We encourage our members to submit guest posts for the IIA blog. Today’s is from Don Ryan, Senior Partner, iKnowtion

One could argue that the Age of Analytics dawned in 2004 with the publication of Michael Lewis’ entertaining book on baseball called Moneyball: The Art of Winning an Unfair Game.  Readers of this space are no doubt, very familiar with this book and the raft of subsequent books and magazine articles that have focused on the use of analytics in “evidence-based” decision making.  In this five year span we’ve also seen the emergence of the quantitative analyst, if not to rock star status (let’s not get carried away), then at least to greater prominence and better pay.

But not all companies have advanced to become analytical competitors.  Far from it.  And when the economy takes a dip, or a plunge like in 2008, we still see many companies trimming back their budgets that support market research, quantitative analysis, and other forms of business intelligence and operational analytics.  Why is that?  The argument should be for just the reverse to take place.  In tough times, lean on your analytics even more!

It is also the case from my experience that as you move from large companies to midsized companies you are less likely to see analytics being used to drive business decisions.  That’s probably because these smaller companies think they cannot afford to spend much on analytics.  Of course, there are exceptions, and I consult with one such company that proves that even emerging companies can take an evidence-based approach to decision making.

A good part of the problem is that analytic efforts too often provide information that is “nice to know,” rather than “vital to know.”  We can produce the latter if we concentrate on generating analytics that are actionable and, when implemented, can have a sizable impact on business performance.  In fact, the analytics do not have to be overly sophisticated; they just need to act on key leverage points and be practicable.

One example comes from a recent article in The New York Times Sunday Magazine (November 8, 2009). It showed how Intermountain Healthcare in Utah is improving health care and reducing costs by using, in some cases, fairly rudimentary analytics.  Plucking the low hanging fruit is typically the best way to get further buy-in on analytics.

We may be in the first, uncertain years of the Age of Analytics.  But as long as the business benefits of analytical decision making are proven and more universally accepted, this new age will be more like the Enlightenment (uplifting) and less like the Reformation (contentious).

What do you think?