Since the 2007 publication of Tom Davenport’s book Competing on Analytics: The New Science of Winning, businesses have become sold on the notion that they must make use of their data to derive insight. Many organizations have jumped on the analytics bandwagon in recent years. In fact, according to a recent survey by Bloomberg Businessweek, 97 percent of companies with revenues of more than $100 million are using some form of business analytics, up from 90 percent just two years ago.
But while businesses have warmed to the idea of fact-based decision making, a steep learning curve remains. Only one in four organizations believes its use of business analytics has been “very effective” in helping to make decisions. This is a far cry from the competitive edge promised in all the hype around analytics, clearly raising the question: Is business analytics overrated?
A Bloomberg Businessweek Research Services study, conducted among 930 businesses across the globe in various industries, provides insight into the current state of business analytics in today’s organizations. It also examines the challenges companies face when using analytics, and explores tactics favored by companies that have succeeded in using analytics more effectively than their peers.
The following are research insights about the current state of business analytics:
- Business analytics is still in an “emerging stage.” While business analytics has gone mainstream, most organizations still rely on traditional technology. Spreadsheets are the No. 1 tool used for business analytics.
- Organizations are proceeding cautiously in their adoption of analytics. Use of business analytics within companies has grown over the past year, but at a moderate rate. Analytics also tends to be used narrowly within departments or business units, not integrated across the organization.
- Intuition based on business experience is still the driving factor in decision making. Analytics is used as part of the decision process at varying levels, depending on the organization.
- Companies are looking to analytics to solve big issues, with the primary focus on money: reducing costs, improving the bottom line and managing risks.
- Data is the No. 1 challenge in the adoption or use of business analytics. Companies continue to struggle with data accuracy, consistency and even access.
- Many organizations lack the proper analytical talent. Businesses that struggle with making good use of analytics often don’t know how to apply the results.
- Culture plays a critical role in the effective use of business analytics. Companies that have built an “analytics culture” are reaping the benefits of their analytics investments.
Read the full white paper The Current State of Business Analytics: Where Do We Go from Here?