At a time when companies in many industries offer similar products and use comparable technology, what’s left as a basis for competition is to execute your business with maximum efficiency and effectiveness, and to make the smartest business decisions that requires maintaining a highly capable team of man power, and continually training them up for betterment.
An organizations that want to be competitive must have some attribute at which they are better than anyone else in their industry—a distinctive capability.
This usually involves some sort of business process or some type of decision. Perhaps you sell commodity products and need to have the lowest possible level of inventory while preventing your customer from being unable to find your product on the shelf; if so, financial & analytical tools are often the key to supply chain optimization. On the other hand, perhaps your operational business processes aren’t much different from anybody else’s, but you feel you compete on making the best decisions.
Good decisions usually have systematically assembled data and analysis behind them.
Organizations that have selected one or a few distinctive capabilities on which to base their strategies, and then have applied extensive data, statistical and quantitative analysis, and fact-based decision making to support the selected capabilities. Financial & Analytical Tools themselves don’t constitute a strategy, but using them to optimize a distinctive business capability certainly constitutes a strategy. Whatever the capabilities emphasized in a strategy, tools can propel them to a higher level.
On the other hand, some industries are clearly more amenable to financial & analytical tools than others. If your business generates lots of transaction data—such as in financial services, travel and transportation, or gaming—competing on financial & analytical tools is a natural strategy (though many firms still don’t do it).
We didn’t invent the idea of competing on analytics, but we believe that this Seminar on “Financial & Analytical Tools for Decision Making & Problem Solving” (and the course content of the workshop/seminar) are the first to describe this phenomenon.
In this Workshop, you’ll find more on the discussion of the concept, more examples of organizations that are pursuing analytical competition, more management issues to be addressed, and more specific applications of financial & analytical tools, and how it can lead to better business performance. This seminar/workshop describes a variety of applications of competitive analytics, first internally and then externally, with customers and suppliers. Our focus in this seminar, however, is on companies that have elevated data management, statistical and quantitative analysis, and fact-based decision making to a high art.
There is considerable evidence that decisions based on analytics are more likely to be correct than those based on intuition. It’s better to know—at least within the limits of data and analysis—than to believe or think or feel, and most companies can benefit from more analytical decision making. Of course, there are some circumstances in which decisions can’t or shouldn’t be based on analytics.
Of course, any quantitative analysis relies upon a series of assumptions. When the conditions behind the assumptions no longer apply, the analyses should no longer be employed.
We’ve developed a road map describing the primary steps needed to build an effective analytical competitor. It involves key prerequisites, such as having at least a moderate amount and quality of data about the domain of business but the key variables are human, however.