The point of departure for the work is a second annual survey with over 4 500 executives, managers and analyst respondents from 122 countries and 30 industries - 10 times the numbers of the typical BI/analytic industry survey. The response base, heavy with MIT alumni, SMR subscribers, customers, academics and subject matter experts, is probably more management-focused than the typical BI survey as well.
I like creating business value with analytics' definition of analytics, paraphrased to “the use of data and related business insights developed using statistical, contextual, quantitative, predictive, cognitive and other disciplines to drive fact-based planning, measurement, decision-making, execution, management and learning”.
Using a classification established in last year's survey, the study assigns respondent companies to one of three levels of analytics sophistication: aspirational, experienced and transformed.
1. Aspirational companies are basic analytics users driven from spreadsheets that have yet to make the big analytics leap.
2. Experienced companies rely on analytics to guide strategy as well as day to day activities and have invested in visualisation and advanced modelling tools.
3. Transformed organisations are experienced consumers who've committed to advanced analytic modelling and have also invested in an enterprise information architecture to source their initiatives.
The 2011 results point to the increasing use of analytics in business: 58% of this year's respondents cited competitive value for their companies from analytics, compared to just 37% last year. Tellingly, it's the experienced and transformed bases noting competitive advantage from analytics that have grown most significantly. Apparently, the analytics rich are getting richer.
The research identifies organisational factors as being critical predictors of whether companies can have success creating a competitive advantage with analytics. “In effect, the most advanced users of analytics typically have a strong data-oriented culture that supports and guides analytics use. Having the right combination of tools, data and people, while necessary, is usually not enough, according to the data. Without strong cultural commitments, the success of an analytics program can be easily short-changed or derailed.”
What are the characteristics of a data-oriented organisational culture? The research cites three:
1. Analytics is used as a strategic asset.
2. Management supports the use of analytics throughout the organisation.
3. Insights are accessible to all who might benefit.
Indeed, in data-oriented organisations, there's generally a top-down mandate derived from the business strategy to leverage evidenced-based decision-making managed through analytics champions.
A data-oriented culture is a necessary but not sufficient prerequisite for organisations seeking to create competitive advantage from analytics. Companies that wish to excel at analytics must first establish strong information management competencies and also build deep analytics expertise.
Which capability should come first? Creating business value with analytics suggests it depends on the type of organisation. Collaborative organisations focus first on an enterprise information platform to support broad dissemination of analytics. Specialised organisations, on the other hand, are more functionally-oriented, first building deep analytical skills for specific business processes.
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