Creating Business Value with Analytics
As the data deluge continues to grow, more companies are under increasing pressure to develop systems that create both business value and competitive advantage. According to a survey conducted by MIT Sloan Management Review, in partnership with IBM Institute for Business Value, more than 58% of the more than 4,500 respondents said their companies were gaining competitive value from analytics–up from just 37% who thought this last year.
The authors found that rather than having the right tools, technology and people, organizational factors are one of the most important predictors of the ability to create competitive advantage. Managers who responded to the survey cite management support for analytics, including top-down mandates, and having analytics sponsors and champions as key, in addition to practices such as using analytics to identify and address strategic threats and opportunities.
Data-oriented organizational cultures have three key characteristics: (1) analytics is used as a strategic asset, (2) management supports analytics throughout the organizations and (3) insights are widely available to those who need them. In addition, organizations that excel at using analytics are sophisticated in their information management, and possess real analytics expertise. The path to developing these competencies takes time and has distinct challenges. The authors summarize each, and propose ways to assess current organizational culture and choose the approach with the best likelihood of success.