KUALA LUMPUR, 21 OCTOBER 2008 - Analytics technology can help organisations grow, even during an economic downturn, according to business intelligence firm SAS Malaysia.
Tough economic times demand enhanced performance management, said Allan Tham, SAS Malaysia enterprise intelligence practice head. This is necessary to drive competitive advantage by identifying what drives value, improving agility and optimising resource usage.
“By employing analytics, organisations can leverage financial and non-financial indicators, thus moving from gut reaction to fact-based decisions for improved performance,” said Tham.
Short term cost-cutting
Referring to the latest study by author Tom Davenport, The Rise of Analytical Performance Management, Tham said the progression of company activities with regard to analytical performance management ranges from prosaic (inability to file required financial reports) to highly sophisticated (incorporating analytical performance management into decisions and actions).
“Cutting costs for short-term impact without understanding what drives value or profit could threaten long-term competitiveness,” said Tham. “In fact, very few companies employ analytical performance management.”
Professor Davenport’s study cited examples from Hilton Hotels, Harrah's, Best Buy, Victoria’s Secret, Sears and Toronto Dominion. Using analytics, executives at these companies are learning what factors truly drive their financial performance, and maximising those in their businesses.
More than 40 per cent of survey respondents said they are “definitely moving in a more analytical direction” on performance management. Another 28 per cent said they would like to become more analytical, said Tham.
More organisations will use analytics
He said results suggest that, given better tools, more widespread awareness of benefits, and greater understanding of methods and approaches, substantially more organisations will practice analytical performance management in the future.
“Performance challenges are cropping up faster and faster,” said Tham. “Companies have increasing amounts of performance data, but they need to take better advantage of it. Analytics can help decision-makers identify key business drivers so they can leverage opportunities and mitigate threats faster than competitors.”
“Through implementing SAS solutions at more than 150 customer sites in Malaysia and 44,000 sites worldwide, we’ve learnt that a good place to start is using analytic technology to help translate strategy into operational objectives, measures, targets and initiatives,” he said.
