From Data to Decisions - Moving past the Hype II
Figure 3: More Data, but Insights Have Less Effect on StrategyWhile access to useful data has increased, the ability to use insights to drive strategy continues to decline.
Respondents also noted several difficulties applying analytical insights — not using analytics to drive strategic decisions, uncertainty about how to apply analytics, and failure to act on insights. Over the years, access to useful data has continued to increase, but the ability to apply analytical insights to strategy has declined. As the volume and complexity of data grows at exponential rates, companies wrestle with how to turn the data into useful insights that can guide the business. (See “More Data, but Insights Have Less Effect on Strategy.”)
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Figure 4: Broken Links in the Information Value ChainOrganizations have made no progress in managing how they capture and integrate data or disseminate relevant insights to strategic decision makers.
This decrease in the percentage of organizations reporting a competitive advantage from analytics might suggest that analytics is losing its luster. After all, the original hype around analytics was that it helped organizations compete more effectively. In addition, now there is more data, better technology to capitalize on it, and increased focus on analytical skills. So what’s behind this dramatic drop-off?
One factor in this downward trend is the increase in adoption of analytics across the corporate landscape. As more companies develop analytic capabilities, it is becoming harder for some companies to gain an edge with analytics. “Analytics used to be a competitive advantage, but now it’s becoming table stakes,” says Steve Allan, head of analytics for Silicon Valley Bank. Surprisingly, many managers report that they are innovating with analytics at about the same rate as managers in previous surveys — suggesting that companies are using analytics to stay competitive, but are having difficulty pulling away from competitors.
Beyond the increased use of analytics among companies, there is no single source of the decline that might suggest a simple fix. Among companies not obtaining a competitive advantage from analytics, the reasons varied. (See “Difficulties Gaining an Edge With Analytics.”)