Competing on Analytics

In a world where traditional bases of competitive advantage have largely evaporated, how do you separate your company's performance from the pack? Use analytics to make better decisions and extract maximum value from your business process.

In Competing on Analytics: the New Science of Winning,Thomas H. Davenport and Jeanne G. Harris argue that the frontier of using data has shifted dramatically. Leading companies are doing more than just collecting and storing information in large quantities. They’re now building their competitive strategies around data-driven insights that are, in turn, generating impressive business results. Their secret weapon? Analytics: sophisticated quantitative and statistical analysis and predictive modeling supported by data-savvy senior leaders and powerful information technology.

Why compete on analytics? At a time when companies in many industries offer similar products and use similar technology, distinctive business processes count among the last remaining points of differentiation. Many previous bases for competition—such as geographical advantage or protective regulation—have been eroded by globalization. Proprietary technologies are rapidly copied, and breakthrough innovations in products or services are increasingly difficult to achieve.

That leaves three things as the basis for competition: efficient and effective execution, smart decision making, and the ability to wring every last drop of value from business processes—all of which can be gained through sophisticated use of analytics.

Davenport and Harris show how exemplars—organizations as diverse as the Boston Red Sox, Netflix, Amazon.com, CEMEX, Capital One, Harrah’s Entertainment, Procter & Gamble, and Best Buy—are using new tools to trump rivals. Through analytics, these companies identify their most profitable customers, accelerate product innovation, optimize supply chains and pricing, and leverage the true drivers of financial performance.

A timely, much needed resource, Competing on Analytics promises to rewrite the rules of competition.

• Part One: The Nature of Analytical Competition
1. The Nature of Analytical Competition
   Using Analytics to Build a Distinctive Capability
2. What Makes an Analytical Competitor?
   Defining the Common Key Attributes of Such Companies
3. Analytics and Business Performance
   Transforming the Ability to Compete on Analytics into a Lasting Competitive Advantage
4. Competing on Analytics with Internal Processes
   Financial, Manufacturing, R&D, and Human Resource Applications
5. Competing on Analytics with External Processes
   Customer and Supplier Applications
• Part Two: Building an Analytical Capability
6. A Road Map to Enhanced Analytical Capabilities
   Progressing Through the Five Stages of Development
7. Managing Analytical People
   Cultivating the Scarce Ingredient That Makes Analytics Work
8. The Architecture of Business Intelligence
   Aligning a Robust Technical Environment with Business Strategies
9. The Future of Analytical Competition
   Approaches Driven by Technology, Human Factors, and Business Strategy
   

This was a low-water mark for Davenport. Too much speculation and anecdotes, and too little thought.

But it is well-written (as always with Davenport) and it gets you ideas and may make you consider different approaches, but it is not really any new stuff, that you haven't seen or studied before.

In short, I am dissapointed as I expected more from Davenport, but it is still a very good book.