CHAPTER TWO WHAT MAKES AN ANALYTICAL COMPETITOR? DEFINING THE COMMON KEY ATTRIBUTES OF SUCH COMPANIES Flashcards
What is an analytical competitor?
An organization that uses analytics extensively and systematically to outthink and outexecute the competition.
List the four common key characteristics of analytically sophisticated companies.
- Analytics supports a strategic, distinctive capability
- Management of analytics is enterprise-wide
- Senior management is committed to the use of analytics
- Significant strategic bet on analytics-based competition
What does the DELTA model stand for?
- Data
- Enterprise
- Leadership
- Targets
- Analysts
What is a key requirement for analytical companies regarding data?
Integrated, high-quality, and easily accessible data about their businesses and markets.
True or False: Highly analytical firms manage their analytics resources in disconnected silos.
False.
What role does leadership play in analytical organizations?
Strong, committed leaders advocate for the development and use of analytics in decisions and actions.
Fill in the blank: Organizations need to target specific business capabilities and functions for the extensive use of _______.
[analytics]
What factor was added in the subsequent version of the DELTA model, called DELTTA?
Technology factor, particularly for big data analytics environments.
What percentage of firms surveyed indicated that analytical capability is a key element of strategy?
Ten percent.
Which industry was identified as having the highest analytical competitor levels in a survey?
Digital natives (online and e-commerce businesses).
Name one of the lowest-ranking industries in terms of analytical competition.
Health care providers or health insurance companies.
What is an example of a distinctive capability for Netflix?
Predicting customer viewing preferences.
How do analytical competitors approach the measurement of their capabilities?
They engage in both exploitation and exploration of measures.
What is the most commonly used measure in consumer finance?
FICO score.
True or False: Companies without a distinctive capability can still be analytical competitors.
False.
Which company is noted for adopting FICO scores earlier and more aggressively than others?
Capital One.
What is one potential future application of credit scores outside traditional finance?
Making life and health insurance decisions and pricing of premiums.
What should mission-critical capabilities be for analytical competitors?
The organization’s primary analytical target.
What does an enterprise-level approach to analytics involve?
Managing analytics as an organization-wide activity rather than in silos.
What was one of the reasons RBC Financial Group became a successful analytical competitor?
All customer data was owned by the enterprise and held in a central customer information file.
In a survey of organizations’ approaches to business intelligence, what percentage reported a formal needs assessment process across the enterprise?
22 percent.
What percentage of user-created spreadsheets reportedly contain errors?
Between 20 percent and 40 percent.
What is a common issue with departmental analytical applications?
They often remain in the background and may be left to individuals, leading to errors in user-created spreadsheets.
Research indicates that 20-40% of user-created spreadsheets contain errors.
What problem arises from individual analytics in organizations?
They create ‘multiple versions of the truth’ which complicates decision-making.
Different databases and calculations can lead to inconsistencies across departments.
