A growing number of companies view their data and analytics as assets with strategic value — including the potential for enhancing deeper partnerships.
New research by MIT Sloan Management Review, in partnership with SAS Institute, finds that a high percentage of managers see the importance of increasing the use of analytics in decision making. Fifty-eight percent of the survey respondents “strongly agree” that it is important for their organization to step up the use of analytics, and that percentage rises to 87% when it includes those who said they “somewhat agree.”
But where and how are managers using new data?
One of the more intriguing trends is the way some companies are sharing their data and analytics with business partners in order to meet strategic business objectives. In general, survey data suggests that companies for which analytics has improved the ability to innovate are more likely to share data with partners and suppliers: of survey respondents who agree that analytics is helping their organization innovate, about 45% collaborates in their use of analytics with partners, and about 28% collaborates with suppliers.
The statistics come from a recent survey of 2,037 managers. Early survey findings are reported in the article Raising the Bar With Analytics, by David Kiron, Pamela Kirk Prentice and Renee Boucher Ferguson, in the Winter 2014 issue of MIT Sloan Management Review. More detailed findings from the survey will appear in a research report to be published in the first quarter of 2014.
The article cites the example of WellPoint, a U.S. health insurer based in Indianapolis, Indiana. WellPoint “is using analytics to help forge a strategically important payment model with physicians — one that rewards providers when they reduce overall healthcare costs and enhance quality and health outcomes,” write the authors. “Specifically, WellPoint is converting administrative claims and authorization data into useful information about populations of patients and sharing this information with physicians and their care teams to aid their decision making and care giving. This innovative and collaborative approach gives providers better visibility into the cost and quality of care their patients receive and reflects a major shift in the type of relationship WellPoint creates and maintains with its providers.”
As well, a number of the companies interviewed for the project say they are reaching beyond their own data to feed their analytics processes. Combining internal data sets with external data is, as it turns out, typical of most big data projects: the vast majority — 88% — of respondents from companies with big data initiatives say their organization uses a mix of external and internal data.
Some of the takeaways from the survey findings:
1. The pressure to develop more effective decisions through analytics is growing across industries.
2. As companies use analytics to improve their ability to innovate, they tend to collaborate more through their use of analytics.
3. Analytics becomes an important medium through which organizations interact with both internal and external stakeholders.
4. Organizations that innovate with analytics don’t merely increase their use of analytics in decision making; they also change the way they behave as organizations.
This article draws from Raising the Bar With Analytics, by David Kiron (MIT Sloan Management Review), Pamela Kirk Prentice (SAS Institute) and Renee Boucher Ferguson (MIT Sloan Management Review), which appeared in the Winter 2014 issue of MIT Sloan Management Review.