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Getting serious about analytics: Better insights, better outcomes

Accenture outlines how high-performance businesses successfully use analytics data to create actionable insight that has real business benefits.

Overview

Most businesses generate a lot of data, but relatively few use it effectively to create competitive advantage and enable high performance.

Accenture’s Brian McCarthy and Jeanne Harris use research findings and their experience to outline how high-performance businesses are using analytics to pull ahead of competitors and turn data into insights and improved decision making to drive better outcomes.

 

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Background

The ubiquity of IT, growing transaction volumes and increasing computing power make data in great quantities available to companies of all sizes. However, only a minority of companies has developed advanced analytical capabilities that create competitive advantage.

Accenture defines analytics as an integrated framework that employs quantitative methods to derive actionable insights from data, and then uses those insights to shape business decisions and ultimately improve outcomes. Accenture research confirms that high-performance businesses are five times more likely to use analytics strategically compared with low performers. These high-performance businesses:

  • Close the loop by turning raw data into insights that shape actual decisions and business processes.

  • Move up the analytical curve by using predictive analytics to gain insights into what the company should do in response to changing business conditions.

By contrast, Accenture research shows that data remains an underused and underappreciated asset for most companies.

Analysis

Building an advanced analytical capability is not easy. While each company faces its own unique challenges, there are some common ones:

  • Focus on the wrong metrics, or too many metrics. Too often, firms fail to map metrics against the key drivers of their business.

  • Inability to validate insights. There is no formula for validation, rather managers need to review the statistical analysis through the filter of management experience.

  • Faulty execution. Once a key insight is selected, a number of actions can be taken. Choosing the right action in a timely way is essential to success.

  • Cultural resistance. Many managers—particularly those who came of age 30 to 40 years ago—continue to rely on intuition and judgment. While valuable, these qualities remain limited until combined with the rigor of fact-based analysis.

These challenges are not new, but the need to overcome them is more urgent in today’s multi-polar world with its multiple centers of economic power and activity. This environment is very complex, and the market moves with much greater velocity. Analytics can help get the right information into the hands of the right people to enable better, faster decision making.

Recommendations

Determining a strategy to build an analytical capability will depend on the company’s level of maturity in the discipline. Accenture has outlined five stages of analytical maturity to provide clients with an initial diagnostic. Based on the results of this initial diagnostic, companies can then proceed to lay the groundwork for a basic, robust or truly advanced capability.

As outlined in Competing on Analytics: The New Science of Winning, research suggests that high-performance businesses build effective analytics on a three-part foundation:

  • Disciplined, repeatable processes.

  • The right people, properly led and organized.

  • Technology that everyone can use.

The end game should be an enterprise-wide analytics capability that will make the business more effective, and ultimately play a role in enabling high performance.

Authors

Brian McCarthy is the executive director, Strategy, for Accenture Analytics. Mr. McCarthy has extensive experience in value based performance management and analytics engagements with clients across multiple industries. His primary focus is helping organizations address key performance management and analytics challenges and align around increasing shareholder and stakeholder value. He currently leads the Enterprise Management Analytics offering and has overall responsibility for the Accenture Analytics innovation agenda.

Jeanne Harris is an executive research fellow and director of research at the Accenture Institute for High Performance, and co-author of the books Analytics at Work: Smarter Decisions, Better Results and Competing on Analytics: The New Science of Winning. During more than 30 years at Accenture, Jeanne has worked extensively with clients seeking to improve their managerial information, decision making, analytical and knowledge management capabilities.