Deloitte Analytics Analytics Advantage Report 061913
Deloitte Analytics Analytics Advantage Report 061913
Deloitte Analytics Analytics Advantage Report 061913
Dear readers,
Tim Phillipps
Global Analytics Leader
Deloitte Touche Tohmatsu Limited
Introduction
Tom Davenport is a world-renowned thought leader and executive advisor on analytics. An acclaimed speaker, Tom
also is a widely published author, whose most recent book (with Jinho Kim) is Keeping Up with the Quants: Your Guide
to Understanding and Using Analytics. An information management pioneer, Tom has written or co-authored 16 bestselling business books and more than 100 articles, as well as several strategic business concepts in the areas of knowledge
management, human approaches to information management, business process reengineering, and enterprise systems.
CIO Insight named his Competing on Analytics book one of the Top 15 Most Groundbreaking Management Books, and
Ziff Davis again included Tom as one of only four IT management thought leaders on their 100 Most Influential People in
IT list.
1
Executive summary
In todays complex business environment, the field of data analytics is growing in acceptance and importance. It
is playing a critical role as a decision-making resource for executives, especially those managing large companies.
To shed more light on how companies are taking advantage of analytics, Deloitte Analytics commissioned
The Analytics Advantage, the first in an annual series of surveys focusing on the state of analytics readiness
at leading corporations and what the future holds. (See About the Survey.)
Results were analyzed from a mix of more than 100 online surveys and deep dive interviews with
senior executives at 35 companies in North America, the United Kingdom, and Asia conducted or overseen
by Tom Davenport.
In addition to the growth in importance of analytics and its prospects for the future, other central themes
emerged, including the varied ways in which analytics is structured and managed within these enterprises.
This signals that the practice of analytics, while progressing as a decision-making resource, remains in its
early development stages and will continue to evolve and mature as long as it generates tangible financial
benefits for the corporation.
Key findings
Analytics has arrived. Analytics is already an important
competitive resource for many companies, with fewer
than 20 percent of respondents stating that analytics
does not yet support their corporate strategies.
The best is yet to come. Ninety-six percent of
respondents feel that analytics will become more
important to their organizations in the next three
years. Two reasons there is plenty of room to grow:
a great deal of data is still not used for decision-making;
and many organizations have only rudimentary analytical
technology.
Better decision-making. Nearly half of all respondents
(49 percent) assert that the greatest benefit of using
analytics is that it is a key factor in better decision-making
capabilities. Another 16 percent believe that its greatest
benefit is better enabling key strategic initiatives. Nearly
two-thirds of respondents say that analytics play an
important role in driving business strategy.
Marketing and customers. Surprisingly, only 1 percent
of respondents believe that the greatest benefit of using
data analytics is identifying and creating new product
and service revenue streams, demonstrating its impact
on product and service innovation is not yet nearly as
Better decision-making
based on data
49%
Better enablement of
key strategic initiatives
16%
10%
9%
9%
5%
1%
Analytics capabilities:
The sum of the parts
As data analytics gains more attention, corporations and
organizations of all sizes and within most industries are
pursuing this valuable capabilitysometimes cautiously,
sometimes with great enthusiasm.
Organizations that lack executive sponsors are
traditionally slow to embrace change and are eyeing
analytics with more skepticism. In these circumstances,
smart analytics leaders are gaining advocates by taking
on small, focused pilot projects that are yielding
tangible results.
According to one executive in the insurance industry, the
driver for the acceptance and growth of data analytics in his
organization is to show how big data can help it shift from
experiential decision-making to having confidence that the
massive amounts of data that we collect can be useful in
making better decisions.
Most companies begin by dabbling in analytics and
becoming good in one or more applications, thereby
generating momentum for additional initiatives. Ultimately,
analytics is valued if it can be proven that it helps a company
become tangibly betterfinancially or operationally. And
indeed, most survey respondents55 percentreported
that analytics has significantly or fairly improved the
organizations competitive position.
Significantly improved
25%
Fairly improved
30%
29%
3%
14%
Key findings
Slow and steady wins the analytics race. Smart analytics leaders are overcoming
skepticism and gaining executive advocates by:
Tackling small projects that yield impressive results
Showing tangible, incremental improvementsfinancially or operationally
Demonstrating how analytics improves competitive positioning
In one example, the chief operating officer for a fastgrowing e-commerce business described customer
analytics as the most important thing his company is doing.
Why? Because it enables the firm to better segment existing
and prospective customers, allowing for more precise
targeting of advertising, pricing, and discount offers.
Income production
Cost reduction
9%
CEO
CFO
COO
18%
0%
CIO
15%
CMO
5%
5%
23%
4%
No single executive
20%
Key findings
Is investment in big data and analytics worth it?
The answerincreasinglyis yes. Not surprisingly,
the most valued impact of analytics is on income
production or cost reduction. Analytics delivers by:
Increasing sales
Identifying innovation opportunities
Forecasting financial performers
Understanding financial drivers
20%
38%
30%
12%
32%
23%
12%
10%
8%
3%
Other
12%
Key findings
Many businesses are experiencing an analytics leadership vacuum, making it difficult to
answer the question: Do we centralize or decentralize?
Organizations where analytics is most visible and valued have support from senior
leaders and are best able to determine how analytics initiatives should be structured
throughout the enterprise.
10
Barriers to overcome
4%
31%
31%
11
21%
13%
18%
49%
17%
9%
7%
12
13
Key findings
In some organizations, the acceptance and widespread adoption
of analytics have been curtailed by several barriers:
Quality of data
Inadequate size of or expertise from analytics staff
Rudimentary or basic IT infrastructure
Lack of executive advocacy
14
15
Key findings
Organizations are exploring numerous options in
creative analyticswith many evolving trends
focused on generating new revenue streams:
Packaging and selling valuable data
and insights to customers
Developing innovative customer relationship applications
Hastening the speed of go-to market offerings
Conclusion
16
17
Organizational profitability
Other
Individual
contributor
16%
8%
22%
Mid-level executive
or professional
(VP and above)
C-suite
(CFO, CEO, etc.)
33%
22%
Business unit
or division head
The respondents
Deloitte surveyed the individual most responsible for
analytics within each organization. More than half of
survey respondents were C-suite executives (33 percent) or
heads of business units or divisions (22 percent)which
further illustrates the growing importance of analytics at
the highest levels of the enterprise. Only 30 percent were
mid-level executives or individual contributors.
Organizational profitability
Very profitableabout 6% to 10% profit
Negativeloss making
N/Awe are not a
profit-making organization
The industries
The respondents industries cut across numerous sectors,
with the highest number (43 percent) in financial
servicesnot a surprise given that data collection and
reporting have been instrumental to the banking industry
for decades. But the diversity of the other segments
representedtechnology/communications/entertainment
(15 percent), health care (11 percent), consumer
products/retail (9 percent), energy and resources (8
percent), manufacturing (8 percent), etc.confirms
general observations that analytics capabilities are
increasingly important resources in all industries.
Respondents by industry
43%
15%
11%
9%
Banking
Technology/
communications/
entertainment
Health
care
Consumer
products/retail
8%
8%
Energy and
resources
Manufacturing
18
Learn more
www.deloitte.com/analyticssurvey