Predator Or Prey?

How Advanced Analytics Is Powering Disruption for Smart Companies

One of the most disruptive forces in business is rapidly coming into focus — namely, the application of advanced data and analytics embedded into the core of business. Incumbents struggle to compete against it; smart companies take advantage of it.

The signs that an industry is ripe for advanced analytics disruption are becoming clearer. So are the disruptive patterns that commonly follow.

New challengers and a select few incumbents are increasingly adopting advanced analytics to innovate and to disrupt their industries. While analytics is not the only source of advantage, investors have rewarded the disrupters with much higher valuation growth than even the best-performing stock among the large incumbents, according to a recent study by Bain & Company. Still, many companies and executive teams have yet to embrace analytics. Thirty percent of companies surveyed by Bain reported that advanced analytics has not been a priority for investment and progress so far, while only 5 percent suggested that it is a top priority.

THREE PATTERNS OF DISRUPTION POWERED BY ADVANCED ANALYTICS

Sometimes disruption is at your doorstep and obvious — the analytically-enabled new business model threatening your own. More often, however, you have to look for the signposts heralding analytic disruption. While predictions of this sort are never certain, three common patterns of disruption have emerged: radically lower cost; a step-change improvement in customer experience; and new business models combining services, technologies and data in unexpected ways.

Signs of potential disruption involving cost and customer experience often have at their root serious product, service or process deficiencies. Analytic disrupters turn these shortcomings into major opportunities by addressing and solving them with advanced analytics.