How leading organizations use big data and analytics to innovate

Purpose – To understand how the most successful organizations use big data and analytics innovate, researchers studied 341 respondents’ usage of big data and analytics tools for innovation. Design/methodology/approach – Researchers asked about innovation goals, barriers to innovation, metrics used to measure innovation outcomes, treatment and types of innovation projects and the role of big data and analytics in innovation processes. Findings – Three distinct groups emerged: Leaders, Strivers and Strugglers. Leaders are markedly different as a group: they innovate using big data and analytics within a structured approach, and they focus in particular on collaboration. Research limitations/implications – Respondents were from the 2014 IBM Innovation Survey. We conducted cluster analysis with 81 variables. The three cluster solution was determined deploying latent class analysis (LCA), a family of techniques based around clustering and data reduction for segmentation projects. It uses a number of underlying statistical models to capture differences between observed data or stimuli in the form of discrete (unordered) population segments; group segments; ordered factors (segments with an underlying numeric order); continuous factors; or mixtures of the above. Practical implications – Leaders don’t just embrace analytics and actionable insights; they take them to the next level, integrating analytics and insights with innovation. Leaders follow three basic strategies that center on data, skills and tools and culture: promote excellent data quality and accessibility; make analytics and innovation a part of every role; build a quantitative innovation culture. Originality/value – The research found that leaders leverage big data and analytics more effectively over a wider range of organizational processes and functions. They are significantly better at leveraging big data and analytics throughout the innovation process – from conceiving new ideas to creating new business models and developing new products and services.