CAMBRIDGE, Mass., March 5 — New research released today by MIT Sloan Management Review and SAS reports that 67% of companies surveyed say that they are gaining a competitive advantage from their use of analytics, up 15% from last year, and 80% from two years ago.
The report, "From Value to Vision: Reimagining the Possible with Data Analytics," from a global survey of more than 2,500 business executives, also identifies a group of companies leading the way in the analytics revolution — "Analytical Innovators." Companies in this category report both strong competitive advantage and improved innovation from analytics. Analytical Innovators are likely to exhibit three characteristics: a shared belief that data is a core asset; more effective use of more of their data for faster results; and support for analytics by executives.
Another important characteristic of Analytical Innovators is their report of power shifts in their organizations. The more an organization uses analytics to build competitive advantage and to innovate, the more likely it is to say analytics has shifted its power dynamics. Analytical Innovators are four times more likely to say that analytics has shifted the power structure within their organizations than less analytically inclined companies.
"This is a significant finding, in that power shifts can be disruptive. They often call into question experience and intuition that managers and employees have built up over years," said David Kiron, executive editor for MIT Sloan Management Review. "Now, those who know how to marshal the data and put analytics behind their decision making are in a position of advantage."
The study identified two levels of sophistication below the Analytical Innovators. Analytics Practitioners, which represent 60% of respondents, have made progress in their analytics journey, but have not achieved the competitive advantage and innovation from analytics that the top tier has. The Analytically Challenged, 28% of survey respondents, are less mature in their use of analytics and have not been able to derive as much value from it as the other groups.
"As we studied all three groups, we were able to clearly see the specific differentiators among the groups," said Pamela Prentice, chief research officer for SAS. "This enabled us to develop a framework for companies to evaluate their own standing, and to provide recommendations based on a company's current status."
The study's recommendations for the Analytically Challenged include:
- Start improvements at the local level before trying to address organization-wide issues of technology latency.
- To further collaboration, build ongoing relationships, facilitate discussions and share information of value to other departments.
- Fight inertia by developing an executive communication strategy for your analytics use case, including ROI and recommended actions.