The Value of Business Analytics: Identifying the Path to Profitability

DEALING WITH RESOURCE CONSTRAINTS

The key challenge for most teams is balancing time spent on operational and research activities against time spent delivering growth and enabling initiatives; because of their repetitive nature, operational activities tend to consume consistent amounts of resource time. While they are essential in maintaining existing value, they don’t normally create any incremental value for the organization.

The Catch-22 of Business Analytics

Delivering growth initiatives in the face of having highly limited resources is a critical challenge for a team looking to create value. Unfortunately, every time a team delivers a growth initiative, it needs to allocate more time to support the ongoing resulting operational activities.

Because of this necessary relationship between value creation and ongoing value maintenance, business analytics teams will usually continue to add value until they reach saturation point. At that point, all their available resource time will be consumed maintaining the value they originally created. Once they hit that point, their ability to create new value becomes severely constrained.

In an ideal world, this would not present a problem. By the time the team hits saturation point, additional investment is relatively easy to arrange as the organization:

• Has strong management commitment to the use of business analytics
• Understands the value that business analytics brings
• Is already leveraging business analytics in multiple areas of the business ...