Melbourne Business School and A.T. Kearney launch Analytics Impact Index
Australian companies are falling behind their overseas counterparts in how effectively they use data analytics in business, according to a new global study launched today.The Melbourne Business School - A.T. Kearney Analytics Impact Index surveyed more than 400 companies in in 34 countries with an average yearly revenue of $US3.8 billion.
The report is the first of what will be an annual index measuring the maturity and impact of data analytics in organisations around the world.
Key findings of the research were presented today at the Melbourne Business Analytics Conference by Melbourne Business School Professor Ujwal Kayande and A.T. Kearney Partner Enrico Rizzon.
The full white paper will be released in August. Register to be notified of the white paper release here.
The report found that:
* Leadership and strategy has a far bigger impact on profit than technology and infrastructure when it comes to using data analytics effectively.
* Investing in data ecosystems without strategic leadership can actually have a detrimental effect on companies.
* Only 8 per cent of companies surveyed were extracting the full value of data analytics, while 10 per cent were falling behind the rest of the market.
* Companies can increase profit by up to 60 per cent by appropriately using analytics, but only when done strategically.
* Companies in the oil and gas, industrial and technology sectors were the most advanced users of analytics, ahead of government, energy and utilities, mining and others
* The best-performing companies tended to look at individual customer behaviour data and create products and marketing campaigns to meets their needs, rather than aggregate sales data.
Professor Kayande, director of the Melbourne Business School's Centre for Business Analytics, said the research was designed to help companies make informed decisions as they prepared to invest billions into their data capabilities.
"Firms around the world are investing heavily in analytics, but there is very little research into what value they are extracting from that investment. That’s the question we sought to answer with the Analytics Impact Index," he said.
"There are many studies out there that benchmark firms on their capabilities, but our study is unique in that we assess the impact of those investments on the bottom line.
"Our study provides guidance to boards on what companies need to do to make analytics investments worthwhile.
"Merely investing in technology doesn’t bring the benefit that top performing firms obtain – to have a good chance of obtaining that benefit, the firm requires leadership teams who advocate for analytics use across the organisation and an analytics strategy that is driven by the firm’s business strategy."
Mr Rizzon from A.T. Kearney said the key findings on the importance of leadership reflected his own experience in industry working with major companies.
"The perennial bias of technology investment as the solution to analytics maturity and impact persists. We often find that our clients have invested in but don't leverage the data ecosystems they have," he said.
"The study points to leadership, which drives utilisation of the data ecosystems to generate the fact-based insights necessary for improved decision making, as being key to delivering of analytic impact."
Click here to register to be notified when the Analytics Impact Index white paper is released.
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