Accenture Information Management Services

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Giving business a sporting chance

Point of View

When France lost soccers 2006 World Cup to Italy, many fans blamed French superstar Zidane, red-carded off the pitch for infamously headbutting an Italian player. But far away from the stands, astute observers attributed Italys win to something subtler: the clever analysis of data.

Winning with analytics

Several of the Italian national teams players had been evaluated at Milan Lab, AC Milans biomedical research center for gauging players performance and injury potential. The club considers the lab a crucial advantagea tool for improving returns on the investments it has made in its high-priced twolegged assets. The lab tracks 60,000 data points on a player (200 on one jumping motion alone) and analyzes the statistics to ensure his health and fitness. As a result, AC Milan has built one of Europes top soccer teamsthey are current Champions League winners and boast an impressive seven titles in Europes premier cup competition. The differentiator? An unwavering emphasis on using data to make better decisionsin short, the sports world is tapping into the power of analytics. Business people have long borrowed insights from sports about teamwork and leadership. But data, especially in the form of statistics about players and teams, has traditionally been fodder for sports commentaries or office chat. Only recently has hard data begun

to transform the management of professional sports. In fact, some sports executives now have much to teach businesses about how to profitably capture and analyze data. These professionals have first-hand experience of how the intelligent use of analytics can improve asset acquisition and management, talent management, operational performance, and even customer service. The lessons could not be more timely. The traditional bases of business competition are eroding fast. Innovation in products and services is more challenging by the day. Product life cycles keep shrinking, yet customer expectations go on rising. Organizations have more and more data on hand but they have far less room for errors in execution, so decision making has to be sharper and better-informed. All in all, these factors call for superior analytics and deeper insights into what makes an organization work. For fresh ideas on how to better use analytics to acquire talent, business executives need look no further than the football team, New England Patriots. The Patriots do not use the same

scouting services that other teams employ. They evaluate college players even at the smallest schools and gauge potential draft picks with criteria that other teams dont uselow ego and high intelligence, for example. The team tracks the data points on potential players with a Draft Decision Support System that is updated daily with new reports from scouts. Analytics staff then double-check the scouts rankings by comparing west coast ratings with similar east coast ratings. No detail is overlooked as long as it can provide an edge. How many organizations are willing to employ a radically new approach such as this to discover hidden talent? Operational performance can also be enhanced through analytics, as the Formula One race circuit proves. As F1 drivers jostle to be first past the checkered flag, technicians now scrutinize dense streams of real-time data that pour from more than a hundred sensors on each car. It is commonplace to see trackside engineers collecting gigabytes of data from each race, monitoring everything from engine oil pressure to the stability of their

Ready for Analytics?

Accenture research1 shows how the gap between the analytics exemplars and their peers is widening. Highperformance businessesthose that substantially outperform their competitors over the long term and across economic, industry and leadership cyclesare twice as likely to use analytics strategically compared with the average company, and five times more likely to do so than low performers. The high performers are well aware that technology on its own cannot turn a company into an analytical competitor; as such, they put abundant time and effort into developing robust analytical business processes and capabilities. However, other Accenture research found a significant IT capability gap that company CIOs are racing to address. For example, 21 percent of the CIOs of leading global organizations are aggressively developing enterprise-wide analytical infrastructures today and 76 percent plan to develop enterprise-wide analytics over the next three years.2 However, 78 percent report that they remain hampered by report-driven business intelligence systems that operate in silos and are ill-equipped to provide the sophisticated predictive analytics a company needs to become an analytical competitor. Whether using biometric data to improve customer security at airports or transforming merchandising for major retailers, Accenture is working with organizations today to help them realize that analytics can not only drive greater returns but bring a new perspective to existing brands and channels, offering businesses a sporting chance in the race toward high performance.
Source: Davenport, Thomas H. and Jeanne G. Harris, Competing on Analytics: The New Science of Winning, Harvard Business School Press, Accenture, March 2007. Source: Cultivating high performance through information management, Accenture, 2007.
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cars chassis. Rapid data analysis helps managers decide whether a car can pull into the pits early, whether it can take on less fuel or whether its gearbox is heating upjust a few of the factors where the right data at the right time can help determine whether the car finishes the race and where it is finally placed. Similarly, most business executives could benefit by studying how Bolton Wanderers Football Club in the United Kingdom applies analytics to turn its loyal fans into higher-spending customers. Until fairly recently, almost all of the British teams income came from ticket salesa significant challenge since its fan base was smaller than that of many of the clubs with which it competes. Today, Bolton Wanderers gets a third of its revenues from non-revenue activitythe consequence of capturing a steady flow of data from the smart cards carried by its fans and then analyzing the data using a sophisticated customer relationship management system. These teams and many like them have learned what it takes to get the most out of their analytics approaches.

One key insight: The approach must be applied consistently. The former manager of baseball team, the Boston Red Sox, learned that lesson the hard way. The Sox lost a pivotal game to their archrival after the manager let a star pitcher remain in the game well past the point at which the analytical data had clearly indicated that the pitcher would falter. Consistency isnt the only issue: An analytical approach is only as good as the data being used. Sports teams with strong analytical capabilities are acutely sensitive to the garbage in, garbage out maxim. That explains why several top F1 racing teams use hardware and software solutions that are highly compatible so the data their technicians are monitoring is as accurate, consistent and up-to-the-minute as possible. Another way that sports teams gain advantage is by discovering new metrics such as the popular Roland Rating that has become an accepted means of measuring a basketball players value to the team. Some organizations are not waiting to see what sports teams can teach them. In virtually every industry and geography,

companies such as Google, Tesco, Honda, Capital One and Harrahs Entertainment are already gaining significant competitive advantage by using analytics to out-think and out-execute their competition. For organizations that have not yet started down this road, emulating teams that know a thing or two about successful competition can help jumpstart their efforts.

Data, especially in the form of statistics about players and teams, has traditionally been fodder for sports commentaries or office chat. Only recently has hard data begun to transform the management of professional sports.

About the Author

Jeanne G. Harris is an executive research fellow and director of research at Accentures Institute for High Performance Business, where she leads research in the areas of information, technology, and strategy. She is co-author with Tom Davenport of Competing on Analytics: The New Science of Winning, Harvard Business School Press, 2007.

About Accenture Information Management Services

Accenture Information Management Services is a global cross-industry organization focused on bringing clients solutions to better manage their business, interact with customers and make strategic, financial and operational decisions. Working across Accentures service lines and industry groups, this network of 13,000 professionals* specializes in information management services including business intelligence, portals and content management and data management and architecture. For more information about Accenture Information Management Services, visit www.accenture.com/ informationmanagement.
*as of August 1, 2007.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. With more than 175,000 people in 49 countries, the company generated net revenues of US$19.70 billion for the fiscal year ended Aug. 31, 2007. Its home page is www.accenture.com.

Copyright 2008 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

For more information about competing on analytics contact: Jeanne G. Harris Executive Research Fellow [email protected]