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. 2 in that series; ”
To recap from my last posting;
- 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
Where to use Business Analytics (BA) to create sustainable sources Competitive Advantage”
Business Analytics must be used pervasively in order to achieve long-term Competitive Advantage. In most organizations, the central focus for BA has been around the domain of “Customer”. This is clearly the most mature and comprehensive area of application of successful Business Analytics (there are now 30+ dimensions of Customer activity that can be measured, modeled and used to create a “predictive view of behavior,opportunity or risk”) and yet, sustainable Competitive Advantage is elusive. Many organizations under the auspices of the Strategic Marketing banner (CMO) have focused their entire energy only on this domain, leaving others untouched or given the short shrift. As one would imagine this singular focus is closely monitored by mimiced by the competition, thereby negating the means to sustain this source of Competitive Advantage. In many cases the data, the tools & platforms and the algorithms are all the same i.e. Salesforce.com creating little opportunity for differentiation at the end of the day.
To achieve differentiation, much less sustain it, Organizations must make Business Analytics a core competency and foster its deep usage across all domains of the business. This “pervasive approach” not only addresses all domains of the business equally, but creates a higher level of differentiation and operational excellence (both of which are great sources of Competitive Advantage) in aggregate. Business Leaders must strive for this “multiplier effect” as they plan to build their “”Predictive Enterprise” and assign/assess the necessary investments required to achieve it (the 5 Pillars of a holistic approach).
Critical business domains where Business Analytics can create Competitive Advantage appear to be straight-forward and self-evident, but warrant discussion nonetheless. Regardless of the size or type of your Mid-Market organization, Business Analytics can successfully be applied to the following domains with relative ease;
- Manufacturing & Distribution
- Sales & Marketing
- Finance & Risk
- Human Capital Management
- IT Services
- Corporate Management
In each of these domains there are mountains of data created during the normal course of business, much less available from 3rd parties. The critical path is “how to leverage it with Business Analytics to achieve sustainable competitive advantage”?
Critical to the successful creation of competitive advantage is the role of the Business Analytics Strategy. This strategy must be a subset of your overall Corporate Strategy, Vision & Roadmap. It should not be subordinated to a lesser role or criticality in the grand scheme of things.
A Business Analytics Strategy should encompass all domains of your business (as listed above), along with the 5 Pillars required to create a holistic “culture of analytics” in your organization altogether. It should take a “top-down” view and apply a “bottoms-up” approach to building it out. In most cases, this is the time when each organization must begin (if not already in place) to choose a “strategic partner” for their long-term analytics journey. In the Mid-Market space, few organizations have the internal resources, expertise or depth of knowledge to create a BA Strategy on their own. Relying on a true strategic partner for these services is the most viable approach in almost all cases and enhances the “time to value” in achieving successful analytics outcome and ultimate competitive advantage.
In my next posting “Defining your Business Analytics Strategy” I will focus on the criteria one should use in choosing a BA strategic partner and what should be contained in the BA Strategy to assure success.