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October 11, 2012

The Evolving Characteristics of Analytics Leadership

By Matt Sarrel

Since 2010, the IBM Institute for Business Value and MIT Sloan Management Review have fielded a study gathered from interviews with more than 4,500 managers and executives. These studies provide insight into how IT leaders can develop analytics programs that are successful. And by successful, I mean programs that provide information and assistance that can be used to power a data driven business.

Contrary to popular belief, building huge volumes of clean and useful data is not the most demanding aspect of creating a data driven company. The management and culture create greater challenges than the data and technology. In the 2010 study, researchers found that “the leading obstacle to widespread analytics adoption is lack the of understanding of how to use analytics to improve the business, according to almost four of ten respondents. More than one in three cites lack of management bandwidth due to competing priorities. Organizations that use analytics to tackle their biggest challenges are able to overcome seemingly intractable cultural challenges and, at the same time, refine their data and governance approaches.”

The 2011 survey findings shed light on the evolving field of business analytics and what it takes to transform a company to be analytics driven. Success factors focus on three key competencies: information management, analytics skills and tools, and a data oriented culture. Successful organizations are better able to make rapid decisions, reduce risk, and engage customers.

Analytics Competencies

Manage the data, Understand the data, Act on the data

Information management, Analytics skills and tools, Data-oriented culture

Solid information foundation, Skills developed as a core discipline, Fact-driven leadership

Standardized data management practices, Enabled by a robust set of toolsand solutions, Analytics used as a strategic asset

Insights accessible and available, Develop action oriented insights, Strategy and operations guided by insights

Source: The New Intelligent Enterprise, a joint MIT Sloan Management Review and IBM Institute of Business Value analytics research partnership. Copyright Massachusetts Institute of Technology 2011.

In many ways this is about IT and business leaders working together to uncover data and devise better ways to communicate complex insights. Many businesses begin with a focus on standard historical reporting, and while that is a good beginning, it merely hints at the true value of business analytics. The addition of new technologies like data visualization, process simulation, text and voice analytics, and social media analysis go a long way towards providing the predictive value that today’s (and tomorrow’s) business leader requires.

This post has been about success factors identified in 2010 and 2011, and have identified a number of organizational changes that need to take place to take the plunge into the world of business analytics. However, the 2012 study is coming out on October 16, which is just around the corner. As the analytics market matures, which factors will continue to be important for success? Which new factors will emerge? How has awareness of the power of analytics impacted your organization?

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