In today’s economy, it’s not just about knowing, it’s also about doing. Organizations must outthink and out-execute the competition. Business analytics empowers organizations to make a difference, providing the insight and understanding to support fact-based decisions and confident actions – and providing the feedback that is needed to create a learning organization.
What is Business Analytics?
According to IDC, business analytics refers to the software used to access, transform, store, analyze, model, deliver and track information to enable fact-based decision making – and extend accountability – by providing all decision makers with the right information, at the right time, using the right technology.2
Organizations use business analytics to gather and interpret data in order to make better business decisions and optimize business processes. Ultimately, business analytics enables executive leaders to transform data into a competitive advantage – enabling strategic decisions that ultimately optimize performance. At the highest levels of organizations – across all industries – business analytics addresses the needs of executives faced with the unique challenges of a volatile economy, regulations, talent shortages and increased competition.
Where Does Analytics Fit In?
As a main component of business analytics, analytics is defined as the extensive use of data, statistical and quantitative analysis, explanatory and predictive modeling and fact-based decision making. Many organizations already use analytics in some form. Operating metrics and performance gauges, such as the balanced scorecard, are familiar to most managers. However, only a handful of companies are using analytics as a foundation for their business strategies.
Accenture’s research finds that high-performance businesses – those that substantially outperform competitors over the long term and across economic, industry and leadership cycles – are twice as likely to use analytics strategically, compared with the overall sample, and five times more likely to do so than low performers.3 For top companies such as Marriott International, Harrah’s Entertainment, Capital One, Amazon.com, Netflix and the Boston Red Sox, business analytics creates a competitive advantage.
What the Future Holds
“Results from the Accenture report, Competing Through Business Analytics, based on a survey of more than 250 executives’ use of and investment in analytics to remain competitive, show that business analytics prowess will be a high priority in the boardroom in 2009 and beyond,” said Royce Bell, Chief Executive Officer of Accenture Information Management Services. "While executives understand that companies with enterprisewide business analytics have an advantage over those still relying on nebulous sources to make decisions, they face institutional challenges to reforming their processes across the board. Leading organizations are moving from a siloed approach to more inclusive information management programs that work across the entire company."1
If you strive to become a high-performance organization, but you face resource and performance challenges, look no further than to the exceptional organizations that are leveraging their data through business analytics – and turning out remarkable, consistent results. As Performance Through Knowing by the Concours Group states, "analytics is the new frontier of management science and practice, and winning companies know they must use sophisticated data-collection technology and analysis methods to wring every last drop of value from their most important business processes."
1 As part of a survey to gauge the challenges related to business analytics adoption and the anticipated future investments in information management systems to garner advanced data analysis capabilities, Accenture conducted a quantitative online survey in July 2008 of 254 executives with the title of manager or higher at companies with reported revenue of more than $500 million in calendar year 2007. Respondents were from a variety of industries, with those working in education, government, or nonprofit or trade associations excluded. The survey was part of the ongoing work of Accenture Information Management Services, which is focused on integrating and managing all the diverse information assets necessary to plan and run a high-performance organization.
2 Accenture's Blog on Accelerating High Performance Business: April 2007, posted by Jeanne G. Harris, Executive Research Fellow and Director of Research at the Accenture Institute for High Performance Business
3 White Paper: The Case for Investing in Business Analytics Technology; sponsored by SAS; written by Dan Vesset and Henry D. Morris, IDC, February 2009
