The Ever-Increasing Value of Analytics
The widespread adoption of data analytics by organizations of all sizes…
has been growing at an accelerating pace for a number of years – then came the Covid-19 pandemic. Prior to the pandemic, organizations had leveraged analytics in many ways including for operational improvements, cost savings, enhanced marketing optimization and performance, market research and competitor analysis just to name a few. As the pandemic continues, the value of analytics has become more apparent.
Surveys are finding that although businesses are cutting back spending on many of their technology initiatives because of the effects of the pandemic, spending on analytics might not suffer the same fate. The justification for adopting, maintaining, or increasing investments in analytics (even during a period of economic stress) are, not ironically, justified by the data.
Information driven organizations outperform their non-information driven counterparts:
According to research conducted by the McKinsey Global Institute, information driven organizations are:
- Twenty-three more times likely to acquire customers
- Six times as likely to retain those customers
- Nineteen times as likely to be profitable due to their outstanding customer acquisition and retention capabilities.
Additionally, recent academic research cited by McKinsey found that companies that incorporate data and analytics into their operations realize productivity gains 5% to 6% higher than those of their peers. Such a productivity disparity can offer significant competitive advantages. Through various surveys, we know that when asked about the importance of data and analytics to business growth and digital transformation efforts, large majorities of respondents rank them as either very or somewhat important.
Covid- 19 has driven organizations to adapt their application of analytics to better understand the effects of the pandemic on their operations, to make better-informed decisions, and to improve communication to employees and stakeholders. A number of specific applications of analytics that have proven their value during the pandemic include:
- Creating or revising revenue/profit projections to facilitate business continuity and recovery planning
- Identifying tasks that would be more effectively performed through automation• Assessing current skills inventories and gaps
- Gaining insight on the projected shortfalls of materials to facilitate product planning and supply chain management
Those organizations that have employed analytics to better understand and plan for the effects of COVID-19 will likely be more able to more adeptly transition into the post-Covid business world.
To read the three main categories of analytics download the full whitepaper here.