22 May 2023, Australia – Companies with low levels of analytics maturity could increase their overall profit by an average of 56 percent if they were to develop their maturity to the level of industry leaders.
In 2022, analytics maturity of participants improved compared to previous years, but new data has revealed that executive sponsorship and skilled talent are key in the long-term pursuit of analytics leadership, and ultimately increased return in profit.
Kearney, a global management consultancy, in partnership with the Centre for Business Analytics at Melbourne Business School have launched the Analytics Impact Index (Aii), a report that provides an objective annual benchmark of return on analytics as a proportion or total profit. It is the fifth consecutive annual report that deep dives into four dimensions of the analytics maturity assessment framework.
The four dimensions of the Maturity Assessment Framework includes strategy and leadership, culture and governance, talent and skills and the data ecosystem. The research surveyed more than 240 companies from more than 40 countries and 35 industries, with a median revenue of AUD $280 million. Of these companies, the report further categorises them into four different stages of analytics maturity – Laggards, Followers, Explorers and Leaders.
Upskilling of the workforce is a strong driver for maturity
Leaders consistently invest more time and resources in analytics training compared to other categories. The majority (80%) of Leaders offer training across the company, compared to just 12% at other organisations – a considerable increase of 22% from 2019. Importantly, this training is offered to people outside the analytics function, making it a significant driver of performance and widening the gap between Leaders and other organisations.
“As we’ve seen since the beginning of the Aii, investing in ongoing talent development and taking a long-term approach significantly increases the value of analytics and strengthens the alignment between analytics culture and strategy,” said Enrico Rizzon, Partner at Kearney and co-author of the Aii.
Achieving the right balance of skills and talents is key to growing and sustaining analytics maturity. The development of skilled in-house capability is supported through the proactive recruitment of qualified analytics talent. 76% of organisations that have matured since 2019 now focus actively on hiring new talent from the market.
“We know that attracting the right talent in an organisation’s analytics function is not only crucial to sustaining maturity, but also supports further aligning the business strategy with the analytics strategy and fostering innovation,” says Professor Ujwal Kayande, co-author of the Aii.
Executive sponsorship
The Aii has consistently shown that having executive sponsors is an essential driver for increasing analytics maturity and returning greater profits to an organisation. This year’s Aii reveals that 88% of Leaders have a C-suite sponsor, compared to 50% of others. In addition, C-suite sponsors were the analytics champions for 87% of the Leaders compared to 30% of other organisations. This underscores the importance of a C-suite executive to not only sponsor analytics, but also to champion its use across the organisation.
“We have also observed through our client work that the pace and reach of analytics within organisation is accelerated when there is executive sponsorship at the top, the sponsorship helps analytics go faster, deeper, and broader within the organisation and a lot of business decisions starts getting powered by data & analytics,” says Mohit Khandelwal, Partner at Kearney and co-author of the Aii.
Moreover, 64% of the organisations that have matured since 2019 also realised a stronger alignment between analytics strategy and business strategy over time.
Other key findings of the study are as follows:
- Leaders stand out in their utilisation of new and advanced analytics techniques, with 77% using and investing in sophisticated tools, programs and platforms compared to only 23% of other organisations.
- In addition, 82% of Leaders have a data infrastructure that sits across the organisation, with well-maintained data warehouses, compared to 28 percent of other organisations.
- Laggards accounted for just 3% of respondents, compared to 34% Followers, 52% Explorers and 11% Leaders, showing a positive shift where more companies are moving into the Explorer category.
- Survey participants have bounced back from COVID-19, as the total proportion of Leaders and Explorers increased compared to 2021.
About Kearney
As a global consulting partnership in more than 40 countries, our people make us who we are. We’re individuals who take as much joy from those we work with as the work itself. Driven to be the difference between a big idea and making it happen, we help our clients break through. To learn more about Kearney, please visit www.kearney.com.
About Melbourne Business School
Melbourne Business School is home to Australia’s best MBA and business analytics degrees, as well as short courses for professionals and custom solutions for organisations. As the University of Melbourne’s graduate school in business and economics, it is jointly owned by the business community and the University.
Melbourne Business School’s Master of Business Analytics is ranked 13th in the world by QS and recognised as the top program in Asia and Oceania. The Centre for Business Analytics was founded in 2014 to address the worldwide demand for analytics research and knowledge. To learn more about the Centre, please visit mbs.edu/cfba.
Media contact:
Sandpiper on behalf of Kearney