Competing on Analytics, by Thomas Davenport, investigates the concept of analytics as a basis for business competition. The article describes the characteristics and practices of an analytical competitor and the changes companies must undergo to compete in industry. Analytics refer to skills, applications and practices used in business to examine past, present and future business performance. It collects significant amounts data, analyzes the data that is collected and uses a statistical model to help a company make optimal business decisions based the data that is collected.
This data focuses on developing new insight and understanding business performance – it is a strategic advantage in a business planning. The use of analytics will allow for companies to be distinguished and gain a competitive advantage over their competitors. Three key attributes were discussed: the use of predictive modeling and optimization, use of enterprise level management approach, and the adoption of this approach by senior management.
The use of predictive modeling and optimization looks beyond the basics and gathers necessary information to gain a comprehensive understanding of the customer; optimize techniques used to address issues of supply and demand and any other problems that may arise. An enterprise level management approach allows for multiple skills and resources to combine in an effort to measure the firm’s past and future performance. Support from senior management is imperative, as they must advocate for this approach based on statistical analysis and fact based decision making.
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Senior management must direct and coordinate the change in culture, processes, behaviors and skills. Each of these characteristics plays a vital role in facilitating positive change. Businesses must undergo substantial change to successfully build this analytical culture. To compete analytically, a firm must not solely concentrate on statistical and quantitative information, but the firm must also attain the right focus, build the right culture, hire qualified personnel, and use the right technology.
Given the opportunity and knowledge of how to compete at this level, organizations are sure to be successful in practice. When reviewing the concept of analytics, there are several companies where I have been employed that have applied this concept. Several components of this approach have been applied in the practices of the following companies: Nationwide Children’s Hospital, Akron Children’s Hospital, and Carolinas Rehabilitation. Nationwide Children’s Hospital Nationwide Children’s Hospital integrates the ideas of analytics by focusing on modeling and optimization.
NCH incorporates the use of a computer-based patient database, which generates an electronic record for each patient treated at the hospital or any of its outside facilities. Information retrieved from this system allows for management to assess data about patients and promptly analyze large amounts of statistical data. This information enables departments to focus on departmental trends, identify potential problems and plan for future processes. Operating with this idea at the helm, allows for this organization to increase efficiency, improve performance and increase patient capacity.
Akron Children’s Hospital – Audiology The Audiology Department at Akron Children’s Hospital utilizes the concept of analytics successfully by focusing on and providing multiple services in the scope of audiology: diagnostic evaluation and rehabilitative services. The audiology department focuses on each facet of comprehensive hearing health care. By providing these all-inclusive services to each pediatric patient, ACH – Audiology ensures high-quality continuity of patient care, thus reducing patient cost and error.
Carolinas Rehabilitation – Audiology Carolinas Rehabilitation – Audiology could benefit from the use of this approach within its practice. While providing top-notched patient care to its patients, this organization focused solely on providing the full gamut diagnostic audiological services. No rehabilitation services were provided. Many patients were evaluated, diagnosed and then referred to outside facilities for any rehabilitative services, reducing continuity of patient care.
By adopting the concept of analytics and integrating rehabilitative services in practice, Carolinas Rehabilitation – Audiology could ultimately create a comprehensive audiologic powerhouse in the Charlotte area, increasing patient efficiency, patient satisfaction and ultimately increasing overall departmental revenue. Each of the aforementioned companies demonstrate strengths in business and with the continued use of analytics, add many valuable aspects to the business, increase productivity and plan for a successful future. Reference: Davenport, T. (2006). Competing on analytics [Electronic Version]. Harvard Business Review, 84 (1), 98–107.