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Business Intelligence: Business Analytics Provides the Edge for Successful Companies
Companies that effectively use business analytics are stronger performers. Companies that are using business analytics for “data-driven decision making” have been shown to be 5 to 6 percent more productive than those companies that don’t. That’s the results of a study by academics from the Sloan School of Management at MIT and Wharton School of the University of Pennsylvania. Interestingly, while productivity increases are traced to investments in BI technology, the correlation to general investments in technology isn’t nearly as great.
Mr. Brynjolfsson, lead author of the study, said that this trend in exploiting information gained from data analytics “harbingers of a trend in how managers make decisions and has huge implications for competitiveness and growth.” 5 to 6 percent differences in productivity results is sufficient to separate the winning from the losing companies said Brynjolfsson.
Companies like IBM “get it”. Mr. Brynjolfsson singles IBM out by saying that “IBM alone has spent $14 billion on 25 companies that focus on data analytics. That business now employs 8,000 consultants and 200 mathematicians. IBM said last week that it expected its analytics business to grow to $16 billion by 2015.”
Data Analytics may transform businesses this decade much like the trend towards re-engineering swept businesses in the 1990’s. Robert J. Gordon, an economist at Northwestern University, said that “It’s never pure technology that makes the difference. It’s reorganizing things — how work is done. And technology does allow new forms of organization.”
