Competing With Data & Analytics
It is easy to aspire to analytical prowess, but far far more difficult to achieve — just ask anyone who applied their burgeoning analytics skills to picking March Madness basketball winners.
For organizations as well, there is certainly no shortage of hype about the potential for data and analytics. But the reality is that creating competitive advantage from data is elusive for many organizations.
Investigating this difficulty is the cornerstone of our 2016 report on data and analytics, “Beyond the Hype: The Hard Work Behind Analytics Success.” Building on a survey of more than 2,000 managers as well as more than a dozen interviews with executives at global companies, our research examines the reasons behind the struggle to create competitive advantage using analytics.
Our core finding? That, after increasing steadily for several years, the percentage of organizations who get competitive advantage from analytics has now declined. In contrast to a peak at 66% in 2012, this year just 51% of survey respondents report that analytics creates competitive advantage for their organizations.
Data and analytics can still provide considerable value for organizations. But there are two words in that statement to emphasize — can and value. “Can” implies potential — but not certainty. “Value” implies benefit but not necessarily advantage. Both ideas infuse our research findings.
Analytics is pervasive, affecting practically every business. But obtaining competitive advantage from it is more difficult. Advantage is not achieved just by starting an analytics program, or by collecting more data, or by talking about it. As analytics diffuses to an increasing number of businesses, it has become table stakes. It’s necessary if you’re to compete, but it’s not sufficient to ensure you’ll win.
With a decline in competitive advantage, it might be natural to assume that we’d see widespread disillusionment with analytics, or an anti-analytics backlash of some sort. Nope. Despite the decline in organizations reporting competitive advantage from analytics, considerable optimism remains. Most managers are still quite positive about the potential of analytics. They’ve seen increased interest in analytics over the past few years, and they expect its use to continue to grow in their organizations. In addition, use of analytics for innovation remains steady.
Instead, our research reveals insights into the unglamorous but necessary actions required to improve decision making with analytics.