Compete in what? In your industry, your marketplace. Against who? Other companies who are using analytics to gain market advantages.
Analytics is the effort to discover and communicate useful patterns within data
Surely by now this is not news to you anymore: Companies who took the time and made the effort to discover useful information from data patterns stand the chance to use the resulting insights to corner the market, shorten sell cycles, and often times, they seem to be on top of things before the “things” are even known or popular.
So let’s talk a little bit about what has to be in place to prepare your company for the already-fiercer competition where those who are still oblivious to the potential usefulness of their business data, vs those who have focused and invested in analytics and are reaping the benefits.
(Although in the end, we know that this is not much of a competition, it’s more like watching a long-distance race between a ship without a compass vs one with a GPS system)
It’s actually very simple. When it comes to analytics, every company falls into one of these stages:
- Impaired - Severely limited insight to what is going on within the company. Lots of vague, subjective, and approximated information. Changes (both internal and external) are dealt with in reactive mode. And decisions are made based on “gut feelings”
- Localized (or “Spotty” to use a more sophisticated term) – Sporadic exercises of analytics. Usually isolated within certain departments, these efforts get no acknowledgment — let alone support — from upper-management. There is no large impact on how business is conducted, and as the result, no long term benefits.
- Coordinated - At this stage, the upper-management are onboard, and the departments start to get the support for establishing enterprise-wide metrics and analysis. Processes are tweaked based on metrics evaluations. Decision-makers have access to objective information that they need.
- Company-wide - Analytics has been absorbed into the culture, it guides the creation and maintenance of processes and systems. The company can cope with unexpected changes because everyone knows what is coming and are in the position to proactively deal with it. Decisions are made based on objective *and* timely information due to continuous access to up-to-date data.
- Competitive - The company is ready to compete for the spot of market dominance using analytics to outrun and outmaneuver competitors. At this stage, analytics is not limited to internal data, but also external trends, market swing, and the foresight on game-changing — buzzword: Disruptive — technologies or processes. This kind of power can only be materialized with a cohesive analytics effort from top-to-bottom within the company
Which one of the above stages is your company in currently?
Despite what we hear in the media today about the buzz surrounding analytics and Business Intelligence, most companies in the world are still operating within Stage 1-3.
Case in point, I regularly encounter company owners who declared that they are doing very well without all these “Data Analysis.”
Let’s think about this. The only reason the above statement is true at the moment is because most of their competitors are still operating the same way (ship without a compass). But at the rate that even small companies started to put in place processes and systems to gather metrics (data warehouses, business alerts, Truly Functional Dashboards(TM), IoT systems, API integration, etc.) things will soon accelerate towards analytical competition.
The real question is: Who is going to be the first to install the GPS on the ship? Them or their competitors?
So what a company to do? In my next post, let’s discuss what you can do to take your companies to the later stages. What sort of personnel would you need, how much coordination and buy-in would you require from the executive team and what role would that play, and lastly, what technology is available to us today and beyond.
Until next time.