In Competing on Analytics, which appeared in the Harvard Business Review, Thomas H. Davenport presents analytics competition as the future of strategic business management and details how skills and expertise acquired in the field will determine future successes. This prophecy being based on the observation that as the market is being flooded with products, it reaches a saturation level which forces businesses to look into variables other than the product itself. Thus, data and analysis become the key determinants of success in a competition that shifts from being product centric to data centric. Here the article succeeds at driving the point home by citing some very relevant examples of successful companies that are distinguished by their data analysis and the way they interpret and implement the findings of that data such as Capital One.
It is noteworthy that the article takes a different approach to the idea and instead of mere projections; it actually lays bare a practicable business plan under the ‘idea in practice’ section. A good attempt has been made at describing the process of how data analytics is used to propel a company into being an analytics focused organisation as opposed to a product focused one, by interlacing statistical methods with the overall competitive strategy.
However, the suggestion made in the paper about rewarding such analytics based contributions through metric based compensation and rewards doesn’t seem practical. All contribution cannot be measured that way. And such practices may themselves be time consuming and thus waste company resources. Further, recruiting specialists to analyst positions may not be needed, and only a handful of business will be ready to throw in an extra dollar for that.
Nevertheless, the article rightly stresses the importance of long term data collection, and sights the relevant example of how Dell benefited from years of meticulously collected data in its advertisement strategy.
Overall, the article does present this new and highly competitive field of analytics in a practical light. However it is left to be explained how the very same approach can become detrimental if companies become over obsessed with analytics and lose focus on the actual product they have to offer consumers. The article doesn’t take into consideration that sometimes “invention is the mother of necessity” and the business world has seen companies rise merely on the dint of their end products.
The later work of the same author titled Competing on Analytics: The Science of Winning deals with the subject in greater detail and is a handy reference for business strategists.