1. Make Better Decisions Thomas Davenport: Harvard Business Review Nov
Sara Terwall
5/3/2011

2. Agenda Background Making Better Decisions Competing on Analytics
Framework for Improving Decisions
Do’s and Don’ts
Competing on Analytics
Key Attributes of Analytics Competitors
Sources of Strength
Moving from an Analytics User to and Analytics Competitor
Discussion Questions

3. Background Consultant: Author: Professor:
Named one of the Top 25 Consultants in the world by Consulting magazine in 2003.
Named one of the 100 most influential people in the IT industry by Ziff-Davis magazines in 2007 and 2008.
Directed research centers at Ernst & Young, McKinsey & Company, CSC Index, and Accenture.
Author:
Thirteen books, including the first books on analytical competition, business process reengineering, knowledge management, and the business use of enterprise systems.
Hundreds of articles and columns for such publications as Harvard Business Review, Sloan Management Review, California Management Review, Financial Times, Information Week, CIO
Professor:
Babson College, Andersen Consulting Institute for Strategic Change, Boston University School of Management, The University of Texas

4. “In God we trust. All others bring data.” - W. Edwards Deming
Making Better Decisions

5. Framework for Improving Decisions
Four Steps
Identification
Inventory
Intervention
Institutionalization
Industry Examples
Educational Testing Service
Stanley Works

6. Do’s & Don’ts Don’t build a model you don’t understand
Make assumptions clear
Practice “model management”
Cultivate human backups
Don’t use a decision approach if it doesn’t apply

7. “Do we think this is true? Or do we know?” - Gary Loveman
Competing on Analytics

8. Key Attributes of Analytics Competitors
Widespread use of modeling and optimization
Capital One
Progressive
An enterprise approach
UPS
Proctor & Gamble
Senior executive advocates
Sara Lee
Moneyball by Michael Lewis

9. Sources of Strength The right focus The right culture The right people
The right technology
Data Strategy
Business Intelligence Software
Computing Hardware

10. Moving from User to Competitor
Apply systems/analysis to a range of functions
Top-down support of analytics from senior management
Make fact-based decision making not only best practice, but part of the culture
Don’t just hire people with analytical skills, but the very best skills
Manage analytics at an enterprise level

11. User to Competitor Cont.
Invent proprietary metrics
Use your data, but also share with customers/suppliers
Create a “test & learn” culture
Commit to building your capabilities for several years
Emphasize importance of analytics internally and externally

12. Discussion Questions
Of the 10 keys to becoming a competitor, which do you think is most important and why?
Aside from those previously mentioned, what are some companies you think use analytics to their advantage?
What companies do you think could benefit from increased focus on analytics?

13. Quiz
Which of the following is NOT one of Davenport’s four steps of decision making?
Identification
Inventory
Inspection
Institutionalization