These days, my e-mail inbox is overstuffed with opportunities to learn about and leverage business analytics (BA). It seems to be the topic du jour of current webinars, white papers, and software capabilities. BA has also captured the attention of our College of Business leadership, which means one of two things: either we are onto something before it has become a mainstream phenomenon (somewhat unusual in the academic world) or BA is yesterday’s news and we are just getting wind of it (a more common scenario). The problem, of course, is that the process for getting a new academic program approved moves at a snail’s pace.
Academic quandaries aside, is BA really something new, or is it a repackaged version of things we have been doing for years in the supply chain community? My skeptical side says the latter. After all, I helped teach a course titled “Supply Chain Analytics” from 1998 through 2002 for Accenture’s Supply Chain Academy. Measuring supply chain success by key performance indicators (KPIs) is a longstanding practice. And, we regularly use tools such as statistical process control charts, dashboards, and scorecards to understand results and promote continuous improvement. To the casual observer, that seems like quite a bit of analytics, right?
Rather than stubbornly and ignorantly dismiss the concept of BA, though, I decided to dig a bit further. According to TechTarget, BA is “…the practice of iterative, methodical exploration of an organization’s data with emphasis on statistical analysis. Business analytics is used by companies committed to data-driven decision making.” In a highly informative article, Dave Wells suggests that BA is more than number crunching, statistical analysis, and optimization. He suggests that “the essence of analytics lies in the application of logic and mental processes to find meaning in data. Through these mental processes, we create the capacities that define intelligence – abilities to reason, plan, predict, solve problems, abstract, understand, innovate and learn.” All of these capacities are critically important in dynamic supply chain environments.
Depending on whom you ask, BA is a set of software tools, an integral part of business intelligence (BI), the next iteration of BI, or a driver of competitive advantage. It allows organizations to make more effective decisions that deliver better outcomes to the bottom line and drive high performance, suggests a recent Accenture white paper. Amongst this continuum of perceptions, TechTarget provides a simple table that delineates BA from BI.
It is clear that both BI and BA are critical for supply chain success. BI provides us with the visibility and knowledge to manage more effectively. We can monitor supply chains in near real time and be more responsive to changes and problems. In contrast, BA provides understanding that can be used for proactive planning of the supply chain. It provides us with insight into underlying causes of problems and insight into trends that impact supply chain performance. Collectively, BI and BA give us a more complete picture of past, current, and future performance.
With this enhanced vision, numerous improvements can be achieved. Participants in the Computerworld/SAS study Defining Business Analytics and its Impact on Organizational Decision Making identified more than a dozen potential BA benefits. As the graphic reveals, most of them are highly relevant to supply chain operations.
In the end, my skepticism regarding BA is largely unwarranted. It appears to me that BA can provide essential capabilities to enhance supply chain success. The key is to link BA to what supply chain managers are already doing in BI. I also think that my university needs to move faster in bringing BA (and more BI) to the classroom.
What do you think of BA – just another buzzword or a key to competitive advantage? I’d be interested in hearing your experiences and opinions.