Data puts focus on innovation
New research just released by MIT Sloan Management Review, reveals that the number of companies reporting a competitive advantage from analytics increased for the first time in four years. Several factors seem to be behind this shift; including, wider dispersion of analytics within companies as well as a stronger focus on specialized, innovative applications that have strategic benefits.
The new report, “Analytics as a Source of Business Innovation,” sponsored by SAS, is based on results from a global survey of more than 2,600 business executives, along with personal interviews with many senior managers. The report also finds that the companies that are the most innovative with analytics are more likely to share data.
Sharing data internally and externally
Organizations that agree that analytics helps them to innovate tend to share data both internally and externally at much higher levels than other organizations: 80% of these organizations report sharing data internally, compared with 53% of other organizations.
More than 60% of all companies surveyed in this year’s study say that some organizational tasks, once done by humans in their companies, have been automated, at least to some extent, because of analytics. “But the immediate benefits from automation have less to do with efficiency gains from eliminating jobs,” says David Kiron, executive editor for MIT Sloan Management Review and a co-author of the study. “Instead, automation is liberating managers so that they can focus on more interesting strategic-oriented tasks or simply augmenting their ability to perform their roles.”
The study finds that several complementary trends are emerging:
- Businesses that take data seriously organize themselves around data, treating it as a valuable organizational asset. The sources of data-driven innovation draw from strong data governance practices and a propensity and ability to share data
- Data governance is a key factor in fostering innovation. The study revealed that the organizations that share data internally get more value from their analytics. In addition, the companies that are the most innovative with analytics are more likely to share data externally. The survey results show that strong data governance practices enable data sharing, which then enables innovation. To be effective, data governance must be embedded in an organization’s culture
- As organizations everywhere increase their use of analytics, differentiation will become increasingly important and, at the same time, elusive. This research indicates a rise in the number of organizations gaining advantage through analytics. But an advantage for one organization in an area means disadvantage for another. As a result, organizations may decrease activities where they are not able to gain advantage in favor of activities where they can. The upshot: analytics may help organizations narrow their strategic focus to where their advantage is strongest.
Please visit MIT Sloan Management Review to read the full report.
Latest posts by William Goddard (see all)
- Skills to List on Resume for Customer Service - August 8, 2019
- Computer Skills to Put on Your Resume - July 30, 2019
- What Is a 360 Degree View of the Customer and What Should You Do with It? - July 23, 2019