This is part 1 of 10 from the 2013 Data & Analytics Global Executive Study and Research Project.
How organizations capture, create and use data is changing the way we work and live. This big idea, which is gaining currency among executives, academics and business analysts, reflects a growing belief that we are on the cusp of an analytics revolution that may well transform how organizations are managed, and also transform the economies and societies in which they operate.
Among companies, this revolution has several dimensions. First, companies have more data to use than ever before, at a volume and with a variety that are unparalleled in human history. Second, by using internal and external data, companies are beginning to understand patterns of consumer activity that had once been impossible to perceive or act upon. And third, companies are using new analytic tools and services to understand their own operations and behavior at a much finer level of detail, enabling new questions to be asked and answered.
At the vanguard of this revolution are companies that are using analytics to compete and to innovate. Understanding these companies gives insight into both the direction and the pace of the analytics revolution. Lessons about what hurdles these companies face and how they are addressing them suggest a path forward for many other companies.
As part of a multiyear research initiative, MIT Sloan Management Review is partnering with SAS Institute Inc. to better understand companies that are shaping, and are being shaped by, this analytics revolution. In 2012, we conducted a survey of more than 2,500 respondents in two dozen industries. Fifty-five percent of the respondents were executives at the vice president/director level or above. The survey included over 30 detailed questions about how organizations are using data to advance their business objectives. We also interviewed 29 academics and senior information technology executives at a diverse group of companies, including eBay, Inc., Kaiser Permanente, LinkedIn Corporation, Neiman Marcus, Inc., PayPal, Inc., PepsiCo, and Southern California Edison Company.
Fully 67% of survey respondents report that their companies are gaining a competitive edge from their use of analytics. Among this group, we identified a set of companies that are relying on analytics both to gain a competitive advantage and to innovate. These Analytical Innovators constitute leaders of the analytics revolution. They exist across industries, vary in size and employ a variety of business models. They also share a distinctive orientation toward data and analytics that includes three key characteristics:
- A widely shared belief that data is a core asset that can be used to enhance operations, customer service, marketing and strategy
- More effective use of more data for faster results
- Support for analytics by senior managers who embrace new ideas and are willing to shift power and resources to those who make data-driven decisions
This report provides an in-depth look at Analytical Innovators, including their beliefs, practices and outcomes. Our profile of this group provides insights into what success factors are currently required to excel in today’s analytics revolution. In addition, we offer a framework that shows how other companies — regardless of their analytical sophistication — can become more like Analytical Innovators.