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When France lost soccer's 2006 World Cup to Italy, many fans blamed French superstar Zidane, red-carded off the pitch for head-butting an Italian player.
But Italy may have won far from the field through the clever analysis of data.
Outside of sports, some organizations are winning in their own arenas through data. In virtually every industry and geography, companies such as Google, Tesco, Honda, Capital One and Harrah's Entertainment are already gaining significant competitive advantage by using analytics to out-think and out-execute their competition. For organizations that have not yet started down this road, emulating teams that know a thing or two about successful competition can help jumpstart their efforts.
The AC Milan soccer team's biomedical research center, Milan Lab, evaluated several of the Italian national team's players. The lab tracks 60,000 data points on a player (200 on one jumping motion alone) and analyzes the statistics to ensure health and fitness. Basing decisions on data helped AC Milan build one of Europe's top soccer teams. These recent Champions League winners boast seven titles in Europe's premier cup competition.
Business people have long borrowed insights from sports about teamwork and leadership. But data, especially in the form of statistics about players and teams, has traditionally been fodder for sports commentaries or office chat. Only recently has hard data begun to transform the management of professional sports. In fact, some sports executives now have much to teach businesses about how to profitably capture and analyze data. These professionals have first-hand experience of how the intelligent use of analytics can improve asset acquisition and management, talent management, operational performance, and even customer service.
The New England Patriots football team offers business executives fresh ideas on how to better use analytics to acquire talent. The Patriots do not use the same scouting services that other teams employ. They evaluate college players even at the smallest schools and gauge potential draft picks with criteria that other teams don't use—low ego and high intelligence, for example. The team tracks the data points on potential players with a "Draft Decision Support System" that is updated daily with new reports from scouts. No detail is overlooked as long as it can provide an edge. How many organizations are willing to employ a radically new approach such as this to discover hidden talent?
Formula One race teams demonstrate how analytics enhance operational performance. As drivers jostle for position, technicians scrutinize dense streams of real-time data from more than a hundred sensors on each car. Trackside engineers collect gigabytes of data from each race, everything from engine oil pressure to chassis stability. Rapid data analysis helps managers decide whether a car can pull into the pits early, whether it can take on less fuel or whether its gearbox is heating up. The right data at the right time helps determine whether the car finishes the race and where it is finally placed.
Bolton Wanderers Football Club in the United Kingdom offers lessons in turning loyal fans into higher-spending customers. Until fairly recently, almost all of the team's income came from ticket sales, a challenge for a team with a smaller fan base than many competitors. The team has broadened its revenue sources through smart cards. A sophisticated customer relationship management system analyzes the steady stream of data captured by fans' cards.
Another way that sports teams gain advantage is by discovering new metrics, such as the popular Roland Rating that measures a basketball player's value to the team.
Whatever the metric, it must be applied consistently, as the former manager of the Boston Red Sox learned the hard way. The Sox lost a pivotal baseball game to their archrival New York Yankees after the manager let a star pitcher remain in the game well past the point at which the analytical data had clearly indicated that the pitcher would falter.
An analytical approach is only as good as the data available. That is why top racing teams choose highly compatible hardware and software in order to ensure that the data is as accurate and timely as possible.
These lessons from sports come at a decisive time for business. Product life cycles keep shrinking, while customer expectations go on rising. There are more and more data on hand and far less room for errors in execution or decision making. Competition today requires superior analytics and deeper insights into what makes an organization work.
Accenture research shows that the best analytic competitors are widening their leads over the rest. High performance businesses are defined as those that outperform their competitors over the long term and across economic, industry and leadership cycles. They are twice as likely to use analytics strategically compared with the average organization and five times more likely to do so than low performers.
An Accenture survey found that CIOs are racing to address a significant IT capability gap. Most remain hampered by report-driven business intelligence systems that operate in silos. These systems are ill-equipped to provide the sophisticated predictive analytics an organization needs to become an analytical competitor. The high performers do not stop at technology, but also put abundant time and effort into developing robust analytical business processes and capabilities.
From improving security with biometric data at airports to transforming major retailers' merchandising, the use of analytics is finding its way into the playbook. Organizations are realizing that analytics can not only drive greater returns but bring a new perspective to existing brands and channels, offering businesses a sporting chance in the race toward high performance.
Learn more about Business Intelligence.
Jeanne G. Harris is executive research fellow and senior executive at the Accenture Institute for High Performance, where she leads research in the areas of information, technology, and strategy. She is co-author with Tom Davenport of Competing on Analytics: The New Science of Winning, Harvard Business School Press, 2007.
March 25, 2008
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