Are we are on the verge of an analytics revolution? Big data is shifting the way organizations make decisions because of the unique insights it offers into the previously hidden patterns of human behavior.
Companies that do the most with digital technologies are 26 percent more profitable than their industry peers, an MIT Sloan Management Review report found. In fact, 66 percent of respondents in MIT's From Value to Vision: Reimagining the Possible with Data Analytics report said they were gaining a competitive advantage from analytics.
That number was up from 58 percent in 2011, and the 2012 report found about 11 percent of the 2,500 companies surveyed were leading the way as analytical innovators. MIT partnered up with SAS Institute to intervivew companies across 24 industries, and 55 percent of respondents were executives at the VP/director level or above.
Additionally, 29 academics and IT executives were interviewed from companies including eBay, LinkedIn, PayPal, Neiman Marcus, Southern California Edison and Kaiser Permanente.
Don't be Analytically Challenged
Besides the 11 percent of innovators on top of the analytics world, the rest of those surveyed fell into the analytically challenged group (29%) or the analytical practitioners group (60%). Those who came up short usually did so because they were not able to generate any competitive advantage by using analytics, and because they did not benefit from innovation, the report found.
Overall, the analytically challenged were labeled as such because they suffered from data deficiency, a lack of collaboration, had a weak information value chain and no "burning platform." Data deficiency is just what it sounds like, and basically, those in the challenged group had lagging data management abilities.
One survey respondent brought up the notion that their data wasn't totally reliable, and any analysis of such data would be virtually meaningless. That's a slippery slope because without the tools to determine how reliable the data is, any measure of doubt about it would indeed cast analytics in a bad light.
Using analytics in different ways often separates the best companies from the laggards