Analytics or Business Intelligence (BI) are necessary to help companies achieve a better strategy and execution in order to reach desired goals, manage effectively, and ultimately succeed sustainably. But to find the right application for analytics, every business must take an architected approach to identifying, designing, and realizing the value potential from such applications.

Since, “Analytics” is a broad topic, let’s first define three major types of analytics regarding:

  • Market Trends: Market-centric analytics allow you to identify economic trends, understand where the market is heading, and how social behaviors are changing. It helps an organization to determine market relevancy in a continuously changing global climate.  Rachel J. Dreyfus, vice president of marketing intelligence at Time Warner Cable, said the company is “more closely tying our insights to marketing analytics to develop compelling, persuasive and intelligent stories that guide business decisions with confidence.”  She says the efforts have helped Time Warner boost its customer appreciation efforts.
  • Business Ecosystems: Analytics gathered from your business partners, supplier base, and customer base provides insights into market positioning, business model, and product/service impact.  It allows an organization to investigate its current state. Losing market share to rivals AT&T and Verizon Wireless, T-Mobile is analyzing customer data (such as current plan rates, the number of family plans versus individual plans, credit ratings, network usage metrics, and statistics that compare the amount of talking time with the amount of texting time) to better understand and address consumer needs. The carrier then segments the customer base and creates targeted campaigns for different types of consumers.
  • Key Capabilities: From supply chain to sales tracking to partner management, these types of analytics relate to the functional areas of an organization, including cost effectiveness, efficiency and interactions with suppliers, customers, and partners.  Auto parts supplier Dana Holding Corp. conducts a financial-risk analysis of new suppliers to better evaluate and manage supplier risk in response to economic woes and natural disasters that impacted the industry. Dana buyers are required to develop risk-mitigation plans for suppliers viewed as medium or high risk. Dana, which has an in-house analytics group, also examines its established supplier relationships.

Analytics should allow an organization to gain the intelligence needed to grow and sustain long-term success. However, finding the best analytics for your business can be daunting. Regardless of a specific situation, the following four key steps should be considered to evaluate potential application for Analytics:

1. Assess: Closely examine your strategy, business model, and operations model from the perspective of your current market position. Next, articulate market trends and analyze the impact on your partners, suppliers, and customers. Finally, evaluate your own ability to execute, focusing on your enterprise assets and structure, management capability and operational practices. 360 degree assessments such as these are essential to focus analytics on the areas of the business that can drive substantial impact.

2. Create Advancement Roadmap: Your roadmap must accomplish two key objectives: 1) define the execution path to implement the analytic capabilities defined in the previous step (implementation);  2) define the steps necessary to ensure that you are able to drive value from the execution (readiness). Both types of roadmaps are required, for it is the combination of analytics and the ability to leverage them that creates a business result.

3. Create Multiple Scenarios:  Roadmaps define a path to the future; scenarios are detailed blueprints of alternative future states. Each scenario is developed to a level of detail so that the dependencies among the strategy, business model, operating model and supporting technology can be understood before making the often costly investments necessary to build an analytics capability.

4. Manage the Execution Process: Execution has two critical components: program tracking and value realization, just as a roadmap has two aspects: readiness and implementation. Program tracking is the familiar exercise of project management, ensuring that a result is on time and on budget. Value realization involves comparing the business results achieved to those envisioned in the scenario.

Driving business value from analytics requires a long-term perspective. Each step builds on previous results, as new analytic intelligence reveals opportunities for new business capabilities to drive value. Successful organizations continue to demonstrate the benefits of such a comprehensive, sustainable approach to business intelligence.

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