Investing in Analytics

The following is an excerpt from the book Sports Analytics: A Guide for Coaches, Managers, and Other Decision Makers, by Benjamin Alamar, Professor of Sports Management at Menlo College.

Analytics includes advanced statistics, data management, data visualization, and several other fields. Because this list is ever changing, implementing an analytics program to gain a competitive advantage is not a straightforward process. Every sports organization faces its own set of challenges in introducing and developing analytics as part of the decision-making process, but understanding the components of an analytics program will help managers maximize the competitive advantage they can gain from their analytic investment.

The push in sports—as in business—to use analytic tools comes from advances in computing power and the availability of massive amounts of data to both teams and the public, which create an opportunity for competitive advantage. Having access to information that competitors do not has a long history of providing teams and businesses with advantage. Teams such as the Oakland A’s, Tampa Bay Rays, and San Antonio Spurs have embraced the use of analytics, and all three clubs, though they are in small markets and so have limited resources, have seen tremendous success, in part because of the information edge gained by their analytics programs.

Organizations risk realizing no advantage from investment in an analytics program if they do not also invest in understanding and planning how to integrate analytics into the decision-making process. The dangers of not understanding both an analytics program and its integration into an organization were made clear through the results of the recent Sports Analytics Use Survey (SAUS). Twenty-seven individuals representing teams from the National Football League, Major League Baseball, the National Basketball Association, and the English Premier League answered questions on their teams’ use of sports analytics. Two respondents on the same team (one in personnel and the other in information technology) demonstrated two completely different perspectives on the availability and application of analytics within their organization (see table 1.1). This is a team that has made some investment in analytics, and the personnel executive was clearly interested in how sports analytics could help his team gain a competitive advantage. An examination of these different responses demonstrates that even teams that are interested in developing an analytics program face obstacles. These two executives, working for the same, relatively small organization, had radically different views of the state of their team’s analytics program. The responses in table 1.1 show some obvious conflicts. Either the IT executive was wildly optimistic about the state of the team’s use of analytics, or the personnel executive was simply unaware of the capabilities of the team. In either case, though, what is clear is that the team had not leveraged its analytic investment into a competitive advantage or integrated it into decision making. The extreme difference of opinion in their responses to the statement, “Your analytical capabilities are stronger than your competitor’s,” is an obvious sign of missed opportunities to gain a competitive advantage.

Teams and other organizations are beginning to recognize the opportunities for competitive advantage that a strong analytics program can provide, but no two teams will use analytics in exactly the same manner. Different levels of investment, long-term strategies, and appetites for analytics will shape how teams implement and develop their analytics programs. Understanding the possibilities of analytics and how to manage them in conjunction with the strategic plan of the organization, however, will give teams the best opportunity to maximize competitive advantage. Where analytics will have the greatest impact depends on many factors, which will be discussed later in the book. The analytics program, while perhaps initially focused in one area, can eventually provide benefits to every decision maker in the organization. One example of an often overlooked application of analytics is the area of player development.

Decision makers need to identify the areas of a player’s game that the player should focus on in her development, determine routines for the player to improve, and provide targets and goals so the player and decisions makers know whether the player is progressing as planned. Analytics can play a key role in this process by assisting decision makers in identifying goals for the player that will best support the team, as well as tracking, analyzing, and projecting progress so all interested parties know whether a player is developing. Additionally, analytics allows coaches and personnel executives to know what the player is capable of achieving in different areas and how that potential fits into the future of the team. Combining the development information with game video, in-game statistics, and scouting reports will further aid decision makers in making decisions regarding the current and future value of a player.

Sports analytics is a tool very much in its infancy. Only a handful of teams are thinking about analytics in a truly comprehensive manner, and fewer have implemented comprehensive programs. This means that there is still plenty of opportunity to gain a significant competitive advantage. Many teams are using some sort of statistical analysis, typically to support player evaluation, and some are using analysis to support coaching and financial decisions as well. Some teams even have good database systems that allow decision makers easy access, but, for example, only 31 percent of teams answering the SAUS say that different departments within the team have easy access to one another’s data; 44 percent say that access to some data is dependent upon one person; and, finally, 37 percent of teams do not have a database programmer dedicated to sports functions. But increasing the chance for long-term success through analytics is dependent on having a strong analytics personnel and organizational structure. Organizations that are successful in building strong analytics programs, that provide decision makers more time and better information, will gain a competitive advantage that will help sustain long-term success in their league.

Editor’s note: The views expressed in each post are those of the author(s) only and not those of the conference organizing team or blog sponsor.