Competing on Analytics: The New Science of Winning | Thomas H. Davenport, Jeanne G. Harris

Competing on Analytics: The New Science of Winning | Thomas H. Davenport, Jeanne G. Harris | Pioneer in Analytics

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Competing on Analy...

	Competing on Analytics: The New Science of Winning Thomas H. Davenport, Jeanne G. Harris Harvard Business School Press, 2007 - 240 pages average customer review:based on 54 reviews view larger image
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highly recommended

How to become an "analytical competitor"

This book is a brilliant development of core concepts in an article co-authored by Thomas H. Davenport and Jeanne G. Harris that originally appeared in the Harvard Business Review. In it and now in this book, they explain how to become an analytical competitor: "an organization that uses analytics extensively and systematically to outthink and outexecute the competition" through support of a strategic, distinctive capability (e.g. Netflix and Wal-Mart), taking an enterprise-level approach to and management of analytics (e.g. Harrah's Entertainment and RBC Financial Group), sustaining a commitment to analytics by senior management (e.g. Jeff Bezos, founder and CEO of Amazon, and Rich Fairbank, founder and CEO of Capital One), and having large-scale ambition (i.e. the aforementioned companies as well as others "bet their future success on analytics-based strategies"), with senior executive commitment "perhaps the most important because it can make the others possible." Davenport and Harris classify companies within five stages of analytical competition:

Stage 1: analytically impaired ("flying blind")
Stage 2: Localized analytics (isolated, fragmented, disconnected, inconsistent, etc.)
Stage 3: Analytical aspirations (sees need, begins to explore options)
Stage 4: Analytical companies (enterprise-wide perspective, eager to innovate and differentiate)

Stage 5: Analytical competitors (analytics are the primary driver of performance and value)

Obviously, the challenge is to become a Stage 5 organization but an even greater challenge is to remain one. According to Davenport and Harris, companies that successfully compete on analytics have analytical capabilities that are difficult to duplicate, unique, adaptable to many situations, better than the competition, and renewable. By design and when utilized, those capabilities must also be able to accommodate all manner of changes within the given competitive marketplace. In some circumstances, in heavily regulated industries or when the analytics support an obsolete business model (e.g. large U.S. airlines such as American and United), analytics are not enough. Still another challenge is to identify those internal applications of business analytics that are clearly strategic and involve competitive advantage.

For me, some of the most valuable material is provided in Chapter 8 as Davenport and Harris explain how to align a robust technical environment with business strategies when incorporating analytics and other business intelligence (BI) technologies into their overall IT architecture. That is, a Stage 5 organization has "a full-fledged analytical architecture that is enterprise-wide, fully automated and integrated into processes, and highly sophisticated." Effective management of data requires correct answers to questions such as these:

1. Which data are needed to compete on analytics?
2. Where can these data be obtained?
3. How much are needed?
4. How can the data be made more accurate and valuable for analysis?
5. What rules and processes are needed to manage data from their creation through their retirement?

Here's another question which at least a few of those who read this review may be asking: Why make such a substantial investment in what it takes to become - and then remain -- a Stage 5 organization? Davenport and Harris provide an answer in the book's final paragraph: "analytical competitors will continue to find ways to outperform their competitors. They'll get the best customers and charge them exactly the price that the customer is willing to pay for their product and service. They'll have the most efficient and effective marketing campaigns and promotions. Their customer service will excel, and their customers will be loyal in return. Their supply chains will be ultraefficient, and they'll have neither excess inventory nor stock-outs. They'll have the best people or the best players in the industry, and the employees will be evaluated and compensated based on their specific contributions. They'll understand what nonfinancial processes and factors drive their financial performance, and they'll be able to predict and diagnose problems before they become too problematic. They will make a lot of money, win a lot of games, or solve the world's most pressing problems. They will continue to lead us into the future."

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Pioneer in Analytics

This book is the first ever book who pay enough attention to the strategic aspect of Analytics. As a leader in Analytics in the Financial Services firm, I found this book enlightening. The materials does not mean to cover every technical aspects of developing Analytics, it is a strongly recommneded for CMO, CFO and CIO.

A very good introduction to the topic of business analytics...

There is *so* much value and information locked up in the data that a company maintains on their business. But how can a company turn that into a competitive edge? That question is explored in the book Competing on Analytics: The New Science of Winning by Thomas H. Davenport and Jeanne G. Harris. While not a detailed "how to" book on the subject, it makes a strong case for what needs to be done to survive and compete in today's marketplace.

Content:
Part 1 - The Nature of Analytical Competition: The Nature of Analytical Competition; What Makes an Analytical Competitor?; Analytics and Business Performance; Competing on Analytics with Internal Processes; Competing on Analytics with External Processes
Part 2 - Building an Analytical Capability: A Road Map to Enhanced Analytical Capabilities; Managing Analytical People; The Architecture of Business Intelligence; The Future of Analytical Competition
Notes; Index; About the Authors

I'll be the first to admit that a book on analytics doesn't necessarily sound like "edge-of-your-seat" reading. But surprisingly, this book is much more readable than I expected. Davenport and Harris avoid getting bogged down in academic posturing and theorizing, and the examples of real companies and scenarios are numerous. You'll find everything from financial services (like Capital One) to sports teams (such as the New England Patriots). Through these actual companies and case studies, the foundation is set for why this is critical to business success, as well as the mind-set changes that are needed to make it all happen. They also do a great job in explaining the difference between reporting and true analytics, as well as presenting a continuum of stages of analytical competition. You may be anywhere from analytically impaired (not good) to being an analytical competitor (very good). While you may not like where you are, at least you'll understand what you need to do to move up the pyramid.

Even if you're not directly responsible for analytics, it's worth understanding what it's all about. This is a good intro to the topic, and it may be what spurs you on to take the next steps from "what" to "why"...

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A "Primer" on Analytics

My overall impression of the book is that it does provide a good survey of what is going on in the business world as it relates to analytics, whether they relate to the Internet or just to good business metrics. I find, however, that there is a complete lack of a bibliography of publications that might be the next step in pursuing more knowledge of this subject. I realize that there are extensive notes which do make reference to specific publications (articles, etc) but they are not organized into a usable bibliography. I suspect that I need to do a "second read" of this book to ensure that I have its intent well in hand.

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Solid Overview

This book is a good summary of how analytics can help businesses. I didn't feel like anything I read in here was ground breaking or would change significantly how I thought about business; however, I already believed analytics were a good thing. There was very little 'how' in this book. It rather serves only to make the case that analytics are a good thing and can help your business.

reviews: 1, 2, 3, 4, 5, 6, 7, 8, page 9, 10, 11

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