Analytics: The Widening Divide

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Read the full report online or download the PDF: http://mitsmr.com/DataAnalytics2011

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  • 1. In collaboration withRESEARCHREPORT FALL 2011 FINDINGS FROM THE 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECT Analytics: The Widening Divide

2. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 1: Creating aCompetitive AdvantageThe ability of organizationsto create a competitiveadvantage with analyticshas surged in the past 12months.201158%2010 57%37% increase Percentage who rated as substantial or signicant (4 or 5 on a ve-point scale) the level that information and analytics is able to create a competitive advantage for their organization within their industry or market Massachusetts Institute of Technology, 2011 3. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 2: Analytics Sophistication AssessmentAnalytics competencies can be assessed by analyzing keyattributes as they relate to the organization, including leadersreliance on fact-based decision making. Massachusetts Institute of Technology, 2011 4. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 3: Increasing Competitive AdvantageThe ability of organizations to create a competitiveadvantage with analytics has surged in the past 12months. 201180%Transformed 201065% 23% increase 2011 63%Experienced 201038% 66% increase 201137%Aspirational 2010 39% 5%decrease Percentage who cited a competitive advantage using analytics Massachusetts Institute of Technology, 2011 5. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 4: Increasing Analytic Integration Into Strategy and OperationsThe rate at which Transformed and Experienced organizations have integratedanalytics into their core business strategies and operations during the past yearindicates that the competitive and performance gaps between these organizations andAspirational organizations will continue to widen.Transformed 70%Experienced55%Aspirational 34% Percentage who reported their organization had increased the level to which analytics and information was integrated into the business strategy and day-to-day operations in the past 12 months Massachusetts Institute of Technology, 2011 6. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 5: RelianceCustomer Enhance customersoverall experiencePercentage whoon Analyticsindicated theirThe majority of Optimize the match of organization reliessales reps to customers on data andorganizations rely on analytics to executeDene marketing these activities (4 oranalytics to makecampaigns5 on a scale rangingfrom 1=Intuition/decisions aboutIdentify targetExperience tocustomers 5=Data/Analytics)nancial andoperational activities, HumanAllocate employeestime and effortsResourcesTransformedbut even Transformed ExperiencedEvaluate employeeorganizations have performance Aspirationalroom to increase theStrategic Establish organizationalstrategic objectivesuse of analytics inDevelop/rene newother areas. products or services Majority of RespondentsOperational operational Streamlineprocesses Manage supplychain or logisticsAllocateFinancialannual budget Establish nancial forecasts 0 20% 40% 60%80%Percentage of respondents Massachusetts Institute of Technology, 2011 7. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 6:Focused on theNeed for Speed inDecision MakingAn intense level offocus on the speedof makingdecisions is one Transformed 72%area whereTransformed 49% Experiencedorganizations areusing analytics. Aspirational 22%Percentage who exhibited an intense level of focuson the speed of decision making, assessed byanalyzing a series of questions Massachusetts Institute of Technology, 2011 8. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 7: Focused on Identifying andManaging Enterprise RisksThe vast majority of Transformedorganizations are intensely focused onusing analytics to better addressenterprise risks. Transformed86% Experienced 6% Aspirational0%Percentage who exhibited an intense level of focuson using analytics to better understand and manageenterprise risks, assessed by analyzing a series ofquestions Massachusetts Institute of Technology, 2011 9. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 8: Focused on CustomersTransformed organizations are intensely focusedon using analytics to create personalizedrelationships with customers.Transformed 62%Experienced 49%Aspirational34% Percentage who exhibited an intense level of focus on using analytics to better understand and connect with customers, assessed by analyzing a series of questions Massachusetts Institute of Technology, 2011 10. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 9: Analytics CompetenciesOrganizations must master three analyticscompetencies to achieve competitive advantage. Massachusetts Institute of Technology, 2011 11. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 10: Key Characteristics of a Transformed OrganizationTransformed organizations rate themselves as highly eective at each ofthe key characteristics, represented by the percentages. Ability to analyze data78% Ability to capture and aggregate data 77%Percentage ofTransformed Culture open to new ideas 77%organizationsrating themselves Analytics as a core part of business strategy and operations as highly 72%effective at each Embed predictive analytics into processesof the key 66%characteristics Insights available to those who need them65% 020%40%60% 80%100% Percentage of Transformed organizations Massachusetts Institute of Technology, 2011 12. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 11: Paths to TransformationExperienced organizations take eithera data-centric enterprise-driven pathor a skills-and-tools centric path ontheir journey toward analytictransformation.Enterprise High Transformed driven Collaborativepath InformationData-oriented managementExperienced culture prociency SpecializedpathLine-of-Low Aspirational business driven Low Analytic skills andHightools prociency Massachusetts Institute of Technology, 2011 13. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 12: Observed Competency LevelsEach path to transformation has unique strengths andweaknesses in the three competencies, which pinpointareas for improvement and investment.Observed competency levels Information management Specialized Collaborative Solid information foundation Standardized data management practices Insights available and accessible Analysis skills and tools Skills developed as a core discipline Enabled by a robust set of tools Delivers action-oriented insights Data-oriented culture Fact-driven leadership Analytics used as a strategic asset Strategy and operations guided by insightsRudimentaryMinimal Moderate SignicantMastery Massachusetts Institute of Technology, 2011 14. MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECTFIGURE 13: Respondents Who Rate These Challengesas Extremely Dicult to ResolveChanging the way people behave and interact with oneanother within an organization poses a more dicultchallenge than changing their tools or technologies.Organizational challenges44%1.8x Technology 24% more challengesdifficult Percentage who rate these challenges as extremely difficult to resolve Massachusetts Institute of Technology, 2011 15. sloanreview.mit.edu Massachusetts Institute of Technology, 2011