Analysis on the article

“Competing on Analytics”
By Thomas H. Davenport

Submitted by

Jue Yadanar Win

65190266
Summary of Main Arguments and Concepts in the Article
Analytics in business context is applied to gain insights into competitors differentiation,
customers behaviors, market trends, operational efficiency, sales opportunities, and other aspects
of an organization. It plays a crucial role in today’s business world in optimizing their strategies,
improving decision-making processes, and identifying areas for improvement. “Competing on
Analysis” in the article means the strategic approach to be a key differentiator in their
marketplace through data analytics as a strategic weapon. The article discussed several ideas and
strategies in practice to become an analytics competitor, and the impact of transformation across
various business functions. Moreover, it discusses how industry leaders such as Marriott, Dell,
Amazon, Wal-Mart and etc., in specific fields utilize the power of data analytics in their business
operations, master their data analytics, and the strategies to be pioneers in their specific fields.
Furthermore, the article emphasizes the adoption of analytics, how analytics is instrumental in
guiding the organization to pinpoint the creation of analytics initiative, implement the right
focus, the right people, the right culture and the right technology with examples to be able to
learn from what those firms do. On the whole, this article advocates a comprehensive and
deliberate integration of analytics into competitors differentiation, corporate culture, procedures,
and decision making across the board.

Strategic Implementation of Analytics:

Examples of Success Stories, and their Competitive Strategies
Since business today is awash in data and data crunchers, organizations are competing on
analytics to transform their organizations from traditional business models to analytics models to
get the competitive advantage and differ from competitors in their respective industries. This
article delves into how organizations implement analytics to the forefront of analytics
competition. Furthermore, it explores how other industry leaders’, including Marriott, Harrah's,
UPS, Walmart, and Dell have strategically leveraged their analytics to enhance their operations.

Marriott International is one of the best competitors in analytics, that corporation has
paved the way for analytics in its system since 20 years ago for identifying the price that will
maximize yield, or profits. Strategic analytical approaches serve the foundation for Marriot’s
analytics success.First, Marriott diversified its analytics application beyond traditional
companies, by broadening the scope of its analytics applications beyond room pricing to include
conference center and catering optimization. Second, Marriott granted the local managers the
authority to override the system suggestions, offering flexibility in unanticipated circumstances
like Hurricane Katrina. Marriott has developed a revenue opportunity model, which calculates
actual revenue as a percentage of optimal rate. This figure increased from 83% to 91%, reflecting
the successful revenue management analytics that Marriot took throughout the enterprise.
 Organizations need to prioritize the right focus to compete in their respective industries
and utilize analytics effectively. Competitors in analytics emphasize the importance of directing
resource intensive efforts strategically. For example, Harrah’s focuses its analytics on increasing
customers' loyalty, customer service, and optimizing pricing and promotions. Similarly, UPS
shifted its focus from logistics to customer experience with the goal of providing superior
services. Their key strategy is selecting specific functions or initiatives aligned with an
overarching business strategy. Furthermore, the most proficient analytics practitioners not only
just measure their own navel but also help their customers, and vendors measure theirs. Walmart
utilizes its Retail Link system which allows the suppliers to monitor product movement, plan
promotions, layouts within stores, and reduce stock-outs. By engaging with suppliers in
data-driven decision-making, WalMart enhances efficiency and ensures optimal product
availability which contributes to its competitive success.

For effective analytics implementation, organizations must develop a data-driven culture

to encourage employees for informed decision making through quantitative evidence. Harrah’s is
a prime example of transitioning from paternalistic rewards to performance metrics related with
finance and customer service results. Beracha of Sara Lee Bakery, also known as “data dog”
established the leadership standard by proactively pursuing and depending on data. Thus, the
right culture: data-driven culture is one of the key strategies employed by companies to
successfully compete on analytics. Another effective approach is to choose the right people for
analytical talent. Companies that compete on analytics, such as Amazon, prioritize analytics in
their strategies by strategically hiring Gang Yu who is a renowned professor of management
science and software entrepreneur, to lead its global supply chain. Moreover, organizations need
to prioritize the right technology for continuous innovation in statistical algorithms and decision
science approaches. A robust strategy which involves significant investments in systems that
collect and integrate data from various sources is essential. For example, Dell illustrates the
needs of the right technology. Dell invested seven years to create a database that includes 1.5
million records of all its print, radio, broadcast TV, and cable ads. Dell links the database to sales
information for every area where the advertisements were displayed.

To summarize, in the age of data dominance, organizations and industry leaders are
strategically leveraging analytics to transition from traditional models, and enhance
competitiveness. Success lies in diversifying analytics applications, fostering the right culture:
data-driven culture, the right focus, the right people: top-tier talent, and the right innovative
technology.
Challenges and Potential Pitfalls in Analytics Adoption for
Organizational Success
Adopting analytics as a fundamental element of organizational strategy comes with both
challenges and potential pitfalls. One of the primary challenges is having the need for a unified
approach. Competitors in the analytics industry, such as Capital One and Barclays Bank,
approach analytics projects as a cohesive, enterprise-wide strategy. On the other hand, traditional
companies may face chaos due to decentralized administration of analytics tools and data,
resulting in inaccuracies, and inconsistencies.

Another potential pitfall is the balance between data-driven decisions and human
intuition, especially when it comes to hiring decisions. Even though analytics can provide
insightful information, human judgment may still be essential when making decisions concerning
personality and character. Finding the right balance between relying on data and gut instincts
becomes crucial for executives with an interest in analytics. Additionally, organizations need to
tackle the challenges of data management issues. Competitors in analytics place a strong
emphasis on centralized teams to guarantee proper data management, and prevent errors and
inconsistencies from expansion. This requires significant investments in technology as well as
the creation of data-driven culture. Cultivating a data-driven culture is an important aspect. The
potential pitfalls in cultivating cultural intelligence is resistance in transitioning from traditional
or paternalistic reward systems to a performance metric based approach. Employees may find it
challenging to adapt to a new culture, especially if it contrasts with the previous organizational
culture and practices.

Furthermore, having the right focus is essential. Competitors in analytics make deliberate
decisions about where to focus their resource-intensive efforts, aligning initiatives with overall
business plans. However, organizations should avoid diffusion in focus with their initiatives and
maintain clarity on the business goals of each. Choosing the right people with analytics skills is
paramount. Competitors in the analytics industry have preference for hiring people with strong
conceptual problem solving skills and quantitative analytical skills. The hiring of Gang Yu by
Amazon, a well-known expert in optimization analytics, portrays the focus on acquiring top
talent. However, such kinds of individuals are scared and recruiting such specialized talent may
be competitive and challenging.

In conclusion, even though analytics offer the competitive advantage, companies still
need to deal with the pitfalls and challenges related to unified approaches, balancing data-driven
decisions with human intuition, developing a data-driven culture, strategic focus, and recruiting
the talents. A comprehensive and well-integrated strategy takes into account people, technology,
and culture is necessary for success in analytics competition.
Reflecting the Importance of Business Analytics regarding to the
Article
From the analysis of the article, the significance of data analytics in the contemporary
business environment is paramount. Companies are strategically utilizing analytics to shift from
traditional models and get the competitive advantages. Expanding the use of analytics apps,
developing the culture of data-driven decision making, focusing efforts are the most important
scope of analytics, and investing on such technologies for those areas lead towards the right path.

One significant example that highlights the importance of business analytics is Facebook.
Facebook uses analytics to enhance user experience, make the users engage in their platform, and
digital advertising. The analytics of Facebook study the preferences of users and show the posts
and advertisements that match with a user’s interests. This keeps users happy with their
application and helps advertisers reach the right audiences. Another example is Netflix which
uses analytics to recommend movies, and shows based on the previous watch history. Netflix
analyzes viewing history, ratings, and user interactions to offer recommendations that would
satisfy the users expectations and experiences. The ability of Netflix to create popular and highly
anticipated series by identifying trending genres and storylines through data analytics is another
reason for the success in producing original content of Netflix.

In conclusion, this analysis highlights the vital role of data analytics in modern business.
Companies strategically leverage analytics, as seen in Facebook and Netflix, highlights the
significance of integrating analytics, and cultivating a culture of informed decision making for
success in today’s dynamic business landscape.