When considering ways to create competitive advantage, companies traditionally look at activities core to the business. A manufacturer might seek cutting-edge materials or innovative production processes. A pharmaceutical company might build its R&D practices around the latest medical research to accelerate breakthroughs in new drugs and therapies.
However, the means to achieve a competitive edge needn’t relate directly to the industry a company operates in or the critical processes that drive revenue. Increasingly, businesses are looking at internal factors like data processing efficiency and business insight creation as a way to outpace the competition.
Research conducted by Aberdeen Group across Europe shows that, for many organisations, use of analytics for data-driven decisions has shifted from competitive advantage to competitive necessity. The sample covered the UK, Germany, France, Benelux and Spain, with respondents asked how and why they invest in analytics. More than half (52 per cent) claimed that ‘remaining competitive’ was a core driver. And 28 per cent said that the workforce is beginning to demand better analytical capabilities and data access.
As data volumes continue to swell, there is a fear of being ‘left behind’ if that data is not exploited effectively to improve core activities. This is felt at an organisational level by business leaders and at an individual level by people who are keen to perform well in their professional roles.
Driving real value from analytics hinges on the ability to search and explore data rather than just storing it. This underpins an ability to convey critical information more quickly, and to reduce the cycle times of key business processes.
Aberdeen Group’s research revealed a layer of best-in-class organisations in Europe. They set themselves apart from other companies by taking steps to increase their percentage of ‘searchable’ data, enhancing the timeliness of critical information and improving process cycle efficiency.
Intelligent Data Management
So how do they achieve this? It has a lot to do with organisational maturity. Leader organisations are more likely to have a variety of capabilities in place that contribute to analytical efficiency. They also recognise that the best insights are usually derived from a rich foundation of data that includes representation from several areas of the business.
These companies are willing to create an open exchange of business data across functional areas, but they also share data responsibly. They understand that data quality rests mainly on the ability to manage access and create an environment of responsible usage. Leaders are more likely to have tools in place to govern and control end user access to data, ultimately improving data quality and organisational trust in the information they use.
Our research shows that best-in-class organisations are 67 per cent more likely to have a strategy in place for data preparation which covers processes and use of technologies. This includes activities like data integration, data quality enhancement and data profiling, which contribute to a greater level of maturity in data environments. Leaders are also more likely to have a centralised system of record that connects with disparate applications and other discrete data sources. They use processes and tools to help centralise information, and feed decision makers with cleaner, more useful data.
Empowering business leaders with insights derived from raw data enables them to identify and exploit new opportunities from a more objective, scientific standpoint. This plays a vital role in achieving industry leader positioning and reduces the risk of being disrupted by competitors who are ahead of the curve.
Sharing insights across the entire organisation enables departments to work more cohesively and intelligently. And this can deliver tangible results in the form of revenue growth and profitability. Our research showed that leader organisations in Europe typically achieve twice as much organic revenue growth and enjoy better operating profit than their peers. It’s easy to see why, for these firms, data analytics is regarded as an essential business function.
About: Aberdeen Group is a technology and services company that helps tech sales and marketing executives distill smart data science into actionable moments. We help companies win through our unique targeting capabilities (using the CI Technology Data Set), advanced analytics using our own innovative proprietary and public data sources, and our original and research based content engine.
Source: Aberdeen Group Blog