Analytics Held Up By People More Than Tech

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November 10, 2011 – Early adopters of analytics are racing ahead of basic users in terms of competitive advantage, with organizational hindrances providing the biggest integration stumbling block, according to new findings in a survey from MIT and IBM.

The report, “Analytics: The Widening Divide,” is based on survey responses from more than 4,500 administrators and analysts from 30 industries across 120 countries conducted by MIT’s Sloan Management Review and IBM’s Institute for Business Value. It builds on information from a survey released in 2010 by the two organizations entitled “Analytics: The New Path to Value.”

In all, 44 percent of organizations reported organizational barriers, such as resistance to new competencies or ideas, as their primary barrier for full analytics adoption and integration, according to the report. Concerns with advancing technology was paramount for 24 percent of respondents.

David Kiron, executive director for MIT Sloan Management Review, said delivering analytics that provide business returns takes a three-tiered organizational approach.

"We've found that there are three legs to the competitive analytics stool: a data-oriented culture, information management competency, and analytics expertise," Kiron said in a news release on the updated survey.

Researchers split organizations’ analytics capabilities into three categories: aspirational, or basic users; experienced users; and transformed users, or those with the most advanced functionality. Compared with last year’s survey, 23 percent more of transformed organizations in 2011 reported a competitive advantage with analytics, and experienced organizations notched a 66 percent jump over their competition. By contrast, 5 percent fewer aspirational organizations in 2011 found competitive advantage from analytics than in 2010.

Most organizations use analytics to manage financial and operational activities, though the analytics carry the same importance across other areas of the business. Only one-half of transformed organizations rely on analytics for decisions on customers, business strategy and human resources, and less than 25 percent of aspirational organizations apply analytics in that way.

Transformed organizations are distinguished most from others using analytics because of proficiency reported in areas such as: ability to analyze, capture and aggregate data; business culture open to ideas; analytics as part of a core business strategy; embedding of predictive analytics; and the availability of insights from data.

To access the full report, click here.

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