Executives see Business Intelligence Emerging as Crucial Competitive Advantage

Davenport cited progress at organizations such as Capital One, Harrah’s Entertainment, Dreyfus, Marriott, Procter & Gamble, Verizon and the NFL’s New England Patriots as clear signs of an accelerating trend toward greater reliance on analytic processes and technologies.

“Many companies today use business intelligence for specific applications, but these initiatives are usually too narrow to affect corporate performance,” Davenport said. “The organizations we surveyed, however, are building broad capabilities for enterprise-level business analytics and intelligence. Their capabilities go well beyond data and technology to address the processes, skills and cultures of their organizations. These strategies are driven by CEOs and senior executives who insist on fact-based decisions throughout their businesses.”

The research study, which polled more than 40 C-level executives and directors at 25 globally competitive organizations, was conducted by Davenport’s team over the first quarter of 2005. Each executive was asked 15 to 20 questions during a 45-minute interview.

"We were surprised by the extremely high degree of interest and involvement in this subject area,” Davenport said. “The executives we questioned were clearly interested in identifying the best strategies for organizing analytic operations on an enterprise scale. They’re really taking this seriously.”

Three conclusions emerged from the study data, Davenport said. First, leading organizations are focusing more attention on developing fact-based decision-making processes. Second, initiatives which are tightly focused on achieving key strategic objectives are the most likely to gain traction. Third, the support and involvement of champions at the C-level are absolutely critical to the success of enterprise business intelligence initiatives.

“Professor Davenport’s new research supports our longstanding belief in the strategic value of business intelligence,” said Dr. Jim Goodnight, CEO and co-founder of Cary, N.C.-based SAS, the leader in business analytics software. “As the future unfolds, competitive organizations will depend increasingly on integrated processes for analyzing data from multiple sources. More business decisions will be made on the basis of facts and evidence, and fewer business decisions will be made on the basis of instinct and guesswork. From our perspective, that’s a positive development.”

Davenport said the research study grew from his interest in learning more about how large organizations build analytic capabilities, convert data into knowledge and leverage business intelligence to create value. He said he was gratified by the level of engagement demonstrated by the executives.

“The net takeaway of the study is this: The ability to make business decisions based on tightly focused, fact-based analysis is emerging as a measurable competitive edge in the global economy,” Davenport said. “Organizations that fail to invest in the proper analytic technologies will be unable to compete in a fact-based business environment.”

The research survey was co-sponsored by SAS and Intel. The results of the survey were announced at the 30th annual SAS Users Group International (SUGI) conference. More than 3,000 SAS users from around the world attended this year’s SUGI in Philadelphia.