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Businesses fail to make the most of operational analytics

Few manufacturers have successfully mined their operational data to improve their business processes

Less than 30% of businesses using analytics to drive operational efficiency have actually managed to improve business operations, according a study from Capgemini.

In its survey of 608 companies, only 29% said they had successfully achieved their objectives in operational analytics initiatives; 40% said they had achieved only moderate success.

The survey found that 41% of the businesses that Capgemini looked at struggled to introduce analytics initiatives in their operations.

“They have mostly implemented proof of concepts and are struggling to realise benefits from their analytics initiative,” the company’s Going Big: Why Organisations Need to Focus on Operations Analytics report stated.

At the other end of the scale, only 18% of businesses have used analytics in operations as a “game-changer”. According to Capgemini, these companies have integrated most of their analytics initiatives with their business processes and have realised the desired benefits from their analytics initiatives.

Worryingly, a fifth of companies admitted their efforts had not borne fruit despite the extensive integration of analytics with business processes.

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The Capgemini report stated: “Operational analytics can make organisations more productive and smarter. But achieving this potential rests on a number of key principles: a robust data strategy focused on making the maximum use of data and making analytics an essential part of the decision-making process in operation.

“Organisations are pivoting towards operational analytics as it can both increase the efficiency and performance of the back office as well as boost the customer experience in the front office,” said Anne-Laure Thieullent, head of big data in Europe, for Capgemini’s insights and data practice.

“However, despite the focus, there are factors limiting the success of these projects – specifically siloed datasets, fragile governance models, inability to harness third-party data sources, and an absence of a strong mandate from leadership teams.”

According to Capgemini, US companies appear to be leading in the field of operational analytics, with 47% of US-based businesses saying that analytics is an integral part of their decision-making process, compared with just 28% in Europe. The prominence of US organisations tallies with a recent resurgence in US manufacturing and will drive US manufacturing competitiveness in the coming years, Capgemini predicted.

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"At the other end of the scale, only 18% of businesses have used analytics in operations as a “game-changer”. According to Capgemini, these companies have integrated most of their analytics initiatives with their business processes and have realised the desired benefits from their analytics initiatives."

I find this crazy and so unexpected, but maybe I shouldn't. People don't realize the true benefit of analytics or think about it as a game changer as it can be.

--KB

Karen Bannan, commenting for IDG and Informatica
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There seems to be a huge assumption that having more and better data will automatically lead to people making better decisions. This is totally unproven in general, and in some studies I believe that people show worse decision performance due to information overload.

Businesses need to invest in better decision technology - all the good data is worth nothing if it doesn't result in better decisions being taken. This is part of the field of operations research which has been studied extensively since the 1950s, so it is not new and 'sexy', which I suspect is why it has largely been neglected.
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