“Moneyball” and Your Business

MV5BMjAxOTU3Mzc1M15BMl5BanBnXkFtZTcwMzk1ODUzNg@@__V1__SY317_CR0,0,214,317_It’s baseball season again!  A while back, the film “Moneyball” showed us how the Oakland A’s built a super-competitive sports franchise on analytics, essentially “competing on analytics”, within relevant business parameters of a major league baseball franchise.  The “Moneyball” saga and other examples of premier organizations competing on analytics were featured in the January 2006 Harvard Business Review article, “Competing on Analytics” (reprint R0601H) by Thomas Davenport, who also authored the book by the same name.

The noted German doctor, pathologist, biologist, and politician, Rudolph Ludwig Karl Virchow called the task of science “to stake out the limits of the knowable.”  We might paraphrase Rudolph Virchow and say that the task of analytics is to enable you to stake out everything that you can possibly know from your data.

That’s what competing on analytics really means.

In your business, you strive to make the highest quality decisions today about how to run your business tomorrow with the uncertainty that tomorrow brings.  That means you have to know everything you possibly can know today.  In an effort to do this, many companies have invested, or are considering an investment, in supply chain intelligence or analytics software.  Yet, many companies who have made huge investments know only a fraction of what they should know from their ERP and other systems while they are mired in long, costly projects that are rapidly losing momentum and delivering little or no value.

Take operational excellence as an example.

Are you able to see a bottleneck build in your order-to-cash process at exactly the step or steps where it is occurring, immediately comprehending the impact because you are seeing hard data in an intelligent context?

What about visibility of supply chain performance?

Can you see that what proportion of your perfect order performance is being caused by days of supply which has been recently impacted by changes in customer order request dates or forecast error?

If operational excellence or supply chain visibility and performance sit high on your list of priorities, your wish list should include the following:

  • Pre-built connectors to your ERP system from a secure, scalable, speedy cloud platform for immediate plug-in and start-up
  • Fast harmonization across multiple ERP instances or data models
  • Comprehensive, domain-specific (supply chain and maybe industry) interrelated metrics that focus new light on the levers for revenue, margin and working capital
  • Simple, but powerful, self-service configuration beyond out-of-the-box metrics
  • Root cause analysis
  • Role-based views with collaboration
  • (Almost) zero learning curve
  • A continuous stream of new value-added services (e.g. what-if scenario analysis, predictive and prescriptive analytics, etc.) based the fact that your provider is now the secure custodian of your enterprise data

Are you competing on analytics?

Are you making use of all of the data available to support better decisions in less time?

Can you instantly see what’s inhibiting your revenue, margin and working capital goals across the entire business in a context?

Do you leverage analytics in the “cloud”?

As always, thanks for stopping by and having a quick read.  I hope you found this both helpful and thought-provoking.

As we enter this weekend, I leave you with one more thought that relates to “business intelligence” — this time, from Socrates:  “The wisest man is he who knows his own ignorance.

Do you know yours?  Do I know mine?

Have a wonderful weekend!

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About Arnold Mark Wells
Industry, software, and consulting background. I help companies do the things about which I write. If you think it might make sense to explore one of these topics for your organization, I would be delighted to hear from you. I am employed by Opalytics.

2 Responses to “Moneyball” and Your Business

  1. Denise Montrose says:

    This is really great, Mark. I’m going to Tweet it. 🙂

    Make it a great day. Sent from my iPhone

    >

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