Q&A: How Analytics Can Help Your Company (and the Red Sox) Win Big

How analytics can help your company (and the Red Sox) win big.

Its no secret that companies such as Capital One Financial Corp. and Harrahs Entertainment Inc. have for years successfully analyzed data about their customers to gain an edge over rivals. Now that competitive analytics and business intelligence techniques are more mainstream, corporations are jockeying for specialists who have solid analytical skills, says Thomas H. Davenport. He and Jeanne G. Harris teamed up to co-author Competing on Analytics: The New Science of Winning (Harvard Business School Press, 2007). The two authors spoke with Computerworlds Thomas Hoffman earlier this year.

You mention the Boston Red Sox in the book. How are they using analytics to try to gain an edge over the Yankees?

Davenport: In professional sports in general, the key analytical capability is figuring out which players to acquire in the first place. The Red Sox arent quite as rich as the Yankees, but they are richer than the Oakland As, who have to be really good at evaluating undervalued players. The Red Sox have figured out [that] the Oakland As can do the initial work and then [the Sox can] hire the players if the As cant pay them enough.

The Red Sox also apply analytics to decide what to do on the field. In 2003, the Red Sox hired this guy Bill James, who is the god of baseball statisticians. The new owners were more analytically focused than previous ownership. James developed this idea of on-base percentage and slugging percentage as a method of success instead of batting average and the Red Sox have applied this aggressively. The As were the pioneers.

Not all [baseball] teams are that analytical. The [Chicago] White Sox arent that analytical. The [St. Louis] Cardinals are somewhere in the middle. The [Atlanta] Braves are historically quite intuitive.

Harris: Were seeing this across professional sports. AC Milan [a professional soccer team] has a little bit different focus, getting players who are not injury-prone. There are 200 data points they look at. Theres been a transformation occurring throughout professional sports. The New England Patriots have also applied analytics successfully.

Thomas H. Davenport

Thomas H. Davenport So, are the Yankees using analytics?

Davenport: Theres not much evidence that they have. They havent hired any big statisticians. The players that they have do have good numbers in the traditional sense. A guy like [Alex Rodriguez] does, but that hasnt helped his team produce. They would be incredibly powerful if they had that, too.

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