the internet and digital content became the biggest innovation of early 21st century, it led to a worldwide shift in knowledge and cultural norms spurred by a new invention, the social media.   

The millennia generation may take mobile content sharing and social interaction for granted, but those innovators of the 70’s know well that each new generation of innovation piggybacked on the previous one.   In the 1980’s Adobe developed PageMaker that marked a standard for printing digital content on paper.  Online digital content borrowed from that same innovation to mark new standards and methods of rendering images and text onto the rich content you now find on the iPAD.  Careers in content management and social media marketing were an outcome of these inventions.

During the 70’s when Xerox opened Palo Alto Research Center and invested billions in printing and publishing systems, it had a sizable impact printing and publishing business to tap on for its Research & Development costs.  Tax incentives for R&D also helped win those innovations.  Nevertheless, those billions that were invested were fraught with early failures.  Remember the likes of General Foods, Compaq and EF Hutton.  These were successful companies which invested billions in their products and eventually failed.  But, many have picked up their pieces and created more successful businesses.   To make an analogy for Xerox in today’s terms, one can site biotech innovations and the average lead time of 10 years that it takes to bring a drug into the market.  Kudos to those entrepreneurs who are willing to stick to their guns while waiting for their drugs to make their mark.     

Such is the current fate of the Health Exchange Marketplace that was a key element of the Affordable Care Act.   The state of Oregon got one of the largest per capita federal grants, if not the largest one to implement the state online Health Exchange Marketplace.  Both the Center of Medicare and Medicaid as well as state officials would acknowledge at the time that the federal grant was intended to be a stepping stone for innovation and to be used as a model nation-wide.   Expectations were set high by a democratically elected legislature and governor who were fighting tooth and nail against an onslaught of skeptics in media, partisan legislature and other partisan groups.  In 2011, the state’s vision was to build an online marketplace that required no more than 50-100 staff members to administer the entire Exchange bureaucracy.  For the Obama administration, that vision was supposed to be carried through to other states.  Of course, what happened next was a mistake in execution which can be blamed not only on the federal and state bureaucracies, and the contractor who was helping in building of the Exchange, but also on the insurance carriers who dragged their feet as a result of the skepticism that existed.  The Oregon exchange would have provided a seamless interface to insurance carriers, the state Medicaid enrollment system and the federal CMS hub making it easy to register, shop for, enroll and administer the individual and employer plans.  Other state Exchanges such as those of the State of Kentucky, Washington and California were dealing with much larger citizenry and tax base where they could afford 10 to 20 times more staff members to administer the Exchange.  In those cases, focus was not on innovation or seamless integration, but more so on getting the online enrollment applications submitted.  So, those states were able to get the web interface up and running by the open enrollment deadline of Oct. 1, 2013.

A lot can be said for the mistakes that were made.  But, it can certainly also be said that the vision that existed in early 2011 was later clouded by the cynicism of partisan politics.  The state that now had to rely on additional federal grants to complete the project was faced with a federal HHS bureaucracy who no longer had the clout to provide additional grants.  One can site numerous examples of failures of a similar kind in the private sector which were followed by successes only because the leaders of such initiatives were able to convince their constituents that staying the course or some course corrections would yield a positive outcome.  We may never know whether this will be true of the Oregon State Exchange as the governor and the state bureaucracy has decided to use the Federally Facilitated Exchange (FFE) for next year’s open enrollment period.

Two things we do know however.  First, that it is possible to get the State Exchange right if leadership is willing to stay the course and reinvigorate the vision that existed in 2011.  Secondly that despite all that you hear about the failures, that IT expenditures in like situations are much larger in other business sectors.  In banking, for example, Gartner data shows that the average IT spending is 6.3% of revenues.   In global banking institutions that number could be as high as 15% of revenue.  In the Healthcare sector the expenditures are at an average of 4.2% of Revenues.   We can probably all agree that health insurance carriers and providers leave lot to be desired on their online services.  One can argue of course that each sector has its own nuances and business models that do not make it possible to spend more on IT.  However, other data also shows that private sector institutions that have robust governance and who exhibit a lot of agility in their business operations also tend to spend more on IT as a percentage of their revenues.  In government where comprehensive data is lacking, the DOD and Homeland Security agencies spend about 6.5% of revenues.  Other agencies spend a lot less.  In State government, the best numbers that exist point to an average of 3.5% of revenue comparable to rates found in Pharmaceutical, Telecommunications and the Insurance sectors.

The Affordable Care Act signed into law in 2010 provided $35 billion in grants to states and the healthcare industry for improving citizenry access to healthcare information and for electronic health records.  Part of this appropriation was for federal grants for state exchanges and Medicaid modernization.  This investment is only a down payment and in many cases an incentive for the private sector to understand that the mission of the federal government is reducing the cost of healthcare by streamlining healthcare administration.  One can argue that private sector innovation, fraud prevention and certainly streamlining regulations can contribute significantly to cost reduction.  One thing is certain however and that our economy cannot afford a situation where healthcare services are provided to the citizenry in a haphazard way.  Therefore, it is imperative that healthcare payers, providers and all forms of government find ways of collaborating in order to find significant ways to reduce the cost of healthcare.  We can start by going back to the age where politicians and citizenry alike can lay down their arms and find ways of working together.