Many of the previous bases for the competition are no longer available as proprietary technologies are rapidly copied, and breakthrough innovation in products or services seems increasingly challenging to achieve. Organizations’ only option to remain competitive is to execute with maximum efficiency and effectiveness and make the smartest business possible. Analytics can support almost any business process. Therefore analytics is increasingly being embedded into their products and services.
Analytics can support almost any business process. Organizations that want to be competitive must have some attribute at which they are better than anyone else in their industry. It can be in terms of the business model, product, or service offering. Yet, organizations that have selected one or a few distinctive capabilities to base their strategies and then have applied extensive data, statistical and quantitative analysis, and fact-based decision making to support the selected capabilities are the ones who remain competitive. Analytics themselves don’t constitute a strategy, but using them to optimize a distinctive business capability indeed constitutes a strategy. Whatever the capabilities emphasized in a strategy, analytics can propel them to a higher level.
Can any organization in any industry successfully compete on analytics? is the question I frequently encounter when I meet customers. Let me share few real-world cases that drive home why one should build enterprises to compete on data.
- CEMEX, a global cement giant, has successfully applied analytics to its distinctive capability of optimized supply chains and delivery times,
- Apparel giants are repeatedly using analytics-based predictions about what clothing styles and colors might sell out this season.
- Winemakers such as E. & J Gallo apply to analyze and predict consumer preferences effectively.
- Media, Telecom giants, and SaaS players use data & analytics to prevent customer churn, identify cross-sell & up-sell, and customer lifetime value.
Analytical competition is like an arms race, requiring continual development of new measures, new algorithms, new data sources, new data transformation techniques, and new decision-making approaches. Enterprises that wholeheartedly embrace will systematically eliminate guesswork from their processes and business models. But the pivotal factor in how fast and how well an organization proceeds along the analytical path is sponsorship. Firms such as Netflix, Target, Mastercard, and UPS have CEO-level sponsorship and even passion for analytical competition that continuously innovates with new products and business models, thereby becoming leaders of the industry.