Analytics Pays…
These results are closely seen in the latest
IBM – MIT Sloan Management Review
survey
Analytically transformed organizations were three
times more likely than Aspirational ones to indicate
they substantially outperform their industry peers
Top-performing organizations use analytics five times
more than lower performers
From: Davenport and Harris –Figure 3-1
Spearman’s Rho =0.272 (Error: 0.094 for one tailed test)
Highlights from the 2012 IBM Study, Analytics:
Analytics: The New Path To Value – 3000 executives
around the globe – IBM and Sloan Management
Review Survey
Analytics is a strategic source of
competitiveness, because,
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Hard to duplicate (Because the mix of strategic metric, segments, and business assets is
yours) – Capital One – Information strategy where testing and experimentation is very hard to
duplicate, and Barclay’s – share of wallet
It is unique (unique to your products, segments, and assets – Harrah’s loyalty and frequency
strategies)
Adaptable to many situations (Expertise in the processes of ranking, grouping, association,
and likelihood calculations, and defining right measurements are usable across any
organizational process – Sprint applied it to HR having perfected it in marketing)
Be always one step ahead of competition – Because it builds on already existing best
practices – Ex: De-averaging to one’s own strategic metric and will keep the competition away
– Capital One
Renewing with new opportunities– By the time competition saw how Progressive insurance
is using analytics for better segmentation such as older motorcycle drivers and how it
connected to companion products, Progressive moved to exploit other consumer
opportunities
Impact of Analytics – Perceptions of
Executives – Five Stages of Analytical
Maturity – Big Data Use Cases
Sam, Nethra Sambamoorthi
Key Messages In the Trenches – The Messages
from Recent Surveys by Industry Stalwarts
• Prof. Davenport in association with Deloitte released
recently 2013 Analytics Advantage Survey results for which
they conducted a mix of more than 100 online surveys and
“deep dive” interviews with senior executives at 35
companies in North America, the United Kingdom, and Asia
– While organizations realize the importance of analytics,
– Nearly half of them do not see that as a competitive advantage
– Do not support with a strong thought leader and a centralized
platform to serve the departments
– Lack centralized data management in coordination with
analytics requirements
– Lack right tools
2012 IBM Survey of 1,100 Executives From 96 Countries, 26
Industries Around the Work In Association With Said
Business School, Oxford University, specifically talks about
real world uses of big data opportunity
Highlights from the IBM Study, Analytics: The Real World Use of Big Data
The presentation by IBM Executive
http://www.youtube.com/watch?v=jBpP4IKrJFs
As with any author, IBM adds another V; in this case it is Veracity
bringing out the challenges of big data and how privacy is becoming an
important factor.
Digital and smart platforms are critical component of big data in customer engagement
PWC Study on Big Data
Customer engagement: Reaping the rewards of digital
outreach
For a full report of the survey click here
An Example Big data application
viewed from IBM Platform
Perspective using customer service
as the application area
http://www.youtube.com/watch?feature
=player_detailpage&v=H7NLECdBnps
Source: http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-bigdata-at-work.html
Use Cases of Big Data – A Total of 25
Plus Cases
• Talent Analytics
– 160 MM employees can be searched and ranked based on the 160MM resumes or
profiles that are available in LinkedIn. Extensive analysis of their blogs, postings,
resumes is a big data treasure trove. Linkedin makes it easier but only on the basis
of what is posted in the linked in
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How Big Data Keeps Cable TV Watchers Hooked?
How Netflix uses big data?
How Facebook uses big data?
How Google/Yahoo/MSN/AOL use big data?
Where Do BIG data Come In Here? The Beginning of A
Quest...
• 20+ Examples of Big Data Applications
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Use Analytics to Build a Distinctive Capability
– Analytic competitors are in all industries
– Distinctive capability is achieved by managing the strategic metric that is specific by
products/services, segments, budget, and competition.
– Can distinctive capability itself be sharpened with analytics?
•
What Makes an Analytical Competitor? – AKA primary attributes of analytical
competitor
– Four pillars of analytical competition
• Support of a strategic and distinctive capability
• Enterprise level approach to and management of analytics
• Senior management commitment
• Large-scale ambition
• We will further expand these into how different processes are managed
and what attributes are exhibited by analytically competitive companies
over various stages of analytical maturity level
Business Intelligence and Analytics
What is the best that
can happen?
Optimization
What will happen next
Competitive Advantage
Predictive Modeling
What if these trends
continue?
Forecasting/Extrapolation
What is happening? –
Integrated knowledge
What actions are
needed?
What exactly is
the problem?
How many, how
often, where
What happened?
Statistical Analysis
Alerts
Query/drill down
Ad-hoc reports
Standard reports
Degree of Intelligence
Figure 1-2 : Davenport and Harris
Large-scale ambition
Sr. Management
Commitment
Enterprise-wide Analytics
Distinctive Capability
Four Pillars of Analytic Competition
Figure 2-1 : Davenport and Harris
How the Processes Happen? In various maturity
levels
From: Davenport and Harris
Five Stages of Analytical Competition
Stage1
Analytical
Competitors
Stage 2
Analytical
Companies
Stage 3
Analytical Aspirations
Stage 4
Localized Analytics
Stage 5
Analytically Impaired
Figure 2-2 : Davenport and Harris
Elements of BI architecture
Figure 8.1 – Competing on Analytics – The New Science Winning
Five Stages of Analytic Competition
and Six Levers
From: Davenport and Harris
Importance of Distinctive Capability
and Strategic Metric
• A strategic metric captures the essence of the (1)
vision, (2) budget, and (3) distinct products/services (4)
the opportunity segment
– It is impossible for organizations to create products or
services to all the consumers. They have to be selective to
serve sub-populations called value-segment. The metric
that connects the segment and the distinctive products
and services for growth purposes is the strategic metric.
– A smart organization knows how to differentiate itself in
the market place based on distinct products and services
and the segment it wants to serve
Think: Can the strategic metric be refined by analytics?
Long List of KPIs – Where is the Beef?
“Business Analytics for Managers: Taking Business
Intelligence Beyond Reporting”, by Thurland and
Laursen, 2010
Key Performance Indicators(KPI) and
Key Leverage Indicators(KLI)
KPIs are passive, after the fact output measurements and they are dependent on
things to happen. KPIs are lag indicators
KLI is what you need and KLI is directly related to your strategic metric. You can
leverage them to get your strategic metric to raise up or go down. KLI’s lead
indicators
Dashboard Input
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The dashboard is a quick and visual way of capturing and presenting the current status of the operations/sales/production/logistics in an organization.
The dashboards should stimulate discussions, warn if status, trends, and exceptions have potential negative effect on the key stakeholder
measurements. To be effective, dashboards have to satisfy the following best practices.
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There are different layers of dashboards (CEO/board related, Sales/customer engagement, Finance/HR/Production/logistics) and variations of this
depending on the vertical and the company
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Dashboards are not just reports of an analytical work nor a SQL output from IT department; it is a one screen shot capturing trends, exceptions,
warnings and alerts, opportunities, and reasons and insights for divergence from goals metrics, that would communicate critical aspects of a particular
layer in few bullet points on a frequent basis (at least daily).
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Most of the coverage in single screen shot dashboards are visuals of KPIs, Key Performance Indicators
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Well understood KPIs that are critical for the operations are used and full disclosure regarding the data quality, source, and updates.
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There is more value in the time trends of KPIs - use as much as possible
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The current trend is to have Dashboards updated daily if not in real time – now imagine what kind of metrics and how it should not be a long list of
unintuitive series of numbers that will kill interest in the dashboard. Gone are the days of quarterly and monthly updates
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Current trend is, also for Dashboard to have space for real time feeds from twitter/facebook and other relevant social network for customer input and
challenges.
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Dashboards affords drill downs where we can have more detailed metric specific reports
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Every day summary message has be in bullet points for actions and follow-ups, that is consistently evolving smoothed for randomness
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In summary, dashboard goes beyond analytics at the hand of a top notch analyst’s input to the organization connecting the trends, exceptions,
warnings, alerts, opportunities, and distills in few sentences the expected actions and follow-ups for the Sr. Management on a daily basis using KPIs,
with some of the input points coming not only from competitive actions, consumer experience, production, logistics, marketing, finance, HR, and
facility management, but also weather impacts, health trends, national security, and macro economic trends, so that the management is fully aware of
what is going on and how to keep the metrics for the goals under control.
Some reasonable dashboards are
- http://www.enterprise-dashboard.com/tag/insurance-marketing-dashboard/
Widgets International – Production, Sales, Customer Satisfaction, and Profitability
DRAFT
10.2% reduction in production
5.6%
in recommendation
Graphical Objects For Dashboard
Creation
Open the word document
Graphical objects, Their Usability, and How to
Draw or What tool to use