As the age old idiom goes, the early bird gets the worm and the early adopter gets the break. New technologies give clear advantages to those organisations that figure out before their early-adopting competitors how to use them effectively, an advantage that recedes as others catch up, and the technology becomes mainstream.
Whether it’s the invention of the spinning machine during the industrial revolution, Ford’s adoption of the moving assembly line transforming car manufacturing, or city traders feverishly gaining computing speed for millisecond long advantages – being early can be the difference between success and missing the boat altogether. Blockbuster Video, HMV, BlackBerry etc… there are a multitude of sob stories from businesses that moved too little, too late.
Analytics, while still a significant source of competitive advantage, is showing signs of having peaked as a competitive differentiator. In short, the use of analytics has become mainstream. However, what we’re now seeing is a new kind of gap emerging. Not between the adopters and the non-adopters but in enterprises’ ability to apply what they’ve adopted. The distinction is in how effectively organisations can consume analytical insights.
Working with MIT Sloan Management Review, SAS has produced a report on the barriers to creating business value from analytics. It found that the foremost barrier is not data management or complex modelling skills, but the ability to translate analytics into business actions.
To date many organisations have focused on producing analytic content, and more recently on finding effective ways to present that information through data visualisation. However, access does not automatically translate to understanding. Businesses need to get better at consuming and applying analytic insights.
According to the survey of more than 2,500 executives and analytics professionals, those organisations that reported greater use of complex analytics were also more likely to report that their companies gained competitive advantage from it.
Sophisticated analysis was taking them ahead of the pack, but also raised business-critical skills and education challenges where it outpaced managers own analytical comfort zones.
In an increasingly data driven environment, many executives find that they must make critical decisions based on analyses that use data and statistical methods that they do not fully understand. As analytical methods become more pervasive, and become even more sophisticated, this challenge will only grow. Yet these decisions still need to be made.
Laurie Miles, Head of Analytics at SAS UK & Ireland