The Value of Business Analytics: Identifying the Path to Profitability

DELIVERING VALUE THROUGH RENEWABLE RETURN

A final reason behind why organizations are increasingly applying business analytics for competitive advantage has to do with its potential for regular incremental return. Unlike the typical investment model where a given investment delivers a one-off return (which may be staggered over a number of years), business analytics has the potential to generate new returns year on year with relatively minimal additional investment.

Because the competencies used within a business analytics team can be applied to multiple business problems, the organization has the potential to reuse these competencies to deliver new returns. And, because business analytics can be readily translated into operational processes, historical gains can be continually captured over time.

Analytics is one of the few areas in business that can truly deliver renewable returns. Unlike many business investments, the return on technology and skills investment is not limited to the project to which they are initially associated; by being linked to generalizable assets, the investment can be continually releveraged to give additional incremental returns.

A good example lies in the development of a predictive modeling competency. The first project may involve reducing customer churn rates; the total costs booked against this project include:

• Hiring and training of new staff
• Technology platform acquisition
• Systems integration work

On successful completion, the project will accrue ...