Winning with Analytics

In our analysis of two decades worth of financial balance sheets and income statements, Supply Chain Insights (www.supplychaininsights.com) found that all industry segments are facing slowing growth, struggling with pressures on margins, battling an increase in complexity and feeling a need to speed up cycles. Analytics offer a promise to help, but traditional analytics are not sufficient.

PROBLEM 1: Actionable Analytics are a Problem, both across the organization and across the value network. The average company has more than 150 systems. The concept of ERP reporting meeting the business needs of the supply chain department are never materialized. The environments are heterogeneous and dynamic. More and more companies are dependent on a network of suppliers. It is for this reason that cloud-based solutions are growing in acceptance. The use of cloud-based analytics offers quick time-to-value, industry benchmarking and standardized onboarding.

PROBLEM 2: Reskill to Think Differently. In the last decade, we defined a new set of terms to describe enterprise requirements. Today, these three-letter acronyms are an impediment versus a useful aid to help buyers of technology. The old terms — APS, ERP, CRM, PLM and SCM — have lost meaning. With a broken ecosystem of analysts, consultants and technology providers, there are fewer checks and balances. There is more selling and less education. The focus is on the sales cycle, not on raising the level of dialogue. Companies want to adopt the “safe” approaches to move with yesterday’s tried-and-true vendors. Ironically, this is the riskiest strategy. The path forward does not come from the large vendors.

PROBLEM 3: Ability to Use Different Data Sources. The traditional investment strategies are focused on investments that use structured data. The value of unstructured data is not well-understood in most organizations. Companies should begin with an audit of all of the forms of unstructured data that could be used to drive business insights. For most organizations this includes social data, customer call center data, contract management information, distributor and warranty data, quality data, third-party contract manufacturing comments on production reliability, and supplier development compliance sensing.

PROBLEM 4: Funding. The organizational funding model is a mess. Frustration with current IT organizations is high, and most sales and marketing organizations have begun to fund their own applications. Both are a problem. Companies need to build centers of cross-functional analytics and focus on cross-functional outside-in processes. This funding needs to be focused as an “investment” as opposed to a “definitive return on investment”.

PROBLEM 5: Leadership. Invest time to understand what is happening in analytical investments for leaders. Form a cross-functional team and build a guiding coalition that is focused outside-in. Ask for case studies and reference contacts. Be zealous on learning the stories of leaders in e-commerce, and the financial and insurance industries, and then brainstorm what this can mean for your organization. Listen to insights of the leaders in these organizations and then apply the lessons learned.