Analytics: The New Path to Value
October 24, 2010
How the smartest organizations are embedding analytics to transform insights into action
Some executives remain overwhelmed by the well-documented “data deluge” – 60% still say they “have more information than we can effectively use.” But research now shows that leaders of the smartest organizations have moved past “overwhelmed” and are already capitalizing on increased information richness and analytics to gain measurable competitive advantage.
How are they doing it? In what ways are top-performing companies exploiting data that their competitors are not? What pivotal new management practices are emerging as organizations figure out not only how to know more about their businesses, but how to act on those insights from the highest levels of strategy-making to the day-to-day front lines?
To answer those questions and more, the MIT Sloan Management Review in collaboration with the IBM Institute for Business Value conducted a global survey of nearly 3,000 executives, as well as in-depth interviews with leading researchers. This MIT Sloan Management Review Special Report is the result.
HIGHLIGHTS
- Top performers view analytics as a differentiator
- The biggest obstacle is not the data
- Where are the leaders headed? Toward making information “come alive”
Read the Report
- Executive Summary
- Findings of The New Intelligent Enterprise Study
The competitive push for analytics-driven management; why top performers say analytics is a differentiator; the three levels of capabilities; why data is not the biggest obstacle; how information must become easier to understand and act upon; and what leaders can do to make analytics pay off – a new methodology
- The Five Recommendations
- Recommendation 1: Focus on the biggest and highest value opportunities
- CASE: Tackling healthcare fraud leads to sweeping reforms
- FOCUS: Introducing the PADIE technique for operationalizing analytics
- Recommendation 2: Within each opportunity, start with questions, not data
- CASE: Shifting gears from vehicle-centric to customer-centric marketing
- Recommendation 3: Embed insights to drive actions and deliver value
- CASE: A beverage company makes the case
- Recommendation 4: Keep existing capabilities while adding new ones
- CASE: Bridging business and analytics skills across the organization
- Recommendation 5: Use an information agenda to plan for the future
- CASE: Insurer limits risk by establishing an agenda for today and tomorrow
- FOCUS: How analytics propagates across functions
- How to Set Yourself Up for Success
Techniques to get started; make analytics pay off
- About the Research
About the Research
To understand the challenges and opportunities associated with the use of business analytics, MIT Sloan Management Review, in collaboration with the IBM Institute for Business Value, conducted a survey of more than 3,000 business executives, managers and analysts from organizations located around the world. The survey captured insights from individuals in 108 countries and more than 30 industries, and involved organizations of various sizes. The sample was drawn from a number of different sources, including MIT alumni and MIT Sloan Management Review subscribers, IBM clients and other interested parties.
In addition to these survey results, we also interviewed academic experts and subject matter experts from a number of industries and disciplines to understand the practical issues facing organizations today. Their insights contributed to a richer understanding of the data, and the development of recommendations that respond to strategic and tactical questions senior executives address as they operationalize analytics within their organizations. We also drew upon a number of IBM case studies to illustrate further how organizations are leveraging business analytics and illuminate how real organizations are putting our recommendations into action in different organizational settings.
- Acknowledgements & Related Publications
- The Survey — Questions and Responses
Questionnaire and overall results of the 2010 New Intelligent Enterprise Global Executive Survey
Authors
Steve LaValle is the global strategy leader for IBM’s Business Analytics and Optimization service line, where he leads a global team of consultants and practitioners focused on helping clients
optimize their results through the application of insights, analytics and business process improvements.
Michael S. Hopkins is editor-in-chief of MIT Sloan Management Review, which brings ideas from the world of thinkers to the executives and managers who use them to build businesses.
Eric Lesser is the research director and North American leader of the IBM Institute for Business Value, where he oversees the fact-based research IBM undertakes to develop its thought leadership.
Rebecca Shockley is the business analytics and optimization global lead for the IBM Institute for Business Value, where she conducts fact-based research to develop thought leadership for senior executives.
Nina Kruschwitz is an editor and the special projects manager at MIT Sloan Management Review, where she coordinates the publication’s editorial and innovation hub activities.
Contributors
Fred Balboni, GBS Global Leader: Business Analytics and Optimization (BAO), IBM
Dr. Michael Haydock, GBS Global Leader: Customer Analytics, IBM
Deborah Kasdan, Writer: GBS Corporate Communications, IBM
Christine Kinser, Global Leader: GBS Strategic Communications, IBM
Katharyn White, Vice President of Marketing, IBM
For more information about this study and related interviews, see The New Intelligent Enterprise.