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Title: MIT Sloan Management Review.
ArticleTitle: Raising the bar with analytics
Vol: 55 No: 2 Date: 2014 Pages: 29 – 33
ISSN – 15329194;
Source: EBSCO:Academic OneFile:edsgcl.365535146 (via SFX)
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REPRINT NUMBER 55217
WINTER 2014 VOL.55 NO.2
Raising the Bar With
By David Kiron, Pamela Kirk Prentice and Renee Boucher Ferguson
SLOANREVIEW.MIT.EDUWINTER 2014 MIT SLOAN MANAGEMENT REVIEW 29
DATA AND ANALYTICS: SURVEY
IN THE WORLD of fashion, either you’re in or you’re out. And if you’re out,
you can turn to StyleSeek to help unearth your inner sartorialist.
StyleSeek is a website that helps visitors and members discover their
“StyleDNA” through a style game in which users choose their favorite lifestyle
images from a series of pictures — from
swanky front doors to magazine covers to
sporty or elegant cars. The outcome of these
selections is a user’s StyleDNA, which the site
then uses to recommend apparel options
culled from more than 200 retail partners, in-
cluding Macy’s, Nordstrom, Anthropologie
and J. Crew.
But Chicago-based StyleSeek is more than
an online recommendation engine; it is a busi-
ness that extracts a percentage of sales when
users click out to a retailer’s site and buy a
product within a 90-day window. StyleSeek
visitors who click through to a retail partner’s
site become buyers at the partner sites at a rate
that is well above the industry average click-
through conversion rate.
Although it’s a startup, StyleSeek has already
begun diversifying its business model. Some of the company’s retail partners
want to lease a version of its analytics platform to improve their understanding
of their own customers’ preferences and behavior. According to StyleSeek
founder Tyler Spalding:
We can take our technology and put it on partner sites to help them get a
deeper understanding of what’s happening with customers — what’s working
and why. A lot of our big retail partners have already said, “Sign us up for this
immediately; we’ll do whatever we need to do to get this working.”
Raising the Bar
Most managers surveyed agree it’s time to step up
analytics use. What’s more, a growing number of
companies are viewing their data and analytics as
assets with strategic value.
BY DAVID KIRON, PAMELA KIRK PRENTICE AND RENEE BOUCHER FERGUSON
More than half of
strongly agree that
needs to step up
are sharing their
data and analytics
Most big data
initiatives use a
mix of external
and internal data.
StyleSeek helps site visitors discover their “StyleDNA”
and then recommends apparel options from StyleSeek’s
30 MIT SLOAN MANAGEMENT REVIEW WINTER 2014SLOANREVIEW.MIT.EDU
DATA AND ANALYTICS: SURVEY
StyleSeek is part of a cadre of com-
panies that are feeding a growing
demand for better data and, in some
cases, changing their own business
models as a result.
An Increasing Appetite
for Data and Insights
A surprisingly high percentage of
managers see the importance of in-
creasing the use of analytics in decision
making, according to a recent survey of
2,037 managers conducted by MIT
Sloan Management Review, in partner-
ship with SAS Institute. (See “About
the Research.”) More than half of the survey respon-
dents strongly agree that their organization needs to
step up the use of analytics to make better business
decisions — and that percentage rises to 87% if re-
spondents who agree “somewhat” are included. (See
“A Need to Increase Analytics Use.”) This finding —
that a majority of survey respondents agree strongly
about the need to step up analytics use — holds true
across a range of industries. (See “A Trend That
Several forces are helping spur managers’ interest
in analytics, including increased market complexity
(for example, omnichannel retailing that encom-
passes both digital and bricks-and-mortar channels)
and the availability of better analytics tools and data.
And, of course, if competitors are using data to gain
an edge by making better or faster decisions, that
alters the competitive landscape a company faces.
The demand for better analytics is shifting how
some companies view their own and others’ data.
Many companies aim to become better producers of
goods or services by using their own data in more effective ways. But some companies, such as Style-
Seek, are beginning to change that paradigm. They
are aiming to become better producers of data and
analytics in part so that other businesses can use ana-
lytics in more effective ways. Such companies are
enhancing their business models by viewing their
own analytics platforms — their own expertise or
knowledge about customer segments or products —
as assets with strategic and commercial value.
Consider Entravision Communications, a
Spanish-language media company based in Santa
Monica, California, that owns and/or operates
more than 50 TV stations and 49 radio stations. It
also has multimedia assets in 11 regional markets,
with 106 local Web properties and other offerings
that collectively reach most of the U.S. Hispanic
consumer market, which had an estimated $1.2
trillion in purchasing power in 2013.
Entravision’s senior management believed that
the company could provide advertisers and marketers
with better information about targeting media
spots to the U.S. Latino community by integrating
ABOUT THE RESEARCH
To deepen our understanding of the challenges
and opportunities associated with the use of
business analytics, MIT Sloan Management
Review, in partnership with SAS, conducted a
survey in the summer of 2013 to which 2,037
business executives, managers and analysts re-
sponded from organizations located around the
world. The respondents included individuals in
more than 100 countries and a range of industry
sectors. Participating organizations also varied
widely in size. Respondents included MIT alumni and MIT Sloan Management Review
subscribers, SAS clients and other interested
In addition to these survey results, we inter-
viewed subject matter experts from a number
of industries and disciplines to understand the
practical issues facing organizations today in
their use of analytics. Our interviewees’ in-
sights contributed to a richer understanding of
the data. We also drew upon a number of case
studies to illustrate how organizations are using business analytics as a strategic asset. More
detailed findings from our survey will appear in
a research report to be published in the first
quarter of 2014.
In this article, the term “analytics” refers to
the use of data and related business insights de-
veloped through applied analytical disciplines
(for example, statistical, contextual, quantitative,
predictive, cognitive and other models) to drive
fact-based planning, decisions, execution, man-
agement, measurement and learning.
A NEED TO INCREASE ANALYTICS USE
Most respondents see the need to improve decision making
through analytics, with 87% strongly agreeing or somewhat
agreeing that it is important for their organization to step up
Somewhat disagreeStrongly disagree
agree Neither agree
9% 3% 1%
It is important for my organization
to step up its use of analytics.
29% 9% 3% 1%
SLOANREVIEW.MIT.EDUWINTER 2014 MIT SLOAN MANAGEMENT REVIEW 31
information from its own data stores with transac-
tional data from about 300 external sources. The
company set up a separate division, Luminar, to sell
these insights, along with access to the company’s
analytics platform, as a service to Entravision’s tra-
ditional media spot buyers. But executives soon
discovered that their customers wanted (and were
willing to pay for) Entravision’s information about
U.S. Latinos independent of their interest in buying
media spots. The company responded by shifting
the focus of its new information services division.
Data Sharing and Innovation
Some companies are sharing their data and analyt-
ics with business partners in order to meet strategic
business objectives. For example, WellPoint, a U.S.
health insurer based in Indianapolis, Indiana,
is using analytics to help forge a strategically im-
portant payment model with physicians — one
that rewards providers when they reduce overall
health-care costs and enhance quality and health
outcomes. Specifically, WellPoint is converting ad-
ministrative claims and authorization data into
useful information about populations of patients
and sharing this information with physicians and
their care teams to aid their decision making and
care giving. This innovative and collaborative
approach gives providers better visibility into the
cost and quality of care their patients receive and
reflects a major shift in the type of relationship
WellPoint creates and maintains with its providers.
In general, our survey data suggest that compa-
nies for which analytics has i mproved the ability to
innovate are more likely to share data with partners
and suppliers. Half of this year’s survey respondents
agree, somewhat or strongly, that analytics is help-
ing their organization innovate — and 16% believe
that strongly. (See “Analytics and Innovation,”
p. 32.) Those survey respondents who agree that
analytics is helping their organization innovate are
much more likely to say they collaborate with part-
ners and suppliers through the use of analytics than
respondents who don’t think that analytics is help-
ing their company innovate. (See “Collaboration
and Innovation,” p. 32.)
A number of the companies we interviewed that
are improving their ability to innovate with analytics
are reaching beyond their own data to feed their analytics processes. They combine their own hefty
data sets with external data. This approach to data,
as it turns out, is typical of most big data projects.
Our survey results indicate that the vast majority —
88% — of respondents from companies with big
data initiatives say their organization uses a mix of
external and internal data in those projects. Just
10% of respondents say their organization’s big
data projects use only internal data, and just 2% say
only external data sets are used. (See “Blending In-
ternal and External Data,” p. 33.)
Analytics and Business
Interestingly, among the 16% of respondents who
strongly agree that analytics is helping their organi-
zation innovate, 85% also strongly or somewhat
agree that the use of analytics is changing the way
their company does business. (See “Analytics and
Organizational Change,” p. 33.) For example, at
MillerCoors, the joint venture merging the U.S. and
Puerto Rican operations of SABMiller and Molson
Coors Brewing Company, analytics is a central part
of a corporate program to change the way the
organization conducts business. According to Rob
A TREND THAT CROSSES INDUSTRIES
A majority of respondents in all industries surveyed believe strongly that their
organization needs to step up the use of analytics.
It is important for my organization to step up its use of analytics.
All othersServices IT and technologyManufacturing Financial services Energy and natural resourcesHealth care Retail/wholesaleGovernment CommunicationsSomewhat agree Strongly agree
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
32 MIT SLOAN MANAGEMENT REVIEW WINTER 2014SLOANREVIEW.MIT.EDU
DATA AND ANALYTICS: SURVEY
Saker, business intelligence and analytics transfor-
mation leader at MillerCoors:
There were benefits and efficiencies with the
joint venture — for example, going from two
breweries to eight and being able to produce beer
closer to where people are drinking it. The chal-
lenge is, we never brought our organizations
together from a process or system perspective.
So our leadership and board decided that they
wanted to undertake a transformational effort to
bring together and improve the efficiency of the
organization. But they wanted to do it in a way
where it propelled us forward.
Analytics is the key component in this trans-
formation. We are leveraging analytics to make
better decisions and to invest our resources
more effectively: the right information to the
right person at the right location.
The connection (or lack thereof ) between im-
proving innovative capabilities with analytics and
analytics-based organizational change is equally
striking among those survey respondents who said
that analytics isn’t helping their company innovate. None of those survey respondents strongly agreed
that analytics is changing the way their company
conducts business. Just 4% somewhat agreed that
analytics has changed the way their company does
Making — and More
Analytics is not, of course, an end in itself; the value
of any analytics effort lies largely in whether it can
help decision making. The growing appetite for
analytics indicated by our survey reflects optimism
that traditional modes of decision making — those
relying to a greater extent on experience and intu-
ition — can be effectively enhanced with analytics.
But the finding that some respondents see ana-
lytics as both helping their organization innovate
and changing the way the company conducts its
business suggests that analytics can have an effect
on organizational behavior even beyond its influ-
ence on decision making.
Organizations that innovate and change their
business conduct in part because of analytics adopt
what are known as emergent or deliberate strate-
3 and in some cases both. Emergent and
We do not collaborate in the use of analyticsOthers SuppliersPartners Other areas of the company
0% 10% 20% 30% 40% 50%
With which of the following does your functional
area collaborate in its use of analytics?
*”Helped innovate” refers to respondents who
strongly or somewhat agree that analytics has
improved their organization’s ability to innovate.
ANALYTICS AND INNOVATION
Half of this year’s survey respondents somewhat or strongly agree that
analytics is helping their organization innovate — and 16% believe that
COLLABORATION AND INNOVATION
Respondents who say that analytics has helped improve their
organization’s ability to innovate are more likely to collaborate
with others using analytics.
The growing appetite for analytics re ects optimism that
traditional modes of decision making — those relying to
a greater extent on experience and intuition — can be
effectively enhanced with analytics.
Somewhat disagreeStrongly disagree
agree Neither agree
Analytics has helped improve my organization’s
ability to innovate.
Due to rounding, percentages do not total 100%.
SLOANREVIEW.MIT.EDUWINTER 2014 MIT SLOAN MANAGEMENT REVIEW 33
deliberate strategies have different characteristics
to which managers need to pay attention. Emergent
strategies typically require openness to new ideas,
as well as a willingness to pursue opportunities
even when they do not fit neatly with pre-existing
plans. Deliberate strategies demand a clear vision
about goals and the means of achieving them.
Entravision, for example, deployed both kinds of
strategies over time. It initially responded to shifts in
the media industry by intentionally developing a big
data infrastructure. It then reacted to market de-
mand, as did StyleSeek. WellPoint and MillerCoors
have also deliberately developed strategies to achieve
important business objectives with analytics. All of
these efforts are, however, in the early stages.
Whether or not managers are intending to use an-
alytics to improve decision making, innovate or
achieve important strategic objectives, there are clear
takeaways from the survey findings. One is that the
pressure to develop more effective decisions through
analytics is growing across industries. Another is that
as companies use analytics to improve their ability to
innovate, they also tend to collaborate more through
their use of analytics: Analytics becomes an important
medium through which organizations interact with both internal and external stakeholders. Thus, organi-
zations that innovate with analytics don’t merely
increase their use of analytics in decision making; they
also change the way they behave as organizations.
David Kiron is executive editor of MIT Sloan Man-
agement Review’s Big Ideas Initiatives. Pamela Kirk
Prentice is the chief research officer of SAS Institute.
Renee Boucher Ferguson is a contributing editor for
MIT Sloan Management Review’s Data and Analytics
Big Ideas Initiative. Comment on this article at
http://sloanreview.mit.edu/x/55217, or contact the
authors at [email protected]
1. R.B. Ferguson, interview with Tyler Spalding (Style-
Seek), “How Analytics Is Giving Fashion a Makeover,”
September 24, 2013, http://sloanreview.mit.edu.
2. The $1.2 trillion purchasing power estimate comes
from the Selig Center for Economic Growth at the Terry
College of Business at the University of Georgia. See “Mi-
nority Buying Power Grows in 2013, According to Selig
Center Report,” September 4, 2013, www.terry.uga.edu.
3. H. Mintzberg and J.A. Waters, “Of Strategies, Deliber-
ate and Emergent,” Strategic Management Journal 6, no.
3 (July-September 1985): 257-272.
Copyright © Massachusetts Institute of Technology, 2014.
All rights reserved.
The use of
way we conduct
AND EXTERNAL DATA
The vast majority — 88% — of respondents whose
companies have big data initiatives say those initia-
tives use a mix of external and internal data.
Respondents who strongly agree that analytics is
helping their organization innovate are more likely
to agree that analytics has changed the way the
company conducts business.
At MillerCoors, analytics is a
central part of a corporate
program to change the way
the organization conducts
external data External data
9% 3% 1%
Which of the following best reflects your use of
internal and external data for your big data initiatives?
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