In conjunction with a webinar that I am participating in on 2/29 ( ZD & IBM – “Get More from your Data: How Business Analytics Gives You a Competitive Advantage”), I am posting a series of four blogs entitled “Business Analytics and the Mid-Market“.
(To attend my webinar on 2/29, Register at: http://b2b.ziffdavis.com/webcasts/improve-performance-your-data-business-analytics/?tfso=10480 )
This is installment No. 3 in that series; ”
To recap from my previouspostings;
- Business Analytics (BA) is “the use of data & analysis techniques to understand your business in a a way that facilitates better decision making”. BA is “fact-based decision-making in real-time based upon a 360 degree view of the business. It portends to offer the highest potential for competitive advantage of any strategic enabler (much less tactical or operational) available in the business leaders portfolio today, much less the future.
- To achieve true competitive advantage one must embrace the notion of Business Analytics in a holistic fashion in order to create “a pervasive culture of analysis and numerical literacy”. The 5 components of a holistic approach are; People, Processes, Technology, Culture & Data
- To achieve competitive advantage (via differentiation), much less sustain it, Organizations must make Business Analytics a core competency and foster its deep usage across all domains of the business. Business Analytics must be made pervasive across the organization
- Critical to the successful creation of competitive advantage is the role of the Business Analytics Strategy. It should encompass all domains of your business and support the 5 Pillars (People, Processes, Technology, Culture & Data) of a holistic approach to Business Analytics.
“How to Define & Create a Business Analytics Strategy for your Organization”
A successful Business Analytics Strategy is one that is fully-aligned and synergistic with both the Long-Term Strategy (3-5 years) and its companion Near-Term Strategic Goals & Outcomes (1-2 years). The Business Analytics Strategy cannot exist outside of these influences and should not be an after-thought in the Strategic Planning Process. In a recent MIT/IBM Study – “Analytics: The New Path to Value” ( http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-embedding-analytics.html) 45%+ of the Top Performing organizations were using analytics-driven insights to guide & define their long-term strategies (to create competitive advantage). These same Top Performers used BA at a rate of 5x in comparison to lower performers i.e. pervasiveness. These statistics are a small subset of the many that were uncovered in respect to how Top Performers differentiated themselves from their peers and the competition in numerous benchmark measures.
Business Analytics provides strategic enablement around the 3 major pillars of any long-term strategy*
- Using Innovation to Differentiate
- Revenue & Profit Growth
- Efficiency Enhancements (along with reducing inherent costs)
- Corporate Performance Management (Measuring, Monitoring and Optimizing key levers for Strategic Goal Attainment)
- Product Research & Development (Design & Simulation, Quality Optimization & Zero Defect Designs)
- Financial Management (Budget & Gross Margin Optimization, Cash & Investments & Risk Controls)
- Customer Insights & Engagement (Advocacy, Brand & Awareness)
- What are the measures of Strategic Success? How do we quantify them? Where and When should they be measured? What data sources & proxies are required?
- How do we instrument the Value Chain and measure/monitor outcomes at critical junctures?
- What predictors of success/behavior are critical to leverage?
- What historical & real-time information sources are required?
- What modeling methods are most appropriate and provide the deepest insights?
* When one considers the fact for every $1 invested in Business Analytics there is an ROI of $10.66 (Nucleus Research Note L127) it would be hard to not include BA as a “strategic enabler” in any Organizations strategic planning endeavors.