Thursday, October 15, 2009

Competing for Analytics

Many companies in many countries have very strong reasons to pursue the strategies shaped by their analytics. Virtually all companies which are leaders in their respective arenas are aggressive analytics competitors and much of their success can be attributed to masterful exploitation of data. Rising global competition intensifies the need of this sort of proficiency. For example, western companies unable to beat the competition from their Chinese and Indian counterparts on product cost, are seeking the upper hand through optimized business process.

Companies now just embracing such strategies, however, will find that they take several years to come to fruition. For example, many companies in credit cards business find that they need several years of times before their strategy actually starts to work. They need to make process changes in virtually every aspect of their consumer business: underwriting risk, setting credit limits, servicing accounts, cross selling etc. These firms need to keep their managers in their jobs for longer periods because of time required to master quantitative approaches to their businesses.

Even if you talk about, politics, there are ample reasons to believe that success of political parties is largely dependent on the analytics of the data they gather regarding voter perception now a days. Democrats in US carried out extensive analysis of, what the US voter is mostly worried about: financial and physical health but not Iraq war!!

Bohemian companies in the investment world are purely competing on their strengths of their analytics. Today, competing on analytics is the new science of winning. More than ever before, business decisions have multimillion-dollar impact and multiyear consequences.

In case of sovereign decision making countries like India needs to learn a lot. Taking a point, recently India make FTAs with ASEAN countries but, decision was taken without much analysis of resultant profit and loss for the country. We need to fight on over core competencies not on over weaknesses. What's left as the basis for competition? Three things: efficient and effective execution, smart decision making and the ability to wring every last drop of value from business processes.

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