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

Learning Opportunities

Lack of collaboration has proven to be particularly tricky for the analytically challenged because it has nearly as much to do with technology as it does company culture. Analyzing data across siloed systems is hard enough without an integrated system, so when a non-collaborating culture is involved, it seriously complicates the effort.

Those at the executive level in particular were pointed out in the report, and it's often simply self interest on executives' parts when they don't embrace analytics.

This tendency goes hand in hand with the idea that the analytically challenged in the report had no so called "burning platform." In other words, there was no compelling reason for them to dive into analytics because the way they had been doing things so far had worked pretty well. These companies are simply change resistant, the report found, and they were as much analytics apathetic as they were analytically challenged.

What Separates the Leaders

To say there are contrasting organizational styles between the analytic innovators and the analytically challenged would be putting it mildly. From the boardroom to the warehouse and across departments, the innovators simply see big data as a core asset.

Innovators think differently, and instead of talking about what analytics doesn't or can't do, they talk about how it can reimagine or rethink their businesses, the report found. Those at the top in terms of analytical use often use it to make real time decisions while the analytically challenged are more focused on reducing costs.

Furthermore, companies like LinkedIn, for example, tend to use nearly all of the data they collect, a trait often found among the analytic innovators. Naturally, these companies were generally better all along the information value chain. They were better at capturing information, and better at sharing insights with customers and partners as well.

As we mentioned above, executive support (or lack thereof) is a common theme in the adoption of analytics technology and successful implementation. What the report also uncovered was an underlying power shift within the analytics innovators that highlights this theme. The report found the innovators strongly or somewhat agree that analytics has shifted the power structure within their organization four times more than among the analytically challenged.

Among those benefiting from the shift in power are the chief marketing officers, a trend we have been following closely.

Whether in IT departments or in the c-suite, most knowledge workers likely sense the disruption being caused by big data. MIT and SAS Institute have put some real research into this phenomenon, and MIT is further studying it in a five year US$ 12 million partnership with Intel on a big data research center.

It's a fascinating issue, and one that encompasses many overlapping topics in the technology world. As technologies integrate, we wonder if analytics will keep pace or if it will catch up to the point where it drives even more integration.

Let us know in the comments if you have had success with analytics and what it has done for your company.