Building Competitive Advantage Through Analytics
By Matt Sarrel
With three years of data, which skills/competencies are emerging as required for building data-driven competitive advantage.
In many ways, big data isn’t anything new. What we’re calling big data and analytics are natural evolutions from data warehousing and business intelligence. It’s what we do with the big data that counts. Analytics, driven by the need to optimize business processes, have taken a front seat at the information technology table. According to a survey conducted by IBM, “Analytics: The real-world use of big data”, “big data is having an impact” and changing the way we do business. TK % of companies report that big data and analytics help provide them with competitive advantages over their peers.
Business is all about competitive advantage (at least I think it is) and this is greatly facilitated by gathering and analyzing data about how a business works – processes, supply chains, routes – can all be optimized given the right data and analysis. In addition, the survey found that big data and analytics initiatives succeed when aligned with business goals and business driven outcomes such as customer centric outcomes (49%), operational optimization (18%) and risk/financial management (15%).
From the survey: “Organizations worldwide are serving their customers better and improving operations through big data. Companies like Mcleod Russel India Limited completely eliminated systems downtime in the tea trade through more accurate tracking of the harvest, production and marketing of up to 100 million kilos of tea each year. Premier Healthcare Alliance used enhanced data sharing and analytics to improve patient outcomes while reducing spending by US$2.85 billion. And Santam Insurance improved the customer experience by implementing predictive analytics to reduce fraud.”
Building analytics capabilities based on business priorities is a concept embraced by IT leaders in all three years that IBM has conducted the survey. Organizations taking the leap into analytics need to invest in skills and tools. Professional development of in-house analysts (a key repository of information) needs to be a top priority for business executives. Aligning analytics capabilities with the business that drives (and funds) them is viewed as a competitive advantage in many fields, such as manufacturing, logistics, and insurance.
Like anything in business your analytics initiative can only succeed if success can be measured. Develop a solid, quantifiable business case for your big data and analytics projects. Actively solicit input (and cooperation) from business executives so they know what to expect from these efforts.
According to the IBM survey, many organizations base business cases on the following benefits of big data projects:
• Smarter decisions – Leverage new sources of data to improve the quality of decision making.
• Faster decisions – Enable more real-time data capture and analysis to support decision making at the “point of impact,” such as when a customer is navigating your website or on the telephone with a customer service representative.
• Decisions that make a difference – Focus big data efforts toward areas that provide true differentiation.
Does your analytics program help business executives make smart, faster, and more impactful decisions? If your answer is yes, then you and your organization’s leadership know the value of a top notch analytics program. Please share some insight with other readers.