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Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
Winning with Analytics: Embedding Analytics in Organizational Decision Making
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Winning with Analytics: Embedding Analytics in Organizational Decision Making

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  • For companies to gain maximum value out of Business Analytics, its important to embed analytics in the organization's decision making systems and processes, rather than treating analytics as an independent function.
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  • 1. Winning with Analytics: Embedding Analytics in Organizational Decision Making Aniket Mitra
  • 2. Strategy: A Byproduct of Competition Threat of New Entrants Bargaining Bargaining Rivalry among Power of Power of Existing Suppliers Buyers Competitors Threat of Substitute Products or ServicesThe Five Forces That Shape Industry Competition (Michael E. Porter, HBR Jan’08)
  • 3. Strategy: A Byproduct of Competition Threat of A Strategic New Entrants Choice: The Design of Your Organization Bargaining Bargaining Rivalry among Power of Power of Existing Suppliers Buyers Competitors Threat of Substitute Products or ServicesThe Five Forces That Shape Industry Competition (Michael E. Porter, HBR Jan’08)
  • 4. What is Your Organization’s Structure? Vertical Organization: Horizontal Organization: Designed for Efficiency Designed for Learning Functional with Functional cross-functional Divisional Matrix Horizontal Modular Structure teams, integrators Structure Structure Structure Structure Horizontal: • Shared Tasks, Empowerment • Relaxed Hierarchy , Few Rules • Horizontal communication , face-to-face Dominant • Many teams ,task forces and Decentralized Structural Vertical: decision making • Specialized Tasks Approach • Strict Hierarchy, Many Rules • Vertical Communication and Reporting Systems • Few Teams ,Task Forces, or integrators •Centralized decision makingSource: Organization Theory and Design by Richard L Daft
  • 5. What is Your Organization’s Structure? Organizational Horizontal Organization: Vertical Organization: Decision Designed for Learning Making: Designed for Efficiency A function of Functional with Your Functional cross-functional Divisional Matrix Horizontal Modular Structure teams, integrators Structure Structure Structure Structure Organization’s Structure Horizontal: • Shared Tasks, Empowerment • Relaxed Hierarchy , Few Rules • Horizontal communication , face-to-face Dominant • Many teams ,task forces and Decentralized Structural Vertical: decision making • Specialized Tasks Approach • Strict Hierarchy, Many Rules • Vertical Communication and Reporting Systems • Few Teams ,Task Forces, or integrators •Centralized decision makingSource: Organization Theory and Design by Richard L Daft
  • 6. Organizational Decision Making Implement Monitor Uncertainty Chosen Decision Alternative Environ ment Choose Define Best 8 1 Decision Coalition Formation Search Alternative 7 2 Problem Evaluate 6 3 Specify 5 4 Conflict Alternatives Decision Objectives Satisficing Develop Alternative Diagnose Solutions Problem The Carnegie Model The Rational Approach Solutions Participants Problems Decision Making Process of Middle Management Solutions Solutions Participants Decision Making Process of Decision Making Process of Participants Department A Department B Problems The Garbage- Can Model ProblemsSource: Organization Theory and Design by Richard L Daft
  • 7. Organizational Decision Making Implement Monitor Uncertainty Chosen Decision Alternative Environ ment Choose Define Best 8 1 Decision Coalition Formation Search Alternative 7 2 Problem 6 Projection 3 Evaluate Specify Cognitive Conflict Alternatives 5 4 and ego- Decision dissonance defensiveness Objectives Satisficing Develop Alternative Diagnose Solutions Problem Organizational Escalation of Manager’s The Carnegie Model commitment Cognitive Decision The Rational Approach Structure Making Frequency and Solutions Illusion of representativeness Control Participants Problems Decision Making Process of Middle Management Solutions Solutions Participants Decision Making Process of Decision Making Process of Participants Department A Department B Problems The Garbage- Can Model ProblemsSource: Organization Theory and Design by Richard L Daft
  • 8. Organizational Decision Making Use of Analytics reduces the Implement Monitor Uncertainty Chosen Alternative Decision Environ Manager’s Choose 8 1 ment Define Cognitive Bias and Coalition Formation Best Decision Search Alternative 7 2 Problem enables better Projection Evaluate Alternatives 6 5 4 3 Specify and ego- Decision Decision Making Cognitive Conflict dissonance defensiveness Objectives Satisficing Develop Alternative Diagnose Solutions Problem Organizational Escalation of Manager’s The Carnegie Model commitment Cognitive Decision The Rational Approach Structure Making Frequency and Solutions Illusion of representativeness Control Participants Problems Decision Making Process of Middle Management Solutions Solutions Participants Decision Making Process of Decision Making Process of Participants Department A Department B Problems The Garbage- Can Model ProblemsSource: Organization Theory and Design by Richard L Daft
  • 9. Decision Making and Business Analytics- HBR Survey Results Decision Making Processes Data in Decision Making No Visibility 9% Managers rely on gut feel 37% Inconsistent Decision Making 14%Standardization in Functional Areas 22% No Transparency 43% Some Standardization 19% Informal & Corp wide 8% Peers are Data Driven 70% Formal & Corp wide 27% What Impacts Decision How is Analytics Used? Making? No idea 5% Internal data 77% Not used 5% (customers,financial,production) External Isolated use 15% 58% Data(suppliers,competitors,econ… Used in specific functions 28% Management Judgment 84% Used in various BUs 36% Integrated in the organization 11%Source: Judgement Calls,Analytics,Decision Making and Teams that Do it Right
  • 10. Decision Making and Business Analytics- HBR Survey Results How does your use of analytics compare? Application of Analytics Don’t know 4% Analytics Centre of Excellence 30% Well behind 8% Somewhat behind 22% Senior management mandate 39% About the same 32% Somewhat ahead 26% Embedded in decision making Well ahead 8% 39% process Reliance on data analysts to Impact of Analytics derive insights Finding new ways to approach… 43% Improved Financial Perf 52% Increased Productivity 53% 1 46% Program improvements 54% Faster decision making 55% Reduced Risks 55% Cost Reduction 60%Source: Judgement Calls,Analytics,Decision Making and Teams that Do it Right
  • 11. Key-Ideas• Decision making has become much more de-centralized (Flatter organization, more boundary spanning roles, tactical decision making as important as strategic decision making)• The key to getting analytics adopted: Backward integration of business problem to data• The biggest challenge for adopting analytics: CHANGE MANAGEMENT!! . To garner support for analytics , start small and build momentum• Getting analytics to all parts of the organization requires “embedding it”• The marketing paradigm is changing. As this occurs, marketing is becoming more measurable. Similarly, there is a great need to measure the “fair value of services”• Analytics can be broadly classified as : Performance analytics, Real-time analytics, Predictive analytics. As analytics evolves, predictive analytics is becoming more common
  • 12. Challenges• Seamless transformation of Data => Information => Knowledge• In B2B models who bears the ownership of investment in analytics?• The value chain of talent: B-schools train grads to be generalists and integrator of functions while schools of exact sciences train grads on specificity• Need for healthy Skepticism instead of Cynicism• Analytics in the boardroom
  • 13. Thank You!!

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