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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.

About the Authors:

David Kiron is the executive editor of MIT Sloan Management Review’s Big Ideas initiatives. He can be reached at dkiron@mit.edu.

Renee Boucher Ferguson is the Data & Analytics contributing editor at MIT Sloan Management Review, researching the current and new analytical approaches that change how executives make decisions and innovate. She can be reached at rbfergus@mit.edu.

Pamela Kirk Prentice is the chief research officer at SAS Institute Inc., specializing in deriving insights from qualitative and quantitative information to help address key business issues. She can be reached at pamela.prentice@sas.com.


Martha Mangelsdorf, Editorial Director, MIT Sloan Management Review

Max Harless, Graphic Designer, MIT Sloan Management Review

Malene Haxholdt, Global Analytics Marketing Manager, SAS Institute Inc.


Deepak Agarwal, Director, Relevance Science, LinkedIn Corporation; Bruno Aziza, Vice President, Worldwide Marketing, SiSense Inc.; Bruce Bedford, Vice President, Marketing Analytics and Consumer Insights, Oberweis Dairy Inc.; Veronika Belokhvostova, Head, Global Business Analytics, PayPal Inc.; Antonio Benjamin, Chief Technology Officer and Managing Director, Citigroup Global Transaction Services/Institutional Clients Group, Citigroup Inc.; Marco Cardinale, Head of Sports Science and Research, British Olympic Association; Louis Datko, Senior Research Psychologist, United States Air Force Survey Office; John Eliseo, Vice President, Enterprise Content, Metadata Management, Thomson Reuters; Helen Fisher, Chief Scientific Advisor, Chemistry.com; Dan Flood, Senior Director, Go-to-Market Supply Chain, PepsiCo North America Beverages; Mandy Ginsberg, CEO, Match.com; Arnab Gupta, CEO, Opera Solutions LLC; Sam Hamilton, Vice President, Data, PayPal, Inc.; Shawn Hanna, Director, Financial Analysis, Petco Animal Supplies Inc.; Pascal Hoffmann, former Vice President, Digital Banking Strategy, Wells Fargo & Company; Michael Johnson, Director, Utility for Care Data Analysis, Kaiser Permanente; Pete Johnson, Chief Technology Officer, The Bank of New York Mellon Corporation; Raymond Johnson, Principal Manager, Demand and Price Forecasting, Energy Supply and Management, Southern California Edison Company; Steven Labkoff, Head, Strategic Programs, Research and Development Information, AstraZeneca Pharmaceuticals LP; Peter Marney, Senior Vice President, Platform and Information Strategy, Thomson Reuters Corp.; Ganesh Natarajan, Vice Chairman and CEO, Zensar Technologies Ltd.; David Norris, former CEO, BlueCava Inc.; Jeff Rosenfeld, Vice President, Customer Insight and Analytics, The Neiman-Marcus Group Inc.; Jeanne Ross, Director, Center for Information Systems Research, MIT Sloan School of Management; Arijit Sengupta, CEO, BeyondCore Inc.; Neel Sundaresan, Senior Director and Head, Research Labs, eBay Inc.; Laura Teller, Chief Strategy Officer, Opera Solutions LLC; Simon Thompson, Director, Commercial Solutions Esri, Inc.; George Westerman, Research Scientist, MIT Sloan Center for Digital Business, MIT Sloan School of Management

Portions of this article previously appeared in “Innovating With Analytics,” MIT Sloan Management Review, Volume 54, no. 1 (Fall 2012) 47-52.

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18. Respondents in Analytically Challenged companies differ demographically in subtle but important ways from other survey participants. They tend to be in less senior management positions and have a slightly higher likelihood than other survey participants to work in operational functions. These demographic differences might be a contributing factor to their evaluations of their organizations as less analytically mature.

19. The prisoner’s dilemma refers to a non-zero-sum game that shows why two people may choose to betray each other even if cooperation is in their best interest. It’s based on the premise that two isolated prisoners involved in the same crime have the independent opportunity to either collaborate with each other by remaining silent or sell the other prisoner out. Each combination of possibilities results in a different outcome, with the best for both stemming from cooperation. The sucker’s side is the prisoner who remains silent but is betrayed by the other prisoner.

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