“Companies must incorporate analytics into their strategic vision and use it to make better, faster decisions.”
This, according to a post by Nicolaus Henke, Jacques Bughin, Michael Chui, James Manyika, Tamim Saleh, Bill Wiseman, and Guru Sethupathy of McKinsey and Company, in reference to the McKinsey Global Institute (MGI) study The Age of Analytics: Competing in a Data-Driven World For CPG companies, this means “integrating new analytics capabilities into existing operations and strategies.”
It’s just not that easy
The McKinsey post states that manufacturing industries are only capturing 20%-30% of the value that data and analytics has to offer due to siloed data in legacy IT systems and skeptical leadership. CPG companies face the hurdle of complacency in overhauling existing systems predating the analytics revolution and because companies have simply functioned without these capabilities for so long. This is particularly true in trade promotions where limited data visibility, incalculable ROI and uninformed practices have left trade promotion management labeled as an outdated practice and an acceptable loss. Unfortunately, this leaves companies unwilling to reap that value of an analytics initiative behind the competition.
“Leading companies are using their capabilities not only to improve their core operations but also to launch entirely new business models. The network effects of digital platforms are creating a winner-take-most situation in some markets.”
"Manufacturing industries are only capturing 20%-30% of the value that data and analytics
has to offer due to siloed data in legacy IT systems and skeptical leadership."
In other cases, it is not a reluctance to change that hinders an organization, but an unawareness of how their company practices need to evolve with the analytics initiative. The post states “Some companies have invested heavily in technology, but have not yet changed their organizations so they can make the most of these investments. Many are struggling to develop the talent, business processes, and organizational muscle to capture real value from analytics.”
The leaders accept the challenge
The first thing that needs to be done is accepting the challenge of overhauling existing systems because the simple fact of the matter is that becoming an industry leader starts with a willingness to face the obstacle ahead. Company executives, notably CFOs because of their transformative role as a company leader, can be the catalyst at this point. “The first challenge is incorporating data and analytics into a core strategic vision,” states the McKinsey post. By stepping forward and laying the groundwork for an analytics overhaul, executives have the power to get everyone on the same page understanding the need for change and what to expect moving forward. This puts less stress on not only departments and those who may fear being replaced by analytics, but it also makes the CFOs daily life less stressful because they won’t be pulled in several directions at once by varying departments with a different understanding of the objective.
"The first thing that needs to be done is accepting the challenge of overhauling existing systems."
Furthermore, leaders recognize that the change they fear the most is already happening. “Introducing new types of data sets (“orthogonal data”) can confer a competitive advantage, for instance, while massive integration capabilities can break through organizational silos, enabling new insights and models.” Therefore, the cost of not accepting the benefits of analytics threaten not only current growth but also future innovation. “New analytical techniques can fuel discovery and innovation.”
T-Pro Analytics has helped their clients increase their ROI through the implementation of our trade promotion optimization software, which is among the most innovative out there in the market. By jettisoning the hackneyed spreadsheet system of analytics, T-Pro can provide the real-time insights that are integral to business success in a new fast-paced economy. Contact us today for more information and to schedule a demo.
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