Competing on Analytics

Now that analytics have come into vogue, we are seeing the beginnings of what might be called “quantitative showmanship” whereby companies leverage their analytic capacities in the marketplace seeking competitive advantage. Still, it is difficult to “fake” analytic reasoning, which might explain why competing on analytics is so powerful. In truth, while some companies are truly taking the lead in analytics, others may be deluding themselves into believing their analytic capabilities are greater than they are.

Companies seeking to become analytically competitive should first assess the current state of their extant capabilities. Prof Thomas Davenport and Jeanne Harris in their book, Competing on Analystics (Harvard, 2007), present a framework of five stages of analytic development (see below). "These stages can describe the path that an organization can follow from having virtually no analytical capabilities to being a serious analytical competitor." But, while many companies fancy themselves to be analytic competitors, many possess only localized capacities, and some are simply analytically impaired.

Source: Adapted from Davenport & Harris, Competing on Analytics (2007), p. 35.

Being someone who works with analysts from around the world on a regular basis, I have a unique vantage point from which to assess how companies and governments are doing. Here are some lines that epitomize what I see more often than not:

Leaders who “don’t get it.” There is nothing more discouraging for an analyst than the leader who listens to an analytical proposition, and then asks something like, "is this experimental?” Leaders who are not versed in financial risk analysis might consider reviewing these subjects with a statistics coach in order to reacquire their poise and confidence with quantitative reasoning.

People who “hate” numbers. Let’s face it, not everyone is an analyst, which is fine. Still, some people truly despise thinking quantitatively. As companies foray deeper into analytical competition, it is necessary that we begin to recognize and advance the people who in fact “love” to think quantitatively.

Processes that “swirl” in support of conjecture. For example, many IT installations are premised on false hopes and promises, and implementation of technology solutions in isolation cannot affect analytic advantage. It is important that we begin to discipline IT departments to ground technology projects upon facts that are validated by hard rather than soft evidence.

Technology that fails to capture, sort, and make sense of data. For example, companies have reached the point where fancy office applications alone do nothing to add value. What is needed are better analytical tools that have the capacity to acquire, encode, modulate, and output information arrays in a form that is useful and actionable for creating and sustaining competitive advantage.

While I am delighted to see analytics moving into the limelight, we have a long way to go before companies across America can honestly claim to be analytic competitors.

From Populism to Pluralism

With presidential elections underway in the US, it seems a new electorate stands ready to participate, not just as voters, but as purveyors of power. By this, I mean that today’s voters seem less interested in the presence and content of who a candidate is, than in reshaping the nature of the presidency itself, regardless of who eventually fills the office.

Indeed, we live in exciting times as populist values, myths, and mores come face-to-face with the forces of pluralism. Evidence of a new economy is now indisputable as we head deeper into the third millennium. But, what of a new politic as well? I ask this recognizing that historically, political reform tends to lag economic upheaval.

If it is true that universal suffrage solidified populism in the modern age, it now appears that America is once again restless as it agitates for reform of the presidency as an institution, away from its modern function as the podium of populist pundits, into a fulcrum from which the voices of pluralist reason are leveraged, of and for the people.

The peoples’ call for change is not simply about electing a new president, but about changing the very nature of the presidency as society navigates its way through populism toward pluralism in the new century. Perhaps we will see democracy reborn in our time.

IT Implementation Failures

An alarming number of information technology (IT) projects fail. The oft-cited statistic is that greater than half of all IT implementations are out of variance with one or more critical requirements or specifications.

Of particular concern is that value-added resellers dressed up as "independent" consultants are frequently behind these failures. The troubling pattern is that the problem or opportunity to be solved is never validated by hard evidence. Hence, the client buys the "wrong" solution, while the "real" problems and opportunities remain out of scope. To be fair, not all value-added resellers focus on aligning specific IT solutions with any and every problem. Other problem-solving approaches such as evidence-based management and consulting are gaining traction in response. In the mean time, more and more firms are seeking some "fix" for a failed or failing IT initiative.

How do you know when your IT project is "going bad?" Here are some warning signs offered by CIO Magazine (2007):

• Project team lacks substantial buy-in and interest in the project’s success
• Poor communication between stakeholders and project team members
• Few interim deliverables, so tangible progress is not demonstrated
• Bad news isn’t allowed to be shared, meaning denial is pervasive
• Project team works lots of overtime, suggesting the schedule is slipping
• Project resources are frequently diverted to other activities
• Interim milestones are often missedReducing project scope is viewed as an acceptable means to meet budget and schedule requirements

ESL International (2006) offers this list of flags:

• No one has a firm idea of when the project will be finished and most people have given up trying to guess
• The product is laden with defects
• Team members are working excessive hours—20 or more hours per week of involuntary overtime
• Management has lost its ability to control progress or even to ascertain the project’s status with any accuracy
• The customer has lost confidence that the project team will ever deliver the promised goods
• The team is defensive about its progress
• Relations between project team members are strained
• The project is on the verge of cancellation
• The morale of the project team has hit rock bottom
• The customer is threatening legal action

I recently had a career IT professional say to me that most of the IT projects he had been involved with over the years were, in his words, "experimental." The remark stunned me, but perhaps explains why so many IT implementations fail. Many IT professionals started their careers as programmers, network administrators, and installation specialists. In each of these roles, "trial and error" problem-solving techniques prevail, so it is not surprising to see the same cohort of IT experts continuing to rely on these same methods. What is changing however is that IT projects now undergo continuous scrutiny for return on investment, and many IT professionals are unprepared for this reality by either training or temperament.

If your IT project appears to be in one or more of the states described above, it may be time to bring in another set of eyes to see just what is going on, and perhaps consider an entirely different approach to your firm’s needs.