Almost two-thirds of organisations with well-established advanced analytics strategies are reporting both operating margins and revenues of 15% or more, reveals a new report from Forbes Insights and EY.
The worldwide report, Data & Advanced Analytics: High Stakes, High Rewards, found that the organisations who rated themselves as market-leaders in data and analytics, were those who have a well-established analytics strategy that is also central to the overall business strategy.
From these organisations, 66% reported revenue growth of 15% or more, and 63% have achieved operating margins with 15% or more growth last year. Furthermore, 60% of these organisations were happy to report an improvement in their risk profiles.
Such noteworthy returns highlight that a data and analytics strategy is not only effective but also necessary for global organisations to compete.
Of the 1,518 global executives surveyed, over half plan to invest more than US$10m into data and advanced analytics over the next 2 years.
Chris Mazzei, EY Global Chief Analytics Officer and Emerging Technology Leader, said:
“Traditional process-driven organisations are now being disrupted by the new era of businesses that use data as a strategic asset.
Companies have moved from pilot projects that originated in business units or countries to using data and advanced analytics at an enterprise level to rethink and reimagine their entire business to identify new opportunities.”
The report included companies with annual revenues of at least US$500 million and produced a maturity assessment rating how successful they are in applying analytics throughout the organisation.
These maturity assessment scores put China as the leading country, followed by the U.S who climbed up to 2nd place from 5th in 2015, with the UK in third.
Among new countries surveyed, Brazil and India established themselves among the top emerging pockets of analytics excellence.
When looking across different industries, telecommunications were top, with Technology and Manufacturing in 2nd and 3rd place respectively. The biggest fall came to retail which dropped from 4th in 2015 to 10th.
A year ago, just 16% of respondents to a similar survey reported a successful analytics strategy that reaches across functions such as finance, HR and the supply chain.
That figure has reached 23%, showing the growth of analytics integration, whilst still highlighting a huge opportunity for further growth.
Cross-functional alignment and collaboration arose from the results as the most difficult challenge to overcome when designing and implementing effective analytics strategies.
41% of companies still lack the required collaboration between IT, the data and analytics team and the business team.
Bruce Rogers, Forbes Chief Insights Officer, says:
“The top pain points in successfully imbedding analytics strategically throughout the business continue to be around the human element, not the technology.
Collaboration, culture and skills were cited as key hurdles throughout the business life cycle, creating a wider divergence between organisations that are focusing on the people aspects – and separating winners from losers.”
The organisations leading the way in applying analytics were found to be experimenting with advanced analytics across many parts of their business and then promptly scaling what works.
For further insights and recommendations, the full report can be accessed here.
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