PMI Bangalore Chapter


PM Essence

Business Transformation using Analytics

– Sivaramakrishnan Narayanan, PMP, IBM India Pvt. Ltd.

Like coastal cities seeking shelter from successive onslaughts of blizzards and floods, today’s enterprises are striving to come to terms with their own extreme conditions. Business leaders concerned with how they will weather the storms are questioning whether traditional techniques will continue to work. In an environment that has little resemblance to the past, old ways of decision making and management are breaking down.


Today’s leaders sense an inflection point, an opportunity to revisit their use of information, or analytics, and fundamentally alter the way in which they conduct business. While advanced analytic methods have been available for some time, today’s tools and techniques provide superior insight and predictability to support management decision making and actions. 


Today, Executives focus on supplementing the standard historical reporting with emerging approaches that make information come alive. These include data visualization and process simulation, as well as text and voice analytics, social media analysis, and other predictive and prescriptive techniques. New tools like these can make insights easier to understand and to act on at every part of the organization, and at every skill level.  


Many of us probably have hadyears of experience with “analytics”, so what makes them relevant now?


A couple of things have happened to make analytics matter in today’s marketplace.


1. The rapid increase in the amount of readily accessible data available within organizations in recent years. Organizations are collecting and capturing more data than ever.


2. The significant increases in computational power combined with advances in data storage and analysis capabilities, both within companies and in the marketplace.


3. The global recession has made organizations much more wary of “gut instincts” and created a much greater needed to differentiate a company/product/service from its competitors.


Not surprisingly, organizations that use analytics in the most mature way are more likely to outperform their competitors than those who are just beginning to adopt analytics. Top performers are more likely to use an analytic approach within their business processes than to rely on intuition. Some organizations need luck to succeed; top performers make their own luck by embedding business analytics to their business.


According to a recent study of nearly 3,000 executives by the MIT Sloan Management Review and the IBM Institute for Business Value, analytics-driven organizations do, in fact, see greater success in the market. These companies have the ability to get a clear view of the situation from a common, connected source of information. As a result, they can anticipate and shape business outcomes to consistently outperform their competitors.The joint IBM/MIT Sloan Management Review study (Title: “Analytics: The new path to value”) has found that: 


Companies that invest in Analytics have better insight and hence are better able to manage business performance. They lead their peers with 33 percent higher revenue growth, 12 times more profit growth, and 32 percent higher return on invested capital.


Those that perform well are able to leverage analytics to know the odds before they place their bets. Top performers are 15 times more likely to predict and prepare for the future by evaluating trade-offs proactively.


Basing decisions on facts, not instinct, creates tangible returns. Organizations that have well-established analytics capabilities are three times more likely to be outperforming their peers than those who are just getting started.


The research also points to the value of applying a comprehensive set of Analytical capabilities to improve business outcomes.


How to embed Analytics into the Organization


The Process-Application-Data-Insight-Embed (PADIE) technique is a simple means by which an organization can operationalize insights drawn from data.


The PADIE technique helps users across the organization understand from the start the full impact of Analytics as it applies to a specific business challenge. This technique enables business and analytic teams to work together to create analytic models based on use cases that show analytics in action.


The PADIE technique is executed in three steps:


Step 1 – Document existing processes and applications.

Step 2 – Identify data and insight that can solve pain points and create value.

Step 3 – Embed analytic insight.


Reaping Business Benefits from the use of Analytics


Once Analytics has been embedded into the day to day operations of the business, Organizations will be able to reap the benefits from it.


Three strategic areas where analytics drive competitiveness and differentiation for organizations are as follows:


1) Achieve maximum growth through the use of customer analytics;

2) Reducing exposure to accelerating risk that may negatively impact the organization, and

3) Escaping the paralysis created by regulatory uncertainty.


Organizations are no longer relying on intuition to fill information gaps. Instead they are using new analytics to make decisions in an entirely different way. Driven by intelligence rather than intuition, organizations can gain speed, agility and timing to execute winning maneuvers. They learn what’s coming at them from myriad directions. They have insight into customer desires. They can better anticipate supply chain constraints and competitors’ countermoves. They are able to extract the precise information they need – highly relevant and contextualized – and predict the most likely outcomes of key decisions and events. Given the nature of today’s business environment, no enterprise can choose to leave benefits like these on the table. Only those enterprises that can skillfully adopt integrate and deploy the benefits of enterprise wide analytics and optimization will be prepared to shape their own future.