IT analytics: Action or paralysis?

The word ‘analysis’ can provoke all sorts of reactions. At a dinner party it can make you sound like you are either very dull or very clever; in a supply chain review meeting it can put fear into the eyes of logistics managers and stifle energy if presented in a negative light.

But regardless of that, analysis can uncover the real story. It can sweep away exuberant but ill judged attempts at innovation and guard against over confident sales projections. It can open the eyes of production teams who think they have nothing to do with sales, and demonstrate what’s truly possible for visionaries.

Analysis is based on fact, and like any other science, becomes even more powerful when mixed with the art of experience and entrepreneurial drive.

So, as analysis on the economy continues to tell us things are tough, and getting tougher, it might be time to take the reins of the analysis beast and steer it towards growth.

Differentiation is the key to growth. But how can analysis of multiple situations or scenarios help you to differentiate?

Analytics with a difference

Mostly, we judge the importance of analysis on the results it achieves – we recognise it when it finds that hidden gem that makes you more attractive to a profitable customer group, when it uncovers that 1% cost saving that allows you to gain a small but important move on pricing within the market and when it shows a team where inefficiency really hides. But rarely do we think that analysis itself can be the differentiator we’re looking for.

In 2010, the MIT Sloan Management Review, in conjunction with the IBM Institute for Business Value, undertook research across nearly 3,000 executive managers and analysts to understand the impact analytics is having on growth and produced a report: Analytics: The new path to value. The overall finding was that topperforming organisations use analytics five times more than lower-performers. But is it just a matter of top-performers being able to afford the change in business culture and the space and time to invest in analysing every aspect of their business? Or is their attention to detail in analysis behind their original rise to success – often from humble origins?

Patrick Mosimann, CEO of PMSI and AlignAlytics, believes there’s a bit of both.

“I’m obviously a big believer in analytics, as I spend my days striving to do it better and faster on each client challenge we face,” he says. “But never underestimate the energy of an entrepreneur to drive business growth. Analytics on its own isn’t the answer.”

Without the vision or passion for growth, analytics can hinder or simply confuse warns Mosimann. “What can really change my day is when I meet a team that is open to using analysis insights to drive real action or change. That’s when you can almost feel the illusive ‘differentiation’ in the room.”

So how do you identify and leverage an analytics culture, or begin to foster one for growth? There’s no easy answer but Mosimann explains how the journey can begin with a single question.

Listen to your data

“There is no single product or software you can buy, or even a 6 step-programme you can undertake. It’s about listening. Listening to everything from the hum of your production line, through to the opinion of your customers. Collecting data is where it all starts.”

Jabil Circuit is a leading manufacturer with 60 plants in over 33 countries. It embarked on this journey with the team at PMSI and AlignAlytics, feeling the listening exercise might be insurmountable. Steve Thompson, senior director of finance transformation at Jabil, talks about the journey.

“AlignAlytics initially helped us define a vision for analytics and develop a road map for getting there that was aligned with our major business priorities.”

Mosimann explains further. “Going through the listening exercise, alongside the overall vision and strategic objectives, we were able to understand where analytics needed to deliver the most value first. The data integration debate for any client is a continuing issue and one which keeps about sixty per cent of my data scientists busy. Have we got the right data? Can we trust the data? How can we integrate data?”

These are all difficult pieces of work says Mosimann, and they require real talent. “But they can be so much easier with the right attitude from management, which Jabil certainly has.”

Mr Thompson, talks about the success this has given them in differentiating themselves.

“PMSI’s data scientist team and its rapid prototyping capabilities were able to help build Jabil an award winning analytics library and gain faster adoption throughout the organisation. More recently this work has helped extend ‘line-of-sight’ and bring the long and short term planning process closer together.”

PMSI data scientists were able to work with the team at Jabil to rapidly develop KPIs, reports and business processes to support the analytics that could help drive the growth strategy. This is an ongoing process with the PMSI team continuing to help develop the long term deployment of Jabil’s IBM suite of analytic tools.

This framework now forms the foundation of the analytics culture and strategy throughout Jabil. It is this approach that continues to give them a differentiation in their performance as it continues to evolve, and has won them IBM’s Enterprise Wide Analytics Customer Award for 2012.

Jabil’s Thompson goes on to explain how these new analytics capabilities make a difference.

“Our CFO was relaying a story of a debate around inventory and revenue patterns. The debate ceased as soon as he put the analytics up and the group then turned towards looking at solutions. Now I think we’ll be able to spend a lot more time actually adding insight and supporting business decisions. We see that we will be able to apply this to all areas of our organisation.”

Avoiding paralysis

There is however the other side of the coin. What happens when too much analysis creates paralysis in an organisation? Mosimann describes some of his experiences.

“It’s certainly something to be wary of. I have seen the so called ‘analysis-paralysis’ become almost a badge of honour. Teams can become consumed by the technology; data visualisation can overtake the need for good insight.”

How can companies avoid this? Mosimann says “It seems simple but making sure that strategic vision or leadership is driving the analytics culture can keep people focused on what’s important.”

Is your leadership ready to provide this focus and enable effective exploitation of analytics? Taking the PMSI/AlignAlytics benchmarking survey could be the first step in finding out if this cultural readiness is in place: http://bit.ly/TMAnalyticsCulture