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This month, John Granger, General Manager of GBS Northeast Europe at IBM, writes exclusively for Finance Monthly, providing an in-depth insight into:


‘The future of business analytics and the role of technology in driving economic recovery’


of respondents agreed that their organisation had more data than it could use effectively. A solid information and analytics foundation provides the tools to extract knowledge from data, allowing leaders to make more informed decisions and improve business performance. Imagine if you could simultaneously see research,


financial news, market news and economic information. You could start to ask questions like “Which companies are likely to be acquisition targets in the next three months?” Analytics can allow you to put together logical connections among disparate pieces of information. For example, some banks are using analytics to


John Granger


A new trend has emerged in 2011 - investors are moving money out of emerging markets funds into developed economies in a renewed quest for stability. The challenge now is for companies to be as efficient and innovative as possible to deliver on investors’ expectations. When companies grow, economies prosper.


However, in mature markets growth relies on organisations having a competitive edge and encouraging their customers to spend more. So what can companies do differently and how could technology accelerate their growth? One approach lies in the use of analytics. According to a survey by the MIT Sloan


Management Review and IBM, which surveyed nearly 3000 executives world-wide, organisations using analytics in mature ways were three times more likely to outperform competitors than those just beginning to adopt it. More surprisingly, top performers in the survey were revealed to be 5.4 times more likely to use an analytic approach within their business processes.


This ‘transformed’


group – 20 per cent of the companies identified in our survey – had considerable experience in applying analytics across a broad range of functions, using it as a competitive differentiator and to drive revenue and customer profitability. Enterprises need advanced data analytics to cut


through massive amounts of unstructured data to get to prediction and discovery. In fact, 60 per cent


fi MONTHLY MARCH 2011


more accurately assess credit risk. Analytics tools provide a single view of the business, replacing previous time- and staff-intensive processes to help improve the quality and accuracy of business reporting for risk monitoring, portfolio and collateral analysis. Elsewhere, CPG companies are using analytics to better understand consumer sentiment and brand awareness online, enabling them to better target their marketing campaigns and increase sales. So, if analytics correlates to performance, what is hindering its wider adoption? Barriers often lie in the cultural and managerial challenges now facing companies i.e. having the courage and belief in new ways to approach, handle, share and use information to make better decisions. Respondents cited failure to understand how to apply analytics, lack of management bandwidth to focus on it due to competing priorities and lack of skills internally within the line of business as their top concerns. Applying analytics solutions is not always


straightforward and demands an in-depth understanding of an organisation’s challenges and how to maximise its market potential. However, it does provide tools and solutions which offer insight that can make a real difference to business performance. Companies using analytics are more likely to experience increased competitive advantage and be better positioned to take advantage of the economic recovery. fi


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