First Look: The second annual New Intelligent Enterprise survey

MIT Sloan Management Review conducted a large scale global survey of 4,000 executives, managers and analysts from a wide range of industries. The theme of this 27 question survey was Analytics, with a somewhat broader scope. Nina Kruschwitz, MIT Sloan Management Review’s managing editor and special projects manager, published a few interesting trends in the preview, with the full report due in Fall this year.

1. Access to Data needs Improvement: Only about 4 in 10 respondents have access to the information they want either to a great extent or completely. The majority are less satisfied with their information access — and almost 1/5 either have limited or no access to the data they need to succeed in their jobs
2. Consistency is key: Organizations are concerned that the quality of the data they use in decision making is consistent. It may be more important to have uniformly consistent data quality across the organization, rather than perfect data from one business unit and poor quality data from another
3. Walk the Talk: respondents want leaders to practice what they preach. If the organization’s leaders make fact-based decisions themselves, in service of the organization’s long-term vision, and demonstrate a willingness to share data across silos, will the rest of the organization be more willing to do the same
4. Organizations unsure how to use data: Organizations continue to struggle to understand how to use analytics to improve the business and to find the time to figure it out. Many of the challenges relate to organizational politics such as who owns the data and who has access to it
5. Not easy to integrate data: The top two challenges that organizations have in using analytics effectively are reminiscent of the challenges that companies have always cited for using business information. Integration is never an easy task, and as organizations take on bigger, bolder goals, the complexity can be overwhelming
6. Primary Business Objectives have not changed: While the top three business objectives remain the same this year compared with last, their order has changed. In 2010, innovating to achieve competitive differentiation was number one; this year it’s growing revenue. There also seems to be a new focus on expansion: Penetrating new markets and acquiring new customers are getting more attention than squeezing more out of what you already have (such as workforce performance or operating speed)
7. Technology is not the problem: Respondents believe that organizational or cultural challenges are almost twice as hard to solve as technological issues. That suggests that leaders have their work cut out for them — and underscores the need for leaders to practice what they preach before the organization is able to use analytics most effectively.

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A web site and print magazine published at the MIT Sloan School of Management, MIT Sloan Management Review’s mission is to lead the conversation among thinkers, professors, and managers about the coming sea changes in management practice that will transform how people innovate and lead.

Indus Insights is a specialized consulting firm that assists organization in leveraging analytics to drive business performance. They use state-of-the-art mathematical and statistical techniques to unlock game-changing insights hidden in data; and then translate these insights into actionable strategies.

Book Review: Competing on Analytics

I recently read an interesting book that resonates with the soul of Indus Insights – “Competing on Analytics: The New Science of Winning” by Tom Davenport and Jeanne Harris. The essence of the book is that analytics is the cornerstone of sustainable competitive advantage in today’s business environment. The authors foresee fact-based decision making playing a central role in future business competition; and I couldn’t agree more.

Overall, the book is divided into two parts – one addresses the “Who”, “What”, and “Why” and one discusses the “How” of analytical competition. Part One exemplifies the nature of analytical competition and illustrates how it is key to business success in today’s economies. The authors persuasively put forth their argument through existing research, success stories and the results of their own surveys. Part Two highlights the ingredients and recipe for developing analytic sophistication. Picking on themes from the book, this article is a glimpse inside the toolkit of an organization that embraces analytics:

An Enterprise Approach - The authors champion the use of Analytics through success stories of Capital One, Harrah’s, Marriott, Progressive Insurance, Amazon, Vertex, Cemex, Netflix, UPS, etc. Rigorous quantitative techniques pervade all business functions within these organizations, including Human Resources and Marketing. As referenced in “Good to Great”, the power of "breakthrough results come about by a series of good decisions, diligently executed and accumulated on top of another".

The Right People – You are your people. The culture of analytical thinking has to be inculcated in employees across all rungs of the corporate ladder. Executive sponsorship is key to spreading analytical orientations throughout the company. Senior executives need to be passionate about fact-based decision making and lead by example; Managers need to emphasize the value of analytical problem solving by basing decisions on hard facts; and Talented employees with strong analytical skills are required to drive the development of analytical programs.

Core Competency – Large US Airlines were “pioneers in adopting analytical approaches”, but were unable to overcome other hurdles, such as obsolete business models. An organization cannot outperform its peers based solely on its systematic and extensive application of analytics. The analytics have to be in support of a strategic, distinctive capability – because without one, there is no clear activity for analytics to support.

Technology – Competing on Analytics is often seen synonymous with competing on technology. Now that data has become such a commodity, the frontier for using data has shifted dramatically. Now, having data to analyze is a start, but it needs to be harnessed through business intelligence software, computing hardware and reliable data warehousing tools to squeeze out more insights.

The book makes a compelling argument for adopting fact-based decision making; but more discussion on some pitfalls would have been welcome:

1. Managers must keep sight of the tradeoff between the cost of gathering evidence (such as time to market) and the evidence's importance to the decision making process.
2. The value of “Gut Feel” must not be undermined in light of the broad generalizations or concrete examples accompanying the book. Analytic strategy is not a fact-versus-intuition debate. Rather, leaders need to consult their experience to understand the evidence in all its forms.

Most of the supporting anecdotal evidence is that of large companies. However, mid-sized, small-sized and entrepreneurial businesses can also leverage analytics to drive business strategies. Of course, building in-house capabilities is a demanding initiative that comes with high fixed costs and can distract from key priorities. This is why business leaders are increasingly partnering with consulting firms to address the challenge.

Some companies have built their very businesses on their ability to collect, analyze and act on data. Every company can learn from what these firms do. – Thomas H. Davenport

Demographic Shifts present Opportunities and Challenges

Actuaries are some of the most successful analytics practitioners when it comes to predicting future events in very specific or individual ways, so this article describing the difficulties many actuaries are having given demographic shifts and the mercurial economic climate reminds me that my own analytics ideas, whether “standard” for all projects or custom tailored to a specific model, should be reviewed and where necessary revised.

Many models I have built have excluded age as a discreet or continuous independent over concerns regarding sensitivity to outliers (sometimes it is however include with grad decade as a proxy). This article presents some interesting information that while I already knew, had never considered in respect to my work: U.S. population is working longer, pushing retirement age higher and higher.

The implications I believe are both explicit and implicit. Directly, the trend towards working longer may necessitate a change in traditional assumptions of major gift work. Often there are general demographic “sweet spots” in age, relatively consistent from institution to institution. Certainly donors in their 70’s and 80’s have different giving behavior than those in their 30’s and 40’s. You may consider these “stages” in a donor’s life where they may have different attitudes towards making a major gift, or a planned gift, etc.

I have not observed a “rule of thumb” regarding major gifts and retirement age. Some individuals like to give while still working full time, others wait until retirement “settles in”, and some even use a major gift as a “kick off” to their transition from employment to retirement. American’s working longer on average impacts all three phenomenons.

Less directly, it may be important to consider the effect of older Americans working longer on younger generations of the American work force. Certainly with a glut of highly experienced employees choosing to remain past the average age for retirement, it may be suppressing the career growth opportunities of younger generations. The boomers will retire however, and this may also produce a vacuum effect of leadership and experience. Younger generations, who may have felt stalled by the logjam “at the top” may suddenly find themselves advancing at a rate greater than predecessors.

Maybe its time I reconsider how to use this most consistent and measureable longitudinal variables in my work.

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Indus Insights is a specialized consulting firm that assists organization in leveraging analytics to drive business performance. They use state-of-the-art mathematical and statistical techniques to unlock game-changing insights hidden in data; and then translate these insights into actionable strategies.

EMPI B-School launches first PG program in Business Analytics and Research

Trained, competent professionals in analytics, research, and management are very much in demand. To meet this demand, the Vittal Center for Management developed a Post Graduate Program in Business Analytics and Research (PGP-BAR).

The PGPBAR+MBA program will be held under the chairmanship of N. Vittal (enabler of IT and Telecom revolution in India). Leading organizations have joined hands to support the program and will be recruiting students for summer internships and final placements.

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EMPI Business School was founded in 1995 and is well respected in India. It was recently (2009) ranked amongst the top 25 b-schools in India.

Indus Insights is a specialized consulting firm that assists organization in leveraging analytics to drive business performance. They use state-of-the-art mathematical and statistical techniques to unlock game-changing insights hidden in data; and then translate these insights into actionable strategies.