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Posted on 11/23/2009 by Don Ryan

Analytics Is Not Enough
A number of popular business books have been written recently about the power of analytics to improve business performance, including Competing on Analytics, the New Science of Winning by Thomas H. Davenport and Jeanne G. Harris and Super Crunchers by Ian Ayres. These books are very good primers on the topic, are easy-to-read, chock full of case examples, and in the end, make a compelling argument. So compelling in fact, that it is hard to imagine any business leader who would try to make a counter argument.

Nonetheless, I would highly doubt that anyone could claim that the bulk of American business is trying to “compete on analytics,” to use Dr. Davenport’s catchy phrase. In the field of marketing, for instance, with which I am most familiar, I would guess that fewer than half the companies you’d survey would say they are high on the Davenport Analytic Competitor scale. Probably much fewer than half.

Evidence-Based Decision Making
In my view, the problem isn’t with the analytics, but with the lack of a rigorous structure in these companies to make “evidence-based” decisions. Yes, sometimes there will be a lack of investment in analytics that will leave a company virtually guessing about what to do. This is just being short-sighted. But sadly, even when large sums are spent on analytics it is often the case that the analytics are not used to their fullest extent to help the company make better decisions. The analytics are developed, but they are never aired to the appropriate decision making audience.

Consequently, you could say that to compete on analytics a company has to not only invest in analytics, but also invest in a structured, evidence-based decision making process. These are the necessary and sufficient conditions for true analytic competitors.

We’ve found there are four critical components to institutionalizing an evidence-based decision making process. They involve answering these questions:
  1. What are the key decisions that need to be made?
  2. What information is needed to make these decisions?
  3. Who will make the decisions and how will the decisions be made, and
  4. How will the decisions be implemented?
A lot more can be said about this topic, but for now I’d like you to contemplate your organization, or the ones you work with, and think about if and where their efforts to be an analytic competitor break down or fall short of the mark.

To provide your views on the subject. Simply click the designated button below. For more information about marketing analytics, visit our website at www.iknowtion.com.
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Posted by on 11/23/2009 2:31 PM
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