Business intelligence capabilities and analytic prowess will play crucial roles in the most competitive sectors of the global economy, according to a new study by the director of research for Babson Executive Education at Babson College in Wellesley, Mass.
Three conclusions emerged from the study data, said Professor Tom Davenport, president’s distinguished professor in the Information Technology Management Division of Babson. First, leading organizations are focusing more attention on developing fact-based decision-making processes. Second, initiatives which are tightly focused on achieving key strategic objectives are the most likely to gain traction. Third, the support and involvement of champions at the C-level are absolutely critical to the success of enterprise business intelligence initiatives.
But an organization’s efforts to develop fact-based decision-making capabilities are likely to fail unless they are closely supported by top management, the survey showed.
“We have reached a critical juncture in the history of global competition,” said Davenport. “After years of fitful progress, leading firms have begun basing their competitive strategies on the sophisticated analysis of business data.”
Davenport cited progress at organizations such as Capital One, Harrah’s Entertainment, Dreyfus, Marriott, Procter & Gamble, Verizon and the NFL’s New England Patriots as clear signs of an accelerating trend toward greater reliance on analytic processes and technologies.
“Many companies today use business intelligence for specific applications, but these initiatives are usually too narrow to affect corporate performance,” Davenport said. “The organizations we surveyed, however, are building broad capabilities for enterprise-level business analytics and intelligence.”
Davenport said successful organizations’ capabilities go well beyond data and technology to address the processes, skills and cultures of their organizations: “These strategies are driven by CEOs and senior executives who insist on fact-based decisions throughout their businesses.”
Of course, the ability to draft Tom Brady in the sixth round doesn’t hurt, either.
The research study, which polled more than 40 C-level executives and directors at 25 globally competitive organizations, was conducted by Davenport’s team over the first quarter of 2005. Each executive was asked 15 to 20 questions during a 45-minute interview.
"We were surprised by the extremely high degree of interest and involvement in this subject area,” Davenport said. “The executives we questioned were clearly interested in identifying the best strategies for organizing analytic operations on an enterprise scale. They’re really taking this seriously.”
The research survey was co-sponsored by SAS and Intel. The results of the survey were announced at the 30th annual SAS Users Group International conference in Philadelphia.
David Sims is contributing editor and CRM Alert columnist for TMCnet.
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