Top-performing companies were 15 times more likely to apply analytics to strategic decisions than their underperforming peers, according to a new IBM study of the role information-based decision making is playing in successful business strategies during the current economic cycle.
In addition, top performers were 22 times more prepared to challenge the status quo in their organisations, rethink current strategies and business processes, and aggressively apply and act on new insights derived from analytics.
The study also found that top performers were six times more likely to entrust a broader base of employees with greater authority to make decisions and act on insights.
Entitled "Breaking away with business analytics and optimisation”, the study is based on a blind survey of nearly 400 business executives globally, who rated their businesses versus peers. The study is thought to be the first major worldwide inquiry into the actual business impact of analytics.
"Our study found that over the past 18 months, top-performing businesses excelled at applying analytics and empowering their people to act on these insights. We expect these organisations will emerge from the current economic condition with a huge head start over their competitors", said Fred Balboni, Global Leader, Business Analytics and Optimisation, IBM Global Business Services. "A flood of information has created an entirely new set of assets, just waiting to be applied to clients' toughest challenges".
As part of the analysis, consultants determined top-performing organisations are able to more fully exploit business analytics for competitive advantage. "A critical part of this success is that these organisations were able to drive change by having the right management systems, tools, and culture in place -- creating, in effect, an organisation that seeks and evaluates, and is ready to act on new opportunity", said Steve LaValle, author of the study and Strategy Leader, Business Analytics and Optimisation, IBM Global Business Services.
IBM's analysis also discovered having superior data governance -- assuring that data definitions were clear, relevant and accepted -- is critical to the success for top performers. By a factor of three to one, the study found that top performers were much more sophisticated in their approach to governing organisational information relative to lower performing companies (42 percent versus 14 percent).
Overall, the survey found that a relatively few organisations have supported business analytics and optimisation at this level. IBM's consultants have determined a number of key areas where organisations looking to position themselves to break away from the competition need to focus:
- Advanced Toolsets - including predictive analytics, information visualisation and content management tools.
- Actionable Information - identifying actionable and relevant insights from the structured and unstructured information residing in and outside their enterprise.
- Putting Data to Use - connecting information to business objectives and across business functions.
- Driving business change - focusing on the people and process change, governance and organisational alignment needed to implement new analytics projects.
To successfully implement these business analytics projects, business leaders will need to drive support across their organisations. A key ally will be CIOs who seem to be in lock step with this objective according to a separate IBM study. In the recently released IBM Global CIO Study, 83 percent of CIOs identified business intelligence and analytics as their No. 1 priority to enhance their organisations' competitiveness.