The document summarizes key findings from a survey of over 3,000 executives on how organizations are using analytics to gain competitive advantages. The survey found that top performers were 3 times more likely to use sophisticated analytics and recognized the need to capitalize on data to drive innovation. However, many organizations still face challenges in effectively using their data due to lack of skills, resources, and understanding of analytics. The document provides recommendations for organizations to focus on high-value opportunities, start with business questions, embed insights into operations, and build analytics capabilities incrementally as part of an information agenda.

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COMPUTER AID, INC.
IT Best Practices
Analytics: The New Path to Value
David Gritz

2. Analytics: The New Path to Value
Leading Questions
How are the smartest organizations using analytics to transform insights into action?
What are the biggest challenges organizations face with their data?
Key Concepts
MIT in partnership with IBM completed a survey of more than 3,000 executives, managers, and analysts to
determine how they are gaining value from data. The survey documented the shift from executives feeling
overwhelmed by information to recognizing the need to capitalize on information and analytics to gain a
competitive advantage. Top performers recognized this need more that lower performers and were three
times more likely to use sophisticated analytics. However, lack of understanding and lack bandwidth are the
primary barriers to broad use of analytics. In addition, five critical recommendations emerged: focus on the
biggest opportunities first; start with questions, not data; embed insights to drive action; keep existing
capabilities while adding new ones; build the analytics foundation according to an information agenda.
Facts and Figures
- 60% of respondents cited innovating as a top business challenge
- Top performers are twice as likely to use insights to guide day-to-day operations
- Three levels of capability: aspirational, experiences, and transformed
- 63% percent more transformed organizations that aspirational organizations
- 6/10 organizations have more data than they know how to use effectively
Visual Concepts
Primary Challenges Facing Organizations
Managing risk
Managing compliance
Increasing speed
Acquiring customers
Reducing Costs
Growing Revenue
Innovating to differentiate
0% 15% 30% 45% 60% 75%
Primary Obstacles to Analytics Where Analytics are Performed
19%
Lack of sponsorship Central
36% analytics unit
Data ownership
Analytics within
Existing culture business units
Lack of skills internally IT Department
Lack of management bandwidth At point of need
Lack of understanding 35%
10%
0% 10% 20% 30% 40% 50%

3. Analytics: The New Path to Value
About the Author
David Gritz is a research specialist in the Allentown, PA office of Computer Aid. You may contact him at
david_gritz@compaid.
Resource Authors
Steve LaValle is the global leader for IBM’s Business Analytics and Optimization service line.
Michael Hopkins is editor-in-chief of MIT Sloan Management Review.
Full Article
Published by MIT Sloan Management Review (October 2010)
Download at http://tinyurl.com/3thzf69
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