The Value of Business Analytics: Identifying the Path to Profitability

BUSINESS ANALYTICS AND THE TRADITIONAL VIEW

The classic view of strategic planning involves a fairly standard process that:

• Establishes a desired end-state
• Profiles the organization’s current context
• Creates a plan

The first step of this process typically involves identifying high-level organizational target outcomes. The planning process then focuses understanding where the organization sits relative to its environment. This situational analysis then drives the creation and execution of a strategy to achieve the identified targets, creating organizational change as an implicit requirement.

SWOT Analysis

This situational planning involves considering a variety of internal and external factors in turn, each of which has the potential to either create or destroy value within the organization. Often called a SWOT analysis, this process focuses on identifying organizational:

• Strengths
• Weaknesses
• Opportunities
• Threats

The organization’s strengths are competencies and assets that can be leveraged to create competitive advantage. Common examples include brand, production efficiencies, research and develop­ment capabilities, and access to unique resources. If effectively leveraged, these are often the driving force behind effective product differentiation.

The organization’s weaknesses are often either the counterbalancing force against a strength or a gap in competency. Common examples include a large organization’s lack of agility, an inability to effectively capitalize on the information ...