Analytics at Work: Smarter Decisions, Better Results

Those who have read Competing on Analytics may incorrectly assume that there is not much new to learn in this sequel to it. Thomas Davenport and Jeanne Harris with Robert Morison do indeed review and reaffirm the core principles of analytics but they offer more, much more in this recently published book. For example, they continue with the five-stage model for analytical maturity ("God has decreed that all maturity models have five stages") but supplement it with an abundance of "pragmatic suggestions" with regard to the design and implementation process; they also offer a five-letter framework (DELTA) that has been adopted by numerous companies in recent years. "The first part [of Analytics at Work] is also more oriented to current practice. Part two opens things up a bit to address some of the capabilities that analytically oriented organizations will need in the future. Some firms are actually address those capabilities today." DELTA is an acronym that helps to explain how to put analytics to work: D for accessible, high-quality data E for an enterprise orientation L for analytical leadership T for strategic targets A for analysis With regard to the five-stage model or process: Stage 1: Analytically Impaired ("flying blind" because of the lack of one or more of the prerequisites for effective analytical work such as sufficient and reliable)) Stage 2: Localized Analytics (Although there are pockets of activity, they isolated, fragmented, disconnected, inconsistent, etc.) Stage 3: Analytical Aspirations (Several managers recognize the need, begin to explore options, may attempt to collaborate, but progress may be slow because some critical DELTA factor has proven too difficult to implement) Stage 4: Analytical Companies (Managers develop an enterprisewide perspective; also, they and their associates are eager to innovate and differentiate but the strategic focus is not as yet grounded in analytics) Stage 5: Analytical Competitors (The company routinely uses analytics as a distinctive business capability, one that serves as the primary driver of performance and value throughout the enterprise) Davenport, Harris, and Morison explain with meticulous care how to complete the process to reach and then remain at Stage 5. I especially appreciate the fact that they anchor their observations and recommendations within a real-world context, within a frame-of-reference, that is frequently provided by a mini-case study of an exemplary organization such as Olive Garden, an Italian restaurant chain owned by Daren Restaurants, that uses data on store operations to forecast almost every aspect of its restaurant operations. "Best Buy was able to determine through analysis of its Reward-Zone loyalty program member data that its best customers represented only 7 percent of total customers, but were responsible for 43 percent of its sales." I also appreciate the brilliant use of various Tables that organize, showcase, and emphasis key points. For example,

Analytics is a hot topic and executives looking to get value from business intelligence. This book discusses how they do that. I recommend this book as perhaps THE book for people looking to establish and sustain an ability to use information in decision-making and process execution. There is a sweet spot for business books between the illustration of a business idea and a discussion of its practical implementation. Business books that are too high level offer great ideas that appear realistic only to angels. Too low of a level and it's a technical manual that makes the idea seem mundane. I mention this because Analytics at Work rests firmly in the sweet spot between these extremes. Davenport, Harris and Morison have taken ideas originally expressed in Competing on Analytics and taken them to the next level - reality. If competing on analytics describes the characteristics of an `analytic competitor' and their principles, then this book moves from principle to practice discussing issues from data management, through to changes in corporate structure and culture. The book is comprehensive without being a compendium. It is clearly written to provide a guide that helps you apply analytics to your situation without being a set of instructions that are applicable to few people. Strengths: The book has frequent and recognizable examples of executives and applications of analytics. These examples illustrate the author's points without appearing contrived. The examples and case studies are a real strength particularly as they come from companies with different levels of analytic intensity. This gives the reader the ability to see how analytics comes in many sizes and fits different situations. A practical discussion of the issues related to analytics rather than a relentless boosting of the idea and principles. The authors recognize that business intelligence has been around for a while, that people will adopt analytics at different levels of intensity and that makes the book real to executives and practitioners. The book offers a comprehensive discussion of the strategies, organization structure and execution implications of analytics in the enterprise. For a 214-page book, Analytics at Work covers a lot of ground without seeming rushed or superficial. Graphical, the book makes effective use of frameworks and diagrams that bring the concepts into tighter focus and reality. Executives can use these diagrams to understand and perhaps more importantly to share with others to explain how analytics apply to their business. Challenges: While the book discusses analytics at all levels, it tends to concentrate analytics activities into a specific group of subject matter experts. While I agree that analytics requires specific skills, setting these `quants' up as a special group may limit the spread of analytics across the enterprise. This is a minor point that does not reduce the value of the book. Overall Analytics at Work is a

Well composed follow-up by the writers of "Competing on Analytics: The New Science of Winning" and Robert Morison, coauthor of "Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent". While the previous effort by Davenport and Harris focused on the use of analytics for competitive strategy, this book focuses on deploying analytics in day-to-day operations. Use of the "five stages of analytical competition", which describes the analytics phases through which firms pass as their level of maturity increases from "analytically impaired" or "flying blind" to "analytical competitors" or "enterprise-wide, big results, sustainable advantage", continues here, but is now superimposed by what the authors deem the "DELTA" success factors - accessible, high-quality "Data", "Enterprise" orientation, analytical "Leadership", strategic "Targets", and "Analysts" - that are associated with the transition of firms from one level of competitive strategy to the next. The authors further this presentation of the analytical DELTA by discussing the embedding of analytics in business processes, the building of an analytical culture, the continual reviewing of analytical approaches, and meeting challenges along the way. According to research conducted by the authors, 40% of major business decisions are not based on facts, but on the manager's gut. As the authors point out, "sometimes intuitive and experience-based decisions work out well, but often they either go astray or end in disaster: executives pursue mergers and acquisitions to palliate their egos, neglecting the sober considerations that create real value; banks make credit and risk decisions based on unexamined assumptions about always-rising asset values; governments rely on sparse intelligence before deciding whether to wage war. Such are the most extreme cases of ill-informed decision making. In other cases, nonanalytical decisions don't lead to tragedy, but they do leave money on the table: businesses price products and services based on their hunches about what the market will bear, not on actual data detailing what consumers have been willing to pay under similar circumstances in the past; managers hire people based on intuition, not on an analysis of the skills and personality traits that predict an employee's high performance; supply chain managers maintain a comfortable level of inventory, rather than a data-determined, optimal level; baseball scouts zoom in on players who 'look the part', not on those with the skills that - according to analytics - win games". And "while analytics are not perfect, we prefer them to the shoddy alternatives of bias, prejudice, self-justification, and unaided intuition. Humans often make long lists of excuses not to be analytical, but there's plenty of research showing that data, facts, and analysis are powerful aids to decision making, and that the decisions made on them are better than those made through intuition or gut instinct. Therefore, use analyti

I received a pre-release copy of Tom Davenport' new book Analytics at Work: Smarter Decisions, Better Results. The book is a follow-on to Competing on Analytics: The New Science of Winning and is a shorter, pithier book than its predecessor. Once again Tom collaborates with Jeanne Harris and this time Robert Morison of the Concours group. Where the previous book focused on so-called analytic competitors, this is about "analytics for the rest of us". It is a very readable book with some good practical advice that does not require the remaking of your company in a new image. It is also a quick read, it is only 180 pages or so, which should help get more people to read it. And I hope people do read it. As Tom says "The unexamined decision isn't worth making" and too many companies and organizations are making unexamined decisions, failing to apply data they have about what works and what does not, making the same mistakes over and making dumb decisions. Like Tom I think it is time for this to stop and this book will tell you how. The book's focus is broad, covering how analytics can address key questions of information and insight in each of the past, present, future - reporting, alerts and forecasting give information in the past, present and future while modeling, recommendations and predictions/optimization do the same for insight. For me the most useful part of the book is part one - a set of chapters describing The Analytic DELTA - Data, Enterprise, Leadership, Targets and Analysts - what Tom regards as the 5 critical elements of successful analytic adoption: * D - accessible, high quality data - I particularly like the focus on uniqueness as a criteria and on using the business need (decision) to drive data quality and integration * E - enterprise orientation not fractured analytic projects * L - analytical leadership * T - strategic targets - a crucial element, that of focusing on using analytics to develop distinctive capabilities. This chapter has a great list of processes that lend themselves to analytics and a very helpful "ladder of analytic applications" to develop from simple to more complex analytic solutions * A - analysts - a nice chapter with good thoughts on how to manage analysts as a strategic resource. Part two addresses how to stay analytical through embedding analytics in business processes, building an analytic culture, reviewing your business comprehensively and embarking on an analytical journey towards "more analytical decisions and better results." I really liked the focus on embedding analytics in business processes - this is a topic close to my heart and one we discussed in Smart Enough Systems: How to Deliver Competitive Advantage by Automating Hidden Decisions. The authors do a nice job of explaining why organizations need to adopt a test and learn mindset, to be always unsatisfied and mindful of change and to focus on an "industrial" analytic process. The authors end by pointing out that becoming analytic is not

I just received this book and read it quickly. I had read the Davenport/Harris "Competing on Analytics," which has come to be the Bible of business-oriented analytics books. This one is even more accessible, and is broader in its orientation. It's not just for companies that want to compete on their analytical capabilities, but for any organization that needs to make more analytical decisions. The DELTA framework is a clear way to describe the key factors necessary to become more analytical, and the chapters on culture and decision-making in the second half of the book are very helpful. The ideas in this book are unusually easy to apply and it includes handy frameworks and models. Given the rise in analytical activity in organizations, I predict that this book will be just as successful as the first one, if not more so because of its broader focus.