A new IBM-MIT study found that companies with advanced analytic capabilities are accelerating ahead of their analytically challenged peers. In recent years, there have been a lot of anecdotal accounts of analytics making a positive impact on business growth and now a new study of 4,500 executives provides some data points to back this up.
The global survey of executives, managers and analysts, released by MIT Sloan Management Review and the IBM Institute for Business Value, finds the information ‘haves’ — companies with in-depth experience with analytics technologies and methodologies — increasingly saw competitive advantage, and were more than twice as likely to have outperformed their analytically challenged peers over the past year.
Overall adoption of analytic capabilities has been rapidly proliferating as of late although less so in the Middle East. Fifty-eight percent of organizations surveyed in this study now apply analytics to create a competitive advantage within their markets or industries, up from 37% just one year ago, the study confirms.
Eight out of ten “Transformed” companies — those with strong, industry-leading analytics capabilities — report demonstrable competitive advantage, up 23% from the MIT-IBM survey a year ago. For “Experienced” companies — those with moderate to heavy analytics usage — there was a 66% spike in reported competitive advantage. Among the less-advanced portion of the respondents, the percentage of those with favorable competitive positions slipped over the past year.
However, there is still much, much work to be done. The study found that the majority of organizations are using analytics to manage financial and operational activities, but are less likely to rely on analytics-based insights for decisions in other key areas. Tellingly, only about half of the advanced analytics companies rely on data and analytics outside finance, to make decisions involving customers, business strategy and human resources. Fewer than 25% of the less-developed companies are using analytics in this way.
The information ‘haves’ tend to be further along in their abilities to analyze data (78%); capture and aggregate data (77%); foster a culture open to new ideas (77%); build analytics into their core business strategies and operations (72%); embed predictive analytics into process (66%); and make insights available to those who need them (65%). This last point is significant, as it suggests that two out of three of the advanced analytics companies have figured out ways to “democratize” their business intelligence and analytics to decision makers at all levels.
Interestingly the survey finds, 44% of respondents say their organizations aren’t receptive to becoming a more analytical culture. Only 24% say they don’t have access to the right technology to make it happen.
Analytics continue to somehow sit at the tail end in terms of IT investment in the Middle East although it is not hard to expect that better information will almost certainly lead to better decisions. The question is why isn’t analytics taking the lead?