The Untapped Value of Analytics
Professor Ujwal KayandeAssociate Dean (Academic)
Director, Centre for Business Analytics
1998
“Man, I’m trying to throw the game back to 1998.”
“There’s a stack of analytical da-ta, or day-ta, however you want to say that word, that people don’t even know how to read it.”
“So I’m not going to rely on GPS’s and all the modern technology”
“I will certainly have some people that are professional that can help me in that regard.”
Jon Gruden, February 2018
10
According to the Worldwide Big Data and Analytics Spending Guide from IDC 2018
AUSTRALIAN COMPANIES ARE ESTIMATED TO SPEND $2.7B ON BUILDING ANALYTICS CAPABILITIES
11
WHAT IS ANALYTICSREALLY WORTH?
HOW CAN COMPANIES BEST EXTRACT THAT VALUE?
12
Cover 12 Industries
Top 3: Consumer Goods & Services (21%), Tech(14%),
Healthcare (14%)
Industry Coverage
400+ respondents
43% C-Suite, 17% Directors,
28% Managers
Executive Respondents
Median participant generates
$1B USD revenues
Revenue ranges from $1.5M to
$247B USD
Company Size
EMEA
23%APAC
62%Americas
15%
13Two complementary indices are used to measure analytics practices (Maturity Index) and impact on profit (Impact index)Maturity and Impact Indices
Provides a comprehensive assessment
of a company’s practices and
processes
Provides an objective assessment of
return of analytics as a proportion of
total profit
Maturity
Index
Impact
Index
1
2
Holistic assessment of
analytics in terms of both
performance and profit
14
Impact
Index
Provides an objective assessment of
return of analytics as a proportion of
total profit
Two complementary indices are used to measure analytics practices (Maturity Index) and profit (Impact index)Maturity and Impact Indices
Provides a comprehensive assessment
of a company’s practices and
processes
Maturity
Index1
2
Holistic assessment of
analytics in terms of both
performance and profit
15
Explorers
Followers
Leaders
Laggards
States of Excellence: Laggards, Followers, Explorers, and LeadersStates of Excellence
Maturity Index: participants are benchmarked & categorized into 4 stages according to their analytics maturity
10%
46%
36%
8%
16
Our framework brings together four dimensions to comprehensively measure analytics maturity of a firm
Analytics Impact Index Framework
17
Laggards Vs Leaders
33%
42%
33%
Analytics driven culture
Defined Org Structure
Strategy in place
Defined Data leader
<1% 88%
100%
100%
86%
Strategy &Leadership
Culture &Governance
Data Ecosystem
Talent & Skills
Strategy in Place
Defined Data Leader
Defined Org Structure
Analytics Culture
Sophisticated Ecosystem
Real time data
External contractors
Skilled Talent
18Two complementary indices are used to measure analytics practices (Maturity Index) and profit (Impact index)Maturity and Impact Indices
Provides a comprehensive assessment
of a company’s practices and
processes
Provides an objective assessment of
return of analytics as a proportion of
total profit
Maturity
Index
Impact
Index
1
2
Holistic assessment of
analytics in terms of both
performance and profit
19
Total Profit Attributed to Analytics
Baseline ProfitTotal Profit
Impact Index Elements and ExamplesProfit ($M)
How is the Impact Index calculated?It is a proportion of profit attributed to analytics and then presents as a multiplier of the baseline profit
Calculated
20As a company progresses its maturity, the more financial impact analytics has
Imp
ac
t In
de
x
Impact Index vs Maturity Index
x xx
x
21Laggard companies stand to increase their profit by ~60% on average if they embrace analytics to the same extent as Leaders
% profit differences between maturity levels
1. Potential refers to the increase in profit if a company were to increase its maturity to level 4 at the current point in time.
Explorers
Followers
Laggards
+60%
+55%
+15%
Leaders
22Leadership, strategy and talent are key drivers of value while the over-investment in data ecosystem can be detrimental to gaining value
4. Data Ecosystem
3. Culture & Governance
2. Talent
1. Leadership & Strategy
Positive & Negative drivers of value1
1. The results have been calculated using a System of Equations, Step-wise Linear Regression, Ridge Regression and Maximum Likelihood estimation (MLE)
23
Source: Melbourne Business School & A.T. Kearney
Leader State
Talent & Skills
Data Ecosystem
Culture & Governance
Strategy
Leadership
It starts with the senior leadership…
24Analytics Impact Index next year…. What you will learn from doing it?
You can still join this year’s
Analytics Impact Index:
Go to analyticsimpactindex.mbs.edu and follow the link
Year on Year
Growth Index
Causal
01
02
03
Further insights:
The Untapped Value of Analytics
Professor Ujwal KayandeAssociate Dean (Academic)
Director, Centre for Business Analytics
Top Related