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Competing on Analytics > CHAPTER SIX A ROAD MAP TO ENHANCED ANALYTICAL CAPABILITIES PROGRESSING THROUGH THE FIVE STAGES OF ANALYTICAL MATURITY > Flashcards

CHAPTER SIX A ROAD MAP TO ENHANCED ANALYTICAL CAPABILITIES PROGRESSING THROUGH THE FIVE STAGES OF ANALYTICAL MATURITY Flashcards

1
Q

What is the primary focus of organizations like Google, Amazon, and Netflix?

A

Using analytics as the basis of competition

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2
Q

What is a key challenge for organizations wanting to develop analytical capabilities?

A

Managing the complexity of software applications, technology, data, processes, metrics, incentives, skills, culture, and sponsorship

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3
Q

How long does it typically take to develop a steady stream of rich insights from data?

A

Eighteen to thirty-six months

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4
Q

True or False: Highly analytical companies have no further work to do to improve their analytical capabilities.

A

False

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5
Q

What is the first stage in the road map to analytical competition?

A

Prerequisites to Analytical Competition

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6
Q

What must organizations improve first to prepare for analytics?

A

Their transaction data environment for consistent, quality data

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7
Q

What type of management team is unlikely to support analytical initiatives?

A

A ‘data-allergic’ management team

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8
Q

What should organizations assess to gauge their analytical capabilities?

A

Strategic insight, sponsorship, culture, skills, data, and IT

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9
Q

What is a common misconception about analytics and technology?

A

That analytics are synonymous with technology

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10
Q

What are the three main areas organizations need to assess for analytical capability?

A
  • Organization
  • Human
  • Technology
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11
Q

What is the significance of having a clear strategy in analytics?

A

To know which data to focus on and how to allocate analytical resources

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12
Q

Fill in the blank: Organizations initially focus on one or two areas for _______.

A

analytical competition

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13
Q

What is a critical factor for organizations to improve their performance drivers?

A

To quantify and improve insights into costs, profitability, growth, and shareholder value

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14
Q

What should managers consider to maximize strategic impact in analytics?

A
  • Distinguishing themselves in the marketplace
  • Identifying their distinctive capability
  • Key decisions needing analytical support
  • What information matters to the business
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15
Q

What is the path organizations can take if they have strong management commitment to analytics?

A

Full steam ahead

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16
Q

What is the main challenge for startups on the full steam ahead path?

A

Acquiring and deploying human and financial resources

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17
Q

What is the risk of organizations choosing the prove-it detour?

A

Remaining stalled indefinitely

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18
Q

How long may the prove-it detour add to the time needed to become an analytical competitor?

A

One to three years

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19
Q

What is an effective approach for organizations taking the prove-it detour?

A

A test-and-learn approach with small, tactical projects

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20
Q

What does a committed CEO need to articulate to drive analytical competition?

A

A clear and urgent need for change

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21
Q

What should organizations monitor to ensure strategic objectives are met?

A

Metrics tied to strategic enterprise objectives

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22
Q

What common trait do organizations that follow the full steam ahead path share?

A

They prioritize integrating analytics into their distinctive capability

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23
Q

What is the advantage of starting small in analytics implementation?

A

Allows for tactical applications, lower investment, and builds evidence of value

Smaller projects can lead to incremental insights that support larger initiatives.

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24
Q

What are the key steps in stage 2 of analytics implementation?

A
  1. Finding a sponsor and a business problem
  2. Implementing a small, localized project
  3. Documenting benefits and sharing with stakeholders
  4. Building localized successes

These steps help in gaining experience and support for broader applications.

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25
What can cause an organization to remain in stage 2 indefinitely?
Lack of results perceived by executives ## Footnote Without tangible outcomes, executives may hesitate to invest further in analytics.
26
What is the difference in management sponsorship between the 'full steam ahead' and 'prove-it' paths?
Full steam ahead: top general manager sponsorship; Prove-it: functional manager sponsorship ## Footnote Different levels of support can impact the pace and scope of analytics implementation.
27
What is the primary focus of PulpCo's management team?
Improving financial and decision-making capabilities ## Footnote PulpCo faced challenges due to a lack of accurate financial information.
28
What was a key realization for PulpCo's management regarding their decision-making process?
Many crises resulted from a lack of accurate financial and customer information ## Footnote This insight led to a shift towards analytical decision-making.
29
What breakthrough occurred at PulpCo that changed their approach to investments?
Detailed financial analysis revealed that a new plant would be a costly mistake ## Footnote This led to a cancellation of the project and re-evaluation of existing capacity.
30
What is stage 3 in the analytics maturity model characterized by?
Executive sponsorship and a focus on a fact-based culture ## Footnote The involvement of executives can significantly enhance the analytical capabilities of an organization.
31
What is BankCo's primary challenge in the context of wealth management?
Increased competition from robo-advisers and new market entrants ## Footnote Traditional banking models are under pressure due to evolving customer preferences.
32
What was the consequence of each department maintaining its own customer data at BankCo?
Executives could not get a complete picture of client relationships ## Footnote This fragmentation led to missed cross-selling opportunities and customer dissatisfaction.
33
What initiative did BankCo implement to improve its analytical orientation?
Creation of an integrated and consistent customer database ## Footnote This initiative aimed to enhance enterprise-wide analytics and customer insights.
34
What is a critical element of stage 3 in analytics development?
Defining achievable performance metrics and monitoring progress ## Footnote Metrics should align with broad business objectives to measure the success of analytics initiatives.
35
Fill in the blank: Stage 3 is triggered when analytics gain _______.
[executive sponsorship]
36
True or False: PulpCo is considered an analytical competitor at stage 5.
False ## Footnote PulpCo is not yet at stage 5 but has made significant progress.
37
What is the primary role of the analytics hub created in stage 3?
Foster and support analytical activities ## Footnote Centralizing efforts can lead to more efficient use of resources and expertise.
38
What did the executive team at BankCo conclude was necessary for improving customer relationships?
An enterprise-wide focus on analytics ## Footnote This approach aimed to eliminate departmental silos and enhance customer insights.
39
What was the outcome of introducing new performance metrics at BankCo?
Cleared the path for an enterprise-wide initiative ## Footnote New metrics incentivized collaboration and improved overall performance.
40
What is the primary focus in stage 4 of analytical development?
Building world-class analytical capabilities at the enterprise level.
41
What challenges do organizations face in stage 4 regarding analytical competition?
Managing cultural and organizational changes.
42
What is the role of a chief data officer in an organization competing on analytics?
To develop and implement the bank’s data and analytics strategy.
43
True or False: In stage 5, analytics are considered a key to an organization's strategy and competitive advantage.
True.
44
What does the acronym DELTA stand for in the context of building analytical capabilities?
* Data * Enterprise * Leadership * Targets * Analysts
45
What is essential for leveraging data effectively in analytics?
High-quality, diverse, and dynamic data.
46
Fill in the blank: The most critical challenge in stage 4 is allocating sufficient attention to managing _______.
cultural and organizational changes.
47
What are the components of the DELTA model?
* Data * Enterprise * Leadership * Targets * Analysts * Technology * Analytical Techniques
48
What must analytical leaders encourage to maximize the use of analytics in an organization?
A culture that views data as a strategic asset.
49
How do analytical competitors sustain their competitive advantage?
By avoiding complacency and continuously monitoring external environments.
50
What is a common pitfall for organizations in developing analytical capabilities?
Shifting resources away from analytics initiatives during tough business conditions.
51
What is the significance of having an enterprise perspective in analytics?
To avoid a fractured understanding of issues and resources.
52
What role do analysts play in an organization’s analytical capability?
They build and maintain the models and algorithms used throughout the organization.
53
What is a characteristic of stage 5 analytical competitors?
Proprietary metrics, analytics, processes, and data create strong barriers to competitors.
54
True or False: ConsumerCo exemplifies a company with strong executive-level commitment to analytics.
False.
55
What is a key responsibility of the IT department in supporting analytics?
Providing infrastructure, tools, and technologies for analytics.
56
What type of organizational changes are often resistant to analytics initiatives?
Cultural changes between 'quant jocks' and the old guard.
57
What is a benefit of having a critical mass of analysts focused on strategic issues?
Greater job satisfaction and opportunity to develop skills.
58
What do organizations often need to do to realize the benefits of analytical initiatives?
Monitor outcomes to ensure anticipated benefits are achieved.
59
Fill in the blank: The path to success with analytics requires _______ change for an organization.
significant.
60
What is the purpose of the DELTA model for executives?
To create a road map for building their organization’s analytical capabilities.
61
What can hinder the success of analytical initiatives if not managed properly?
Outcomes and priorities.
62
What happens to analytical systems if executive support is not widespread?
Interest in analytics will subside if key executives leave.
63
What is a common characteristic of analytical leaders?
They are passionate advocates for analytics and data-driven decision making.
64
What is the DELTA model?
A framework for analytical capabilities that requires all elements to work together for high performance.
65
What are the four types of outcomes critical to measuring an initiative's performance?
* Behaviors * Processes and programs * Products and services * Financial results
66
Why is changing employee behaviors important for improved financial outcomes?
Many analytical insights require employee compliance and changes in behavior to be effective.
67
What is a key factor in translating insights into actions?
Developing new programs to train customer-facing employees.
68
How can analytics be integrated into business processes?
By incorporating analytical support applications into work processes.
69
What is one way to create value with data?
By developing innovative products and services that incorporate data and/or analytics.
70
What should organizations specify to measure the success of an analytical initiative?
The desired financial outcomes.
71
What are common initial justifications for analytical initiatives?
Cost savings.
72
What should organizations prioritize when defining actions for analytical initiatives?
Projects with the greatest potential benefit to distinctive capabilities and competitive differentiation.
73
What is a common mistake organizations make regarding analytical technology?
Assuming that having analytical technology alone will transform the organization.
74
What questions should managers ask when evaluating new analytical initiatives?
* How will this investment make us more competitive? * To what extent will this investment make us more agile? * How does the initiative improve analytical capabilities? * How will it foster greater innovation and growth? * What complementary changes are needed? * Does the right data exist? * Is the technology reliable and cost-effective?
75
What are some common errors organizations make in analytical capability?
* Focusing excessively on one dimension * Collecting data without plans to use it * Attempting to do everything at once * Investing excessive resources with minimal impact * Choosing the wrong problem or technique
76
What is a concern regarding the intentional undermining of analytical competition?
Data analysis can be abused if statistics are manipulated.
77
What must executives do to foster a culture of objectivity in analytics?
Root out self-serving statistics and enforce objective criteria for decision-making.
78
What is the focus of the next chapter?
Managing an organization's commitment to key people using analytics.
79
Fill in the blank: The DELTA model requires all elements to be _______.
[working together]
80
True or False: Financial results are the only outcomes that matter in an analytical initiative.
False.

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