8 business analytics essentials
Find out what business analytics can do for you
Leading banks use business analytics to predict and prevent credit fraud, saving millions. Retailers use business analytics to predict the best location for stores and how to stock them. Pharmaceutical firms use it to get life-saving drugs to market more quickly. Even sports teams are getting in on the action, using business analytics to determine both game strategy and optimal ticket prices.
They have committed to deploying their people, technologies and business processes in new ways. They have committed to a culture that is based on fact-based decisions – which helps them anticipate and solve complex business problems throughout the organization.
In Competing on Analytics, researchers Tom Davenport and Jeanne Harris demonstrate how organizations as diverse as the Boston Red Sox, Netflix, Amazon.com, Capital One, Harrah's Entertainment and Procter & Gamble are using business analytics to trump rivals. By embracing an analytical approach, these companies identify their most profitable customers, accelerate product innovation, optimize supply chains and pricing, and identify the true drivers of financial performance.
And you can too. Begin by using Davenport's 5-stage rating system to assess where you are and where you need to go:
Stage 1: Analytically impaired. Your organization is “flying blind,” plagued by missing or poor-quality data and poorly integrated systems.
Stage 2: Localized analytics. Your analytic efforts are isolated, opportunistic and function-specific. Your organization collects transaction data efficiently but often lacks the right data for better decision making.
Stage 3: Analytical aspirations. Your organization has executive support for analytics and a proliferation of business intelligence tools and data marts, but most data remains unintegrated, nonstandardized and inaccessible.
Stage 4: Analytical companies. Your organization begins to develop an enterprisewide analytics capability with high-quality data, an enterprisewide analytical plan and governance principles.
Stage 5: Analytical competitors. Your organization is routinely reaping big benefits from its full-fledged, enterprisewide analytics architecture, which is fully automated and integrated into processes.
Now that you know where you stand, get started with business analytics by taking these eight essential actions:
1. Improve the flow and flexibility of data
High-quality data must be integrated and accessible across your organization. It should also be structured in a flexible way that allows your analysts to discover new insights and provide leaders the information they need to adjust strategies quickly.
2. Get the right technology in place
Take an enterprise approach to data management and analytics to effect better decisions. Remove disconnected silos of data, technology or expertise. Your technology portfolio should include:
3. Develop the talent you need
4. Demand fact-based decisions
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TOP BENEFITS OF BUSINESS ANALYTICS
This story appears in the Second Quarter 2010 issue of