Year after year the hype surrounding data analytics becomes louder. Thought leaders and research organizations have sung the praises of analytics as a means for generating much-needed insight into business operations, and companies that have embraced analytics have been able to translate insight to better operational productivity and faster, more accurate decision-making. In a competitive business environment where your competition is just as hungry as you are to reach and secure new customers and where business leaders need to make accurate, fact-based decisions about the company’s future, analytics can be the game-changer that makes the difference between success and failure. Here’s how:
The beauty of analytics is that it can serve as a guideline for transforming sub-par business performance to one that is efficient and profitable. Whereas reports provide a historical view of what transpired, analytic output is forward-looking, and plays an integral role in helping executives plan for the future. In a recent research report, the Aberdeen Group explores how an effective analytics strategy helps promote data-driven culture and supports significant business performance enhancements. In true Aberdeen fashion, the report demonstrates the difference between how leading organization use analytic insight in the best interest of their customer base, versus ‘followers’ who are slower to leverage their analytical environment to improve profitability. Companies that have established have a strong analytic presence are able to arm executives with relevant insight on a tactical level, improve customer service (93% vs. 42%), and therefore improve operating profit (27% vs. 4%) – see figure 1.
Figure 1: Major Performance Enhancements Realized By Organizations
For example in the retail industry, data analytics may drive strategic decisions about pricing, promotions and availability of certain products. When calculating the price point for a product, a manager must consider factors such as COGS, competitive data, as well as the price ceiling in the eyes of the customer. Placing a price tag on an item should be an analytic exercise, not a random number based on gut feeling alone. Running promotions is also an analytic exercise. The ‘manager’s special’ sticker on that box of donuts is not because the store manager was having a particularly good day. At your expense, the store needs to move certain items quickly before they expire and count as shrink loss against the company’s bottom line. Product availability too requires analytic effort; utilizing analytics to improve operational performance means the difference between delivering the right products according to customer demand, and often being out of stock for popular consumer products. If product stock outs persist, chances are that this will breed dissatisfaction within the customer base and consequently lost business opportunities. However, the insight and foresight that analytic strategies provide means that decision makers can create data-driven plans for the future.
Leaders that implement analytic strategies drive purposeful growth for the organization, are able to forge ahead of the competition, and stay relevant in their line of business. Leaders should not become comfortable with their current success, but must realize that each new day requires making strategic adjustments to anticipate continuously changing customer needs and counter-tactics by competitors, explains Gary Cokins in an insightful post on Why Large, Once-Successful Companies Fail. In a volatile business environment, leaders must not only be able to adapt to changing conditions, but must also make strategic, calculated decisions that will improve the business beyond the current situation. In a recent research highlight, the MIT Sloan Management Review also confirms that analytics drives innovation and business transformation. Business intelligence and analytics transformation at MillerCoors meant a joint venture between the U.S. and Puerto Rican operations that expanded their breweries and paved the way to produce beer closer to where consumers were drinking it. Rob Saker, BI and Analytics leader at MillerCoors explains: “Analytics is the key component in this transformation. We are leveraging analytics to make better decisions and to invest our resources more effectively: the right information to the right person at the right location.” Using data and analytics as strategic assets, organizations can transform their business from mediocre to successful.
Analytics software providers like arcplan help companies leverage their biggest asset, data, by providing actionable insight into business operations. Going beyond traditional reporting, arcplan’s unified business analytics platform equips leaders with contextual intelligence that supports strategic decision-making.
Want to test this for yourself? arcplan’s free trial will give you a preview of how data insight and analytics can make a difference at your organization. Or contact us directly to talk about specific examples of how customers similar to you use arcplan to drive better business performance.