Companies are increasingly gaining competitive advantage through analytics. We see that in our work with customers across New Zealand, and it was borne out by the 2017 Data & Analytics Report by MIT Sloan Management Review.
That report – based in part on a survey of 2,602 executives, managers, and analytics professionals worldwide during 2016 – produced four key findings.
Notably, they all relate to innovation.
Quoting from the report:
- More companies report competitive advantage from their use of data and analytics, reversing a three-year trend. According to several indicators in our 2013, 2014, and 2015 surveys, fewer companies were deriving competitive advantage and other important benefits from their investments in analytics than in previous years. According to this latest survey, however, that trend seems to have reversed, and more companies are now seeing gains. This is due to several factors, including wider dispersion of analytics within companies and better knowledge of what analytics can do, as well as a stronger focus on specialised, innovative applications that have strategic benefits.
- Innovation from analytics is surging. The share of companies reporting that they use data and analytics to innovate rose significantly from last year’s survey. Organisations with strong analytics capabilities use those abilities to innovate not only existing operations but also new processes, products, services, and entire business models.
- Data governance fosters innovation. Companies that share data internally get more value from their analytics. And the companies that are the most innovative with analytics are more likely to share data beyond their company boundaries. Survey results show that strong data governance practices enable data sharing, which then enables innovation. To be most effective, data governance needs to be embedded in an organisation’s culture. Tactics are not the same as cultural norms. Data governance needs to be more than a system of tactics to derive business value — it must actually influence organisational behavior.
- Smart machines create opportunity for innovative thinking. Smart machines that draw inferences from data on their own and learn by using algorithms to discern patterns in masses of data are no longer confined to research labs and limited applications such as speech recognition. The most analytically mature companies use artificial intelligence to augment human skills and to take on time-consuming tasks, freeing managers to spend more time on strategic issues.
At Stellar, we believe in the power of data to help businesses innovate, while they optimise their operations and engage more deeply with their customers.
As just one example: Stellar was engaged by Trustpower to take the company on a journey of data-analytics improvement to support their evolving multi-product strategy. In collaboration with key business stakeholders, Stellar prototyped, architected, and led the development of a new BI platform for Trustpower using the Oracle BI toolset. Operational (3rd normal form) and Analytical (star schema) data warehouse repositories, which support everything from real-time operational analysis through to executive KPI dashboards, were built to support the business’ reporting and analytical needs.
As a result, Trustpower now has a large community of active data users invested in improving and leveraging analytics for the good of the company.
Wondering if an investment in data analytics makes sense for your organisation?