Become An Analytics Competitor
Aug 13, 2015
Business Intelligence and Analytics Programs can be found in many organizations today. A Gartner Survey reveals that 73 percent of organizations have invested or plan to invest in Big Data by 2016. While this is a great trend, organizations find themselves at vastly different maturity levels in terms of the analytics they are performing, the tools they are using, the people they are employing, and the organizational structure they have put behind all of this.
Commonly, companies believe they are performing at a higher level than they actually are. To help pinpoint where your company actually resides in the world of competitive analytics, we have enhanced a grid found in “Competing on Analytics: The New Science of Winning,” that serves as a template of measurement. With this knowledge, you will be able to construct a plan that allows you to become “analytical competitors.” (as referenced in the BI Maturity Model below) This will lead to increases in operational efficiency, competitive market share, and the overall profitability of your business.
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So, how do we go about measuring your organization against this model?
First, it is important to understand what each stage is made up of – allowing us to gauge where segments of our business align with the model, as well as set the basis for future direction. You will then be able to ask the question: “How do we develop a plan that leads us toward being ‘Analytical Competitors’?”
The second piece, before developing a plan, deals with understanding your organization’s current analytics program – even if you believe you do not have one. Some companies believe they do not have an analytics program because they do not have a data warehouse or fancy Business Intelligence (BI) tool. But, if you are making some sort of organizational decision based on internally or externally sourced data, you have an analytics program. The key is in understanding how your organization uses analytics and how you can enhance it to gain a competitive advantage.
Ultimately, we call these two steps the Current State Assessment and its connection to the BI Maturity Model. Whether you are looking to develop an analytics program for the first time, build a data warehouse, enhance your current program, or you just want to validate your analytics, the BI Maturity Model is a good place to start.
No matter where you fall in the model, we have seen a need to review the key performance indicators (KPIs) that drive company decisions, and ultimately profitability. When implementing a set of KPIs, we need to ensure they are not set in stone. We are not saying that these are going to change on a monthly basis; instead we are saying that they should be able to quickly adapt to the social and economic environments around the business.
One success story of this was when British Airways hired an external consulting firm to review their KPIs. The findings revealed that on-time arrival and departure was even more important than financial figures. After shifting focus to these KPIs, it led to an organization change where maintenance and food contractors began servicing their aircraft efficiently, therefore making it faster to move the planes in and out of the airport. Needless to say, customers, crew and staff were all happier and all of this led to a significant increase in the revenue factors that were previously monitored.
We have also noticed that while some companies heavily integrate analytics into certain segments of their business (i.e. product), they ignore other areas like marketing or sales, which play a key role in establishing a competitive advantage. Once again, we are not saying that marketing and sales should be your primary focus, but we strongly believe that to be an analytical competitor you need to focus on the whole business, not just selective areas of it.
In addition to holding a holistic analytical approach, creating predictive analytics to detect threats or new business opportunities are often all a company needs to move past stage four and onto stage five. This assumes that while various departments exist, they are working collaboratively to swiftly pinpoint, understand and act upon the data and uncovered trends.
If you are interested in conducting a current state assessment of your company’s analytics program, or you would like to discuss the modernization of KPIs, contact us.