Role of Analytics in Strategy Formulation
“What is Strategy and how would you explain this to your nine year old child” asked Prof Jessica Spungin in the first lecture on Strategy. While she was highlighting the importance of “Keep It Simple”, I was pondering the possible explanation to Aayu, my daughter who is passionate about sketching and painting.I figured out that I would approach to her with a scenario in which she is participating in a painting competition to win (Goal). In order to achieve this, she may want to pick an appealing theme (Strategic Positioning), select appropriate canvas, brushes, palette, paints etc (Resourcing) and subsequently supplement by effective integration and execution to make a prize winning painting.
Strategy formulation is not so hanky dory in real life. Among various challenges the formulation process encounters, reliability and accuracy of the insight on which a strategy is built lead the list. Typically, these insights are precipitated by performing basic analyses e.g. trend analysis which address only “what happened” part of a business. And quite clearly, strategies which are based on limited scope of insight would be vulnerable. Here, Analytics can positively influence making of corporate, business or functional strategies. Analytics, as it offers wide and deep application on data and information, must be incorporated in analysing a business dynamics comprehensively. The power of Analytics introduces an ability to look at data from “why it happened” and also “what would happen” perspective. An understanding of those drivers which ramify from these formidable insights allow leaders to formulate, refine or adapt strategies effectively. The phenomenal growth of Analytics industry due to its quick wins has convinced corporate leaders to integrate Analytics with strategy building process.
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