Analytics: The Widening Divide

In collaboration with

RESEARCH
REPORT
FALL 2011
FINDINGS FROM THE 2011 NEW INTELLIGENT ENTERPRISE
GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECT

Analytics:
The Widening Divide

MIT SLOAN MANAGEMENT REVIEW 2011 NEW INTELLIGENT ENTERPRISE GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECT

FIGURE 1: Creating a
Competitive Advantage
The ability of organizations
to create a competitive
advantage with analytics
has surged in the past 12
months.

2011 58%
2010 57%
37%
increase

Percentage who rated as “substantial” or “signiﬁcant”
(4 or 5 on a ﬁve-point scale) the level that information and
analytics is able to create a competitive advantage for
their organization within their industry or market

© Massachusetts Institute of Technology, 2011


FIGURE 2: Analytics Sophistication Assessment
Analytics competencies can be assessed by analyzing key
attributes as they relate to the organization, including leaders’
reliance on fact-based decision making.



FIGURE 3: Increasing Competitive Advantage
The ability of organizations to create a competitive
advantage with analytics has surged in the past 12
months.

2011 80%
Transformed
2010 65% 23%
increase

2011 63%
Experienced
2010 38% 66%
increase
2011 37%
Aspirational
2010 39% 5%
decrease

Percentage who cited a competitive
advantage using analytics



FIGURE 4: Increasing Analytic Integration Into Strategy and Operations
The rate at which Transformed and Experienced organizations have integrated
analytics into their core business strategies and operations during the past year
indicates that the competitive and performance gaps between these organizations and
Aspirational organizations will continue to widen.

Transformed 70%

Experienced 55%

Aspirational 34%

Percentage who reported their organization had
increased the level to which analytics and
information was integrated into the business strategy
and day-to-day operations in the past 12 months



FIGURE 5: Reliance Customer Enhance customers’
overall experience Percentage who
on Analytics indicated their
The majority of Optimize the match of organization relies
sales reps to customers on data and
organizations rely on analytics to execute
Define marketing these activities (4 or
analytics to make campaigns 5 on a scale ranging
from 1=Intuition/
decisions about Identify target Experience to
customers 5=Data/Analytics)
financial and
operational activities, Human Allocate employees’
time and efforts
Resources Transformed
but even Transformed Experienced
Evaluate employee
organizations have performance Aspirational

room to increase the Strategic Establish organizational
strategic objectives
use of analytics in
Develop/refine new
other areas. products or services
Majority of
Respondents

Operational operational Streamline
processes

Manage supply
chain or logistics

Allocate
Financial annual budget

Establish
financial forecasts

0 20% 40% 60% 80%
Percentage of respondents



FIGURE 6:
Focused on the
Need for Speed in
Decision Making
An intense level of
focus on the speed
of making
decisions is one
Transformed 72%
area where
Transformed 49%
Experienced
organizations are
using analytics. Aspirational 22%

Percentage who exhibited an intense level of focus
on the speed of decision making, assessed by
analyzing a series of questions



FIGURE 7: Focused on Identifying and
Managing Enterprise Risks
The vast majority of Transformed
organizations are intensely focused on
using analytics to better address
enterprise risks.

Transformed 86%

Experienced 6%

Aspirational 0%

on using analytics to better understand and manage
enterprise risks, assessed by analyzing a series of
questions



FIGURE 8: Focused on Customers
Transformed organizations are intensely focused
on using analytics to create personalized
relationships with customers.

Transformed 62%

Experienced 49%

Aspirational 34%

on using analytics to better understand and connect
with customers, assessed by analyzing a series of
questions



FIGURE 9: Analytics Competencies
Organizations must master three analytics
competencies to achieve competitive advantage.



FIGURE 10: Key Characteristics of a Transformed Organization
Transformed organizations rate themselves as highly eﬀective at each of
the key characteristics, represented by the percentages.

Ability to analyze data
78%
Ability to capture and aggregate data
77% Percentage of
Transformed
Culture open to new ideas
77% organizations
rating themselves
Analytics as a core part of business strategy and operations as highly
72%
effective at each
Embed predictive analytics into processes of the key
66% characteristics
Insights available to those who need them
65%

0 20% 40% 60% 80% 100%
Percentage of Transformed organizations



FIGURE 11: Paths to Transformation
Experienced organizations take either
a data-centric enterprise-driven path
or a skills-and-tools centric path on
their journey toward analytic
transformation.

Enterprise
High Transformed driven
Collaborative
path
Information Data-oriented
management Experienced culture
proﬁciency
Specialized
path Line-of-
Low Aspirational business
driven

Low Analytic skills and High
tools proﬁciency



FIGURE 12: Observed Competency Levels
Each path to transformation has unique strengths and
weaknesses in the three competencies, which pinpoint
areas for improvement and investment.

Observed competency levels
Information management Specialized Collaborative
Solid information foundation
Standardized data management practices
Insights available and accessible

Analysis skills and tools

Skills developed as a core discipline
Enabled by a robust set of tools
Delivers action-oriented insights

Data-oriented culture

Fact-driven leadership
Analytics used as a strategic asset
Strategy and operations guided by insights
Rudimentary Minimal Moderate Signiﬁcant Mastery



FIGURE 13: Respondents Who Rate These Challenges
as Extremely Diﬃcult to Resolve
Changing the way people behave and interact with one
another within an organization poses a more diﬃcult
challenge than changing their tools or technologies.

Organizational
challenges 44%
1.8x
Technology 24% more
challenges difficult

Percentage who rate these challenges as extremely
difficult to resolve


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Analytics: The Widening Divide

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