Analytics enabled strategic choices to drive value
Using analytics to make strategic choices is increasingly recognized as a driver of business success! In a series of blogs we will explore how organizations can leverage data to generate insights and drive top-line growth. Scroll down to download our blog series.
Blog 1: Strategic precision using data as a strategic weapon
In a series of blogs we will discuss the use of data analytics in strategy development. In this blog we will share our view on the concept of strategic precision enabled by the smart use of data.
The first two blogs will aim to provide tangible insights on the use of analytics in answering the two core strategic questions: ‘where to play’ (or which markets to compete in) and ‘how to win’ (or how to deliver a differentiated value proposition).
In the third blog, we will discuss how to define and execute an analytics-driven strategy and which capabilities are needed in order to do so.
Blog 2: Building a competitive advantage through analytics
In a series of blogs we will discuss the use of data analytics in strategy development. Our first blog indicated how to define the optimal strategic playing field. In our second blog, we will share our view on using data to define ‘how to win’ on that chosen playing field.
Blog 3: Execution at the front line: realising the value of strategy analytics
In the past blogs we have shown the business value of embedding analytics in strategic decision making (e.g. Where to play, How to win), in helping to build a long-term competitive advantage. Now we are going to assess the fundamentals to getting started – to enable employees to make analytics driven strategic choices to ultimately drive top and bottom line growth.
Organizations can generate value through analytics-driven strategic choices
Using data to make tactical business decisions is not necessarily a new phenomenon. Marketeers have long since been using historical sales data to predict customer demand - a popular anecdote tells of how Target was successful in identifying (and marketing to) pregnant women based on purchase history across a bucket of twenty five products. In recent times, consumers have become accustomed to digital services providing highly personalized offerings ranging from product suggestions to movie recommendations and even recommended job openings.
We believe that organizations can take this one step further and apply a similar analytics-driven approach to answer more complex, strategic questions. In our experience this allows more precise conclusions to be reached, which in turn enables organizations to better focus their resources and generate greater business value. Further, we have noticed that strategic initiatives can suffer from a lack of clear target setting – a data driven approach often enables clearly articulating the expected outcomes, as well as tracking of results.
“Where to play?” and “How to win?” are two questions that are central to any strategy. In the first, organizations try to define the markets where they would like to deploy their efforts and resources. The second question asks how the organization can best deliver a differentiated value proposition the chosen markets. Data analytics can support these efforts through repeatable assessments of granular combinations of customer groups, channels, geographies and buying behavior.
This allows identifying very precisely where companies should focus their efforts for maximum result, as well as a consistent method to assess results and steer the business.
Organizations should act now to leverage advances in technology
The growth of digitization, driven by cheaper and more powerful computing devices, has led to an exponential increase in the data that is created and stored globally. The International Data Corporation has predicted this trend of data explosion will continue into the next decade, with the Global Datasphere growing over five-fold between 2018 and 2025.
One conclusion of this is that organizations will have access to ever increasing pools of data, both internal and external. However, we have seen that access to vast amounts of data is not a predictor for successfully leveraging analysis into value – one of the pitfalls of big data can be over-investing in the analysis of complex and strategically irrelevant data sets. In order to drive business value, it is critical to invest time in strategically relevant analyses using meaningful data, and getting a head start can lead to a competitive advantage.
For more information on the Smart Growth or the Smart Growth blog series please contact Perry van Overveld or Yashodhan Nevatia via the contact details below.