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Continuing my coverage of our 2008 Competing on Analytics series, I was in New York last night attending the executive dinner titled ‘Competing on analytics -Turning Potential into Performance’ that features thought leader and author Thomas H. Davenport, co-author of Competing on Analytics, sharing latest insights from his most recent groundbreaking research and best practices for analytics-based management.

Full disclosure: I have the steps backwards as I attended the second step in the series in Washington DC before I attended the first step, which is the dinner, but I think I am being forgiven given my travel schedule the last few months.

As I did for the Washington DC Apply IT event, I am blogging in near real time and paraphrasing some of what is occurring at the dinner.

Tom Davenport has a huge fan following and I am first in line. Advantage at these events is that I get to spend time with Tom and exchange ideas before everyone arrives because once they do, there is a circle around him that grows larger by the minute.

Fascinating behavior at this event was invitees were introducing themselves to each other with their name, organization they worked for and then identifying which level there were at. The level’s they are referencing here are where they fall on the Road map to becoming an analytical competitor as described in - you guessed it - the book Competing on Analytics. It is humbling to see that most have self-assessed themselves between Stage 2: Localized Analytics and Stage 3: Analytical Aspirations, and everyone enthusiastically shares the journey they have taken to get where they are and then what they need to embark on to make the big leap to the Stage 4: Analytical Companies and (the ultimate) Stage 5: Analytical Competitors.

Between cocktails and dinner Tom shared his latest insights and experiences and, like always, had everyone hanging off his every word. Everyone waited till he was done to ask questions and while I would like to give a synopsis of Tom’s presentation sans PowerPoint, I would not do justice to it. You have to hear him present it to get it right. I will however paraphrase the questions that were asked and my comments/ thoughts are italicized:

• Is there a correlation to the 5 Stage Model that road maps going from being analytically impaired to analytical competitor that Tom developed and is in the book and the 5 level model of executive capabilities that was defined by Jim Collins in his book Good to Great? Interesting idea and deserves some research and interesting anecdote from Tom was how 5 seems to be the magic number for this type of work including the SAS Information Evolution Model that is a 5 step maturity model as well.
• Have companies at Stage 5: Analytical Competitors successful in mainstreaming and extending the utility of analytics to the field / sales organization and their servicing organizations to drive the growth curves for the business?
• What happens when Analytical organizations acquire or merge with relationship centric companies? Where does the rationalization happen? Does the acquirer get to mandate its discipline on the acquired entity? What happens in merger? This seems like a research paper in the making.
• What is the level of effort and timeframe to go from Stage 1: Analytically impaired to Stage 5: Analytical Competitor? In true Tom style and with a straight face Tom’s response ‘2 years 56 days 3 hours 4 mins’ instantly reminding me of the elusive silver bullet question from the Washington DC Apply IT event.
• What unstructured and semi-structured data and its role in analytics? This has been my challenge to the marketplace for years, ever since my analyst / consulting days and I am excited to see that I am no longer in the company of only a select few that are thinking this way including SAS that has been investing in solutions for 10+ years to address this exact same challenge including our latest acquisition of Teragram to strengthen industry-leading text mining, analytics. I will also use this train of thought to blatantly promote my 3 part blog post on the same topic.
• When do analytics go too far? Another common thread from the Washington DC Apply IT event.

As in the previous blog post looking for fellow bloggers and onlookers, you are welcome to sound off, address, answer, add, refute or argue the questions and comments.

“In God we Trust, all others bring data.” – Barry Beracha at Sara Lee

I get to participate in several events, conferences and summits in a year, and yesterday I attended one in Washington DC where after a long time I am not presenting, doing press interviews or briefing analysts - but just attending. Jumping on the opportunity to blog in near real time and share an unadulterated view of what is being shared at what is by design a best practice forum.

The event is the first of the second step in the SAS and Intel 2008 Competing on Analytics series, designed to help decisions makers learn how to effectively use analytics within organizations The first step in the series is a round of executive dinners titled Competing on analytics -Turning Potential into Performance that feature thought leader and author Thomas H. Davenport. The co-author of Competing on Analytics, Tom shares the latest insights from his most recent groundbreaking research and best practices for analytics-based management.

Yesterday's event featured Jeanne Harris, co-author of Competing on Analytics and it was fascinating to hear how every organization in every competitive mix of every industry has access to the same market data and they have identical data collected and generated internally – but only a few fully leverage their information assets to compete on analytics by discovering the power of analytics to out-think and out-execute the competition. Jeanne provides great insight on how to apply the power of analytics in your business - without reinventing your organization to get it done.

The other featured speaker at yesterday's event was Dr. Calvin C. Johnson, Director of the Office of Research and Evaluation, Court and Offender Supervision Agency for the District of Columbia (CSOSA). What really drove it home and made it personal were the astounding stats that Dr. Johnson shared on the level of exposure we have with what has fundamentally become the warehousing of offenders in our prison systems: In Dec 2005, more than 7 million adults in the United States were either on community supervision (59% on probation and 11% on parole) or incarcerated (10% in jail and 20% in prison) – that’s roughly 1 in 32 adults.

What got my attention right away was how Calvin talks about the agency’s strategy as a business strategy; challenges as business challenges; front-line and middle-management; governance; best practices; transactions; customer demographics, profile and segmentation of their customer who are the offender population; and list goes on. With a mission statement of increasing public safety; preventing crime; reducing recidivism; and supporting the fair administration of justice, what I least expected to hear was how they use an actuarial approach to assessing risk to public safety.

Talk about leveraging analytics. Having worked in financial services industry for years now, it was the first time I heard an entity outside of the industry not only talking about actuarial approach to risk but actually applying it successfully and better than many in the financial industry. Calvin also shared the process of how they went about the pragmatic shift in their business – from getting executive sponsorship; selling it to the business by showing them the what is the ‘art of the possible;’ understanding business requirements etc. Showing us all the scars from the journey they undertook made it real for all of us at the forum. Paraphrasing the key questions and comments from the 70+ attendees ranged from:

• What are the characteristics of organizations that are poised to compete on analytics?
• Business Intelligence and Business Analytics – what is the difference? Is there one?
• How do you define, find and rationalize Key Metrics across the silos of the business and the associated data - Finance, Business, Marketing, IT etc.
• Lots of shelf-ware from the departmental buying days and while being tasked with rationalizing across all the different BI products. But quickly learning that the biggest challenge is the managing the ubiquitous tool of choice – Excel. How do you move the excel jocks away from creating more and more spread-marts?
• How do know your analytics are giving you the right answer?
• Value of using an external set of eyes (external to business but internal to the organization or someone external to the organization) to validate your analytical models.
• Key to fact-based decision making today is looking beyond the insular attributes of the business and factor in external artifacts e.g. what is the economy doing? While the debate continues on the use of the ‘R’ word what will it mean to our business whichever way it falls?
• And my favorite as it was a straight shot: Is there a silver bullet to bridge the abyss between IT and the Business? Is there at least one for where to start?

To net it out, here are the key takeaways from all the great discussions at the forum:

1. Critical need to identify a common meaning of terms and then examine their definitions within your specific organization.
2. Examine your high-level organizational objectives, i.e. customer retention, cost reduction, and increased market share. Align the critical organization dimensions of infrastructure, human capital, process and technology. Establish your Business Intelligence Competency Center (BICC) to organize and manage this effort.
3. Identify and mainstream analytical resources within your organization – analytics is at work all around your organization, but are you maximizing it? Seek it out and harness existing resources.
4. Create an analytics business model – identify an executive sponsor. Demonstrate what analytics can do for your organization. Recruit the necessary decision makers who can advocate the power of analytics.

Look for updates to this blog from the forums scheduled for Atlanta, New York, San Francisco and Chicago. And then from the next step in the series, How to compete on analytics: Try IT – Hands-On Workshops designed for practitioners to test drive SAS capabilities for business intelligence, data integration, data mining and forecasting.

Fellow bloggers and onlookers are welcome to sound off, address, answer, add, refute or argue the questions and comments shared above from the forum.