Competing on Analytics by Thomas H. Davenport and Jeanne G. Harris

Last updated: Oct 3, 2023

Summary of Competing on Analytics by Thomas H. Davenport and Jeanne G. Harris

Competing on Analytics by Thomas H. Davenport and Jeanne G. Harris is a comprehensive guide that explores the power of analytics in today's business world. The authors argue that organizations that effectively utilize data and analytics have a significant competitive advantage over their competitors.

The book begins by defining what it means to compete on analytics. It emphasizes the importance of using data to drive decision-making and highlights the success stories of companies that have embraced analytics as a core part of their strategy.

The authors then delve into the different types of analytics that organizations can employ. They discuss descriptive analytics, which focuses on understanding past performance, and predictive analytics, which uses historical data to make future predictions. They also introduce the concept of prescriptive analytics, which goes beyond prediction to recommend actions to optimize outcomes.

Throughout the book, Davenport and Harris provide numerous examples of companies that have successfully implemented analytics strategies. They highlight how organizations such as Amazon, Netflix, and Procter & Gamble have used data to gain a competitive edge in their respective industries.

The authors also address the challenges and potential pitfalls of competing on analytics. They discuss the importance of having a data-driven culture and the need for strong leadership to drive analytics initiatives. They also emphasize the importance of data quality and the need for organizations to invest in the necessary infrastructure and talent to effectively leverage analytics.

In addition to discussing the strategic and operational aspects of competing on analytics, the book also explores the ethical considerations surrounding data and analytics. The authors emphasize the need for organizations to be transparent and responsible in their use of data, and they discuss the potential risks and implications of data breaches and privacy concerns.

In conclusion, Competing on Analytics provides a comprehensive overview of the power of analytics in today's business landscape. It offers practical insights and guidance for organizations looking to leverage data to gain a competitive advantage. The book emphasizes the importance of embracing a data-driven culture and provides numerous examples of companies that have successfully implemented analytics strategies. Overall, it is a valuable resource for any organization looking to harness the power of analytics to drive success.

1. The Power of Data-Driven Decision Making

In "Competing on Analytics," Davenport and Harris emphasize the transformative power of data-driven decision making. They argue that organizations that effectively leverage data and analytics have a significant competitive advantage over their peers. By using data to inform decision making, companies can gain insights into customer behavior, market trends, and operational efficiency, enabling them to make more informed and strategic choices.

One example highlighted in the book is the case of Harrah's Entertainment, a casino company that used data analytics to revolutionize its marketing strategy. By analyzing customer data, Harrah's was able to identify high-value customers and tailor personalized offers to them. This data-driven approach resulted in increased customer loyalty and profitability for the company.

2. The Importance of Building Analytical Capabilities

Davenport and Harris stress the significance of building analytical capabilities within organizations. They argue that having a strong analytics team and infrastructure is crucial for effectively leveraging data and driving business outcomes. This involves hiring skilled data analysts, investing in technology and tools, and creating a culture that values data-driven decision making.

The authors provide examples of companies like Amazon and Netflix, which have built robust analytical capabilities that have become integral to their success. These companies have invested heavily in data infrastructure and have a strong focus on hiring and developing analytical talent. By doing so, they have been able to extract valuable insights from their data and use them to drive innovation and competitive advantage.

3. The Role of Leadership in Driving Analytical Culture

Davenport and Harris emphasize the importance of leadership in fostering an analytical culture within organizations. They argue that leaders need to champion data-driven decision making and create an environment where analytics is valued and embraced by all employees.

The authors provide examples of companies like Capital One, where the CEO actively promotes the use of analytics and encourages employees to make data-driven decisions. This top-down approach helps create a culture where analytics is seen as a strategic asset and empowers employees to use data to drive business outcomes.

4. The Potential of Predictive Analytics

Davenport and Harris highlight the potential of predictive analytics in driving business success. They argue that by using historical data and statistical models, organizations can make accurate predictions about future outcomes and take proactive measures to capitalize on opportunities or mitigate risks.

The authors provide examples of companies like UPS, which uses predictive analytics to optimize its delivery routes and reduce fuel consumption. By analyzing historical data on traffic patterns, weather conditions, and package volumes, UPS can make real-time adjustments to its delivery routes, resulting in cost savings and improved customer service.

5. The Ethical Considerations of Analytics

Davenport and Harris discuss the ethical considerations associated with analytics. They argue that organizations need to be mindful of the potential risks and implications of using data and analytics, particularly in areas like privacy, security, and bias.

The authors highlight the case of Target, which faced backlash when it used predictive analytics to identify pregnant customers and send them targeted advertisements. This raised concerns about privacy and the ethical use of customer data. Davenport and Harris emphasize the importance of organizations being transparent and responsible in their use of analytics to maintain trust with customers and stakeholders.

6. The Need for Continuous Learning and Adaptation

Davenport and Harris stress the importance of continuous learning and adaptation in the world of analytics. They argue that organizations need to constantly update their analytical models and techniques to stay ahead of the competition.

The authors provide examples of companies like Google, which continuously experiments with new algorithms and analytical approaches to improve its search engine. By embracing a culture of experimentation and learning, organizations can uncover new insights and drive innovation.

7. The Role of Analytics in Customer Experience

Davenport and Harris highlight the role of analytics in enhancing the customer experience. They argue that by analyzing customer data, organizations can gain insights into customer preferences, behavior, and needs, enabling them to deliver personalized and tailored experiences.

The authors provide examples of companies like Amazon, which uses analytics to recommend products to customers based on their browsing and purchase history. This personalized approach enhances the customer experience and drives customer loyalty.

8. The Impact of Analytics on Decision Making

Davenport and Harris discuss the impact of analytics on decision making within organizations. They argue that by using data and analytics, organizations can move away from gut instinct and intuition-based decision making and make more objective and evidence-based choices.

The authors provide examples of companies like Procter & Gamble, which uses analytics to inform its product development decisions. By analyzing market data and consumer insights, Procter & Gamble can make data-driven decisions about product features, pricing, and marketing strategies, resulting in increased success and market share.