On Analytics and Operational Excellence

December 1, 2010 at 4:41 am Leave a comment

Innovation in technology doesn’t happen in a void. We always stand on the shoulders of giants. What is happening now in the world of smart water is a result of advancement in various fields, such as sensoring, communications and analytics, which lets us apply good statistical and mathematical approaches to noisy data that was impossible to tackle several years ago. This is exactly what TaKaDu does with its SaaS-based Water Infrastructure Monitoring.

Good analytics is not a phenomenon that occurs only in the smart water space, of course. Google Analytics and its uses to manage website traffic and revenue has brought the value of excellent visualization and the iconic time-series graph, into the world of many small businesses. These small business have never used advanced visualization and analytics to guide their decisions before; today it seems that cannot do without it.

The frontier for using data to make decisions has changed dramatically. It is not only real time. The more interesting point is that it also represents a complex network without requiring a model of the network – it just shows us how the network behaves, and makes analytics and decision making much simpler, with no need for complex  services and software to set-up. Google analytics is also a great example in that it is web-based, and does data collection simply and easily (just insert the HTML tag) – a pre-cursor to SaaS based analytics.

The Internet has shown us that to run certain businesses you need a competitive strategy that is data driven. This, in turn, lets you generate impressive business results. But the benefits of analytics extend to all businesses. Many leading businesses are using new tools to identify their most profitable customers and offer them the right price, to accelerate product innovation, to optimize supply chains, and to identify the true drivers of financial performance. Twenty years ago this was a huge investment that the largest only could afford. Today analytics can be accessed by all – it seems that the only requirement is to have a corporate culture that espouses data-driven innovation.

On a similar view, Steve Miller at Information management recently blogged on a survey by the Sloan Management Review and the IBM Institute for Business Value that recently collaborated to understand the challenges and opportunities with the use of business analytics.

The results are not surprising: good analytics means better performance.

“… organizations discriminate on usage of analytics by their perceived performance. The prevalence of analytics is much higher with top-performing organizations than it is with lower performers, a finding that is consistent across the many functional areas like finance, sales and marketing, and customer service. 53% percent of top performers use analytics to guide day-to-day operations in contrast to just 27% of laggards.”

An interesting note in the report is the difference in corporate culture in the way the insight from analytics is used to run the business and the way it is shared.

 “Aspirational cultures don’t encourage the sharing of information; Experienced cultures share information and insight on a limited basis; Transformed cultures, on the other hand, are effective sharing both information and insights.”

The report also notes that most companies expect that their analytics methods will change in the next 24 months, and move from reports and forecasts to visualization, simulation and predictive models.

Steve Miller also mentions the work of Davenport and Harris, the authors of “Analytcs at Work: Smart Decisions. Better Results”.

“They take the MIT/IBM self-reported relationship between analytics prowess and company performance a step further, using market returns to show that organizations which invest heavily in analytics outperformed the S&P 500 from 2002-2009. In addition, the authors argue that companies with strong analytical skills recover more quickly from economic downturns.”

Considering all the benefits of analytics and how easy it has become, just by tracking readily-available data (from sensor readings to clicks on sites) on a SaaS platform, we all better run and get some more analytics into our lives.

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Entry filed under: Smart Water Grid, Uncategorized. Tags: , , , , , , .

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