As the well-documented “data deluge” deepens, many executives have shifted from feeling overwhelmed (60% say they “have more information than we can effectively use”) to recognizing that the smartest organizations are already capitalizing on increased information richness and analytics to gain competitive advantage.
To understand better how all organizations are attempting to capitalize on information and apply analytics today and in the future, MIT Sloan Management Review in collaboration with the IBM Institute for Business Value conducted a study that included a survey of nearly 3,000 executive managers worldwide, as well as in-depth interviews with leading researchers.
Among the top-line survey findings:
Top performers view analytics as a differentiator: Top-performing companies are three times more likely than lower performers to be sophisticated users of analytics, and are two times more likely to say that their analytics use is a competitive differentiator.
The biggest obstacle is not the data: Despite the enormous challenge felt by most organizations to “get the data right,” that’s not what executives name as the key barrier to achieving the competitive advantage that “big data” can offer — the top two barriers are “lack of understanding of how to use analytics to improve the business” and “lack of management bandwidth.”
Where are the leaders headed? Toward making information “come alive”: Over the next 24 months, executives say they will focus on supplementing standard historical reporting of data with emerging approaches that convert information into scenarios and simulations that make insights easier to understand and to act on.
Based on data from our survey, case studies and interviews with experts, we have identified a new, five-point methodology for successfully implementing analytics-driven management and for rapidly creating value. This report describes that emerging methodology and its five critical recommendations.
- Focus on the biggest opportunities first. Attack one big important problem that can demonstrate value and catalyze the organization toward action.
- Start with questions, not data. Understand the problem — and the insights needed to solve it — before working on the data that will yield the insights.
- Embed insights to drive action. Ensure end-result impact by making information come to life, articulating use cases and expressing data-driven insights in ways that even nonexperts can understand and act upon.
- Keep existing capabilities while adding new ones. Even as centralized analytics oversight grows, keep distributed, localized capabilities in place.
- Build the analytics foundation according to an information agenda.