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Business Analytics for the Mid-Market (Part 3 of 4) – “Defining your Business Analytics Strategy”

February 20, 2012 — Leave a comment

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*

  1. Using Innovation to Differentiate
  2. Revenue & Profit Growth
  3. Efficiency Enhancements (along with reducing inherent costs)
The key to developing your Business Analytics Strategy is to find the entry and inflection points in your strategy’s execution where BA can be embedded and used as either a catalyst or an accelerator for success. Every Organization will have different points along its strategic journey where BA can fill such roles, but typical ones would include;
  • 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)
A successful Business Analytics Strategy fully aligns itself with all aspects (and aspirations) of the overall strategy for the Organization. Achieving successful outcomes from the BA Strategy process requires a partnership amongst all of the key stakeholders (Executives, Finance, Sales/Marketing, Engineering & Development, Manufacturing & Distribution, Support, etc.), the IT Services team (internal an/or external) and the organizations’ Trusted Analytics Partner. The value of having an Analytics Partner in this process is substantial and in the early stages of any organizations’ journey to Analytics Maturity they can make the difference between success and disappointment, much less outright failure.
Critical questions to ask/answer in your Business Analytics Strategic Planning exercise should include;
  • 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?
There are many others that you would want to consider given the breadth and scope of the organization’s strategy altogether. Your Trusted Analtyics Advisor should be well versed in your business vertical and know your organization intimately so as to guide/facilitate the Strategic Planning Process to a successful outcome.
In my final installment of this series (4 of 4), I will focus on “How to Choose your Trusted Analytics Advisor”.

* 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.

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