Running head: DECISION MAKING
Bonnie K. Hinsdale
Grand Canyon University
November 24, 2010
The purpose of this paper is to explore how a company can become an analytic competitor. Questions as to what are the sources of Decision Making
to an analytic competitor will also be discussed. A discussion on how influential quantitative modeling is and its utility in business decision making will be summarized. Finally, a Christian view that presents an ethical perspective on quantitative modeling and decision making will be presented. In an ever increasing global environment, maintaining a competitive advantage can ...view middle of the document...
Important and good use of outsourcing is made by many firms, but in the case of quantitative skills and services that require an active relationship with decision-makers, organizations prefer that they were in the same building as it were (Davenport, et al., 2005).
Becoming an analytic competitor means that the company must have access to substantial amount of high quality data that can be used and aligned across different systems, and that a strategy is in place to make pertinent subsets of data available. For example, optimal customer service is a priority for firms. In customer analytics, it is vital ensuring data quality and the interpretations of that data for integrity, credibility, and dependability (Garver & Cook, 2001). Firms like Procter and Gamble and Wachovia Bank are leaders in customer analytics. They create optimal services by understanding customer behavior and producing analytical information to determine what services to offer, what markets to target (Davenport, et al., 2005).
Finally, to sustain analytical competitiveness, companies need to address the needs of the technology environment. The software and hardware need to be capable to perform and process data-intensive statistics with. Firms need to have complex analysis capabilities that involve data warehouse mining, query and reporting, data mining, and other statistical analysis that include real-time analytics. The power needed to perform data-intensive statistics involves more power than a traditional office desk computer, and may involve analysts to rent a supercomputer for some analysis (Davenport, 2005).
Sources of Strength for an Analytics Competitor
Sources of strength for an organization that desires to participate as an analytic competitor is found in its strategic focus, building the right culture, and hiring skilled personal that can make optimal use of quantitative and qualitative analyses. First, there must exist a purpose and focus for analytic data. As an analytic competitor, a firm will use their data to focus on certain segments that will give their company a competitive advantage. Progressive Casualty Insurance Company chose motorcyclists as one of their focuses. Motorcyclists were once lumped together as one and regarded like the Hells Angels “who were about to blow up a building” (Harris, n.d., p.5). Not a very good credit risk.
What Progressive did was to focus on that segment that represented significant percentage of motorcyclists that might include stockbroker, teacher, or a lawyer, in short, ordinary people who might be a next door neighbor and a good credit risk to boot (Harris, n.d.). The result was that Progressive was able to focus on a server these customers before anyone else notice this market. This focus made Progress an analytic competitor with a sustainable differentiated strategy that used the data and integrated it in their decision making.
Second, the right culture is another source of strength...