Analytics vs. Intuition – Stages of Analytical competition

I have read quite a few books and articles on Analytics and I find the subject fascinating, maybe because of my background in physics and Mathematics and my early work in statistical simulation of nuclear reactions. (How did I get in the Field of IT, well that will be the subject of a different Blog….)

For the last couple of years I have been trying to make sense of all the different information silos that exist in any Construction Firm, as you all know the Project Delivery lifecycle consists of the following stages:

• Estimate and Bid
  
• Procurement
  
• Project Execution, including closeout
  
• Back End Business Management
  
  • Cost
    
  • Financials
    
  • HR, etc.
    

All these processes are managed with the help of different technologies and Applications handling their own datasets, and most of the time with little or no integration between them, which means that decision making at any level requires the use of multiple Reporting and manual intervention.

Thomas H. Devenport in 'Competing on Analytics' describes the 5 stages of Analytical competition as follows:

1. Stage No: 1 Analytically impaired
   
2. Stage No: 2 Localized Analytics
   
3. Stage No: 3 Analytical Aspirations
   
4. Stage No: 4 Analytical companies
   
5. Stage No: 5 Analytical competitors
   

In my opinion most of the Construction Companies are in a combination of Stage No: 1 and Stage No: 2

In order to gain competitive advantage Construction companies have to move from Stage No 1 – Analytically impaired- which is the scenario that I described above to stage No 5 – Analytical Competitors.
The path is not an easy one and requires buy-in and support from the senior Management.

Some of the pieces of the puzzle that need to be put in places to accomplish Stage 5 are:

• Software Applications
  
• Data
  
• Technology
  
• Processes
  
• Metrics
  
• Skills
  
• Culture
  
• Sponsorship
  

It is up to Management to decide how to make decisions: Based on facts and Analytics or gut feeling and intuition

I will agree that it is more likely to be correct when making decisions based on strong facts, instead of using intuition.

What do you think?

Stay in tune, I will come back to this topics in future Blogs.