Just over 15 years ago, authors of a book entitled, �The Discipline of Market Leaders,� asserted there were three (and only three) ways for a company to lead their market(s).
Their thesis is not complicated: invest in unmatched value (best product, best total solution, or best total cost) in the core marketplace, while meeting minimum standards across other measures of value. Focusing the entire enterprise on improvement in the chosen value to customers will result in growth in shareholder value over time.
We're seeing that increasingly "best total solution" is the value proposition of choice because of global changes over the past 15 years. Competing on "best product" is very difficult today as the horizon on an innovation-led technology advantage is shortening all the time. The market penetration for televisions 60 years ago to reach 50M users took 12 years. The internet took four. Tablet computers took just two years.
Competing on "best total cost" is a global undertaking where massive scale is frequently the core economic requirement. By its very nature, this strategy limits the field of competitors to a select few who drive globally integrated supply chains as a core competency.
So, in today's environment "best total solution" is where so many enterprises are focused.
But, it requires an intimate understanding of the customer, the customer's customer (sometimes) and the context in which they make their purchase decisions.
With the advent of social networks, we can define the "best total solution" by thinking of the social web as a massive focus group. Enterprises who lead in "best total solution" today are Social Businesses who mine insights and analyze them to precisely understand how customers feel.
Today's leading enterprises apply scientific methods to their social business activities � continuously harvesting the data associated with the process of establishing & maintaining relationships across the customer-set.
This data is priceless to compete effectively today because customers are expressing their needs in the context of their ongoing social network activities. All enterprises need to do is listen � scientifically � to separate the proverbial wheat from the chaff and uncover the core insights that lead to happier customers.
IBM has been working on applying scientific analysis to the petabytes of social network data. We are focused on enabling businesses to become more socially skilled as they engage the "massive focus group" that is the social web.
The "data exhaust" from social business engagement is the input to sophisticated Social Analytics which interpret customer sentiment, evolving topics of discussion and unmet needs.
We are working closely to help our customers improve their capabilities in Social Analytics. Many feel less well-prepared for these challenges than they would like.
Consider recent results from the IBM Global Study Chief Marketing Officer study of what CMOs feel unprepared for. Notice that the top four areas involve social analytics because it's about huge data-sets, social web content, new social channel options and a diversity of ages & geographies to consider.
I will be doing a webinar tomorrow, March 22, 2012, entitled, �Social Analytics is Key to being a Social Business,� and will be discussing how enterprises can get started on the topics above and it touches on all four areas of unpreparedness. You can register here.
One theme you'll see me strike is how our clients are focused on adding their social analytics insights to the larger corpus of datasets that they use to run their business today.
Consider this view of the typical "360 Degree Customer View." We have tried-and-true behavioral and descriptive data, and a lot of interaction data. But, the attitudes our customers have are more elusive.
We have to conduct costly, time-consuming surveys to capture their sentiment � the "Why" behind the "How, Who and What."
So, as our clients serve the needs of their clients better, it's largely through the predictive lens which comes from blending two key things:
�Scientific interpretation of social business interactions (The "Why")
�Modeling of traditional datasets, including the attitudinal data from social media and surveys
For more information:
�Listento the webinar I recently did with BrainYard and InformationWeek, "Social Analytics - Putting the Science into Social Business." A replay is available here and the presentation is available on SlideShare here.
�Watchthe video below for a strategic viewpoint from Deepak Advani, vice president of products and solutions at IBM, on social analytics and why it�s so important today
IBM has beenpreachingthat customer intimacy is the new intellectual property. The more insight an organization has on its customers, the better opportunities it will have to sell them more stuff, retain the best ones, mitigate risk or even identify possible cases of fraudulent activity.
Essentially, it�s a better way to create an ongoing and meaningful dialogue with customers. This is especially important as the power has shifted from the organization to the customer.
And, those organizations that are serious about delivering a better overall customer experience should seriously consider hiring someone who speaks the customer�s language, is concerned about their well-being, can drive profitable interactions through all channels, and can accomplish that elusive task of bringing all customer focused functional departments together with a common goal. This new strategic asset is otherwise known as the Chief Customer Officer (CCO).
To help in your quest to deliver a better customer experience, we have created a job description for a CCO to streamline your efforts.
If you see anything that you might change or add to the description, please let us know. We would love your feedback.
The ACME Corporationis seekinga highly experienced customer experience professional to fill a newly created Chief Customer Officer (CCO) position. This executive will provide a comprehensive and authoritative view of the customer and create corporate and customer strategy at the highest levels of the company to maximize customer acquisition, retention, and profitability.
Key responsibilities include, but are not limited to:
� Provide managerial oversight while implementing strategic focus and tactical direction to the sales, marketing, strategic alliances, market development, and customer support business units
� Drive profitable customer behavior through the creation of initiatives such as profitability segmentation, customer retention, loyalty, satisfaction, and improving the overall customer experience
� Design, orchestrate and improve customer experiences by ensuring consistency across all channels of customer interaction
� Identify customer pain points, define and monitor service standards, enable easy customer navigation across the organization and create new ways to enrich the buying experience
� Foster direct and meaningful relationships with customers, acting as a mediator between the customer and the corporation, especially when service shortfalls or special needs have surfaced
� Develop an overarching customer-centric corporate strategy with the ability to iteratively execute on smaller, manageable goals
� Serve as a liaison between the IT organization and the business units to ensure that systems and business processes are aligned on the customer experience
� Institute a formal process for capturing, analyzing and acting on customer feedback, including leveraging social media channels to better respond to customer needs/requests
� Create cross-functional customer service processes, resulting in a seamless hand-off from marketing to sales to service and support
� Educate, instill, and motivate a broader cultural desire across the corporation to focus on the customer, with the objective of consistently improving customer experience metrics
� Balances the C-suite and Board of Directors with their traditional focus on cost cutting and revenue-growth
� Cultivate meaningful mutually beneficial relationships with corporate partners / associations to deliver enhanced benefits to ACME customers, thus extending ACME�s own value proposition
� Ensure the company's PR and marketing message reflects the company's service delivery capabilities
Ideal criteria for selection includes, but is not limited to:
� Possess strong operational, marketing and financial background as well as political savvy to bear on critical customer-related issues
� Prior executive or VP level experience leading highly successful marketing, sales and customer service business units
� Proven ability to break down corporate and departmental barriers in order to pave new paths, which may often be in direct conflict with existing corporate culture
� Previous boardroom / shareholder experience with the ability to demonstrate tangible value to all stakeholders
� Highly skilled in building cohesive cross-functional teams
� Highly skilled in a variety of enterprise software tools including CRM, ERP, and POS systems, as well asBusiness Analyticssoftware (business intelligence and predictive analytics)
Have you ever had that awkward conversation with a significant other where they tell you they just want to be friends?
Sometimes the news is hard to swallow. It forces you to ask yourself, �What could I have done better?�
This same tough conversation needs to happen with certain software applications too. People just stay in relationships with software for too long. That said, it�s time to have the �friend talk� and break up with spreadsheets.
You�ve never really loved them. It�s been a relationship of convenience � they just showed up one day on your laptop and the rest was history. Yes, they�re nice and have a good personality (as much as software can), but it�s time to cut the cord and just be friends.
Disclaimer:I am not attempting to disparage or declare war on spreadsheets. They serve a useful purpose and will always be a staple inside organizations, but they are not the analytic application you want to bring home and introduce to your parents.
Spreadsheets have been widely used for financial and cost accounting, data collection and analysis, and mathematics. But, when they are called upon to perform a task for which they are not designed or beyond the limit of their capabilities, spreadsheets can actually be a fatal attraction.
Mark Smith, CEO and Chief Research Officer at Ventana Research says that spreadsheets �can be one of the most expensive pieces of technology because of the risk and wrong decisions that are made due to their numerous errors.�
In fact, a number of studies have indicated that 90 percent or more of spreadsheets contained errors.
And Bruce McCullough, the software editor for the International Journal of Forecastingwrote that �Professional statisticians continue to write books with titles like �Statistics with Excel,� but they now warn students not to bet their jobs on Excel�s accuracy. They advise students to use a real statistical package when they need to do statistics.�
So, I guess you have to ask yourself, do you want a meaningful relationship with your data, such as being able to perform detailed analysis, find hidden patterns or make reliable forecasts, instead of a dangerous liaison that gives you little in return, besides frustration?
Speaking of meaningful relationships:
�Elie Tahari, a global fashion brand, found that its retail controllers were struggling with monthly budget reports because its 22 locations submitted spreadsheets separately. By turning this task over to a more robust business analytics solution, they were able to create a seamless reporting framework that provides granular, real-time information from the sales floor to its suppliers� inventory and production schedules. They reduced their reporting cycle from as many as two days to a few minutes, and saw a 30 percent reduction in supply chain and logistics costs. (Read the case study.)
�Checkers Drive-In Restaurants Inc., the largest chain of double drive-thru restaurants in the United States, relied on spreadsheets for financial planning processes that were taking up to three months each year. By breaking away from this burden, they are now able to get the same jobs completed in three weeks, do better forecasting and more quickly respond to changing economic conditions. (Read the case study.)
It�s been said that once you break up with someone, remaining friends is almost impossible. Things just get weird.
Not true with spreadsheets. They�ll still be hanging out on the laptop, going to the same meetings and most importantly, will play a prominent role in sharing the results of the analysis across the organization (if you so choose).
But they will be frustrated by their shortcomings and say, �I wish I could�ve done better.�
For more information:
� Registerfor the upcoming webinar: �The Risks of Using Spreadsheets for Statistical Analysis.� (February 15 at 12:00 pm ET)
� Readthe whitepaper: �The Risks of Using Spreadsheets�
� Attendour upcoming IBM Innovations in Business Analytics Virtual Launch (March 7, 2012) to see new solutions that will give you a more personal relationship with your data.
We've all turned into spooked ostriches with our heads stuck in the ground.
As Matthew Broderick eloquently re-stated in a Super Bowl commercial reprising his famous Ferris Bueller role, "Life moves pretty fast. If you don't stop and look around once in awhile you could miss it."
In the world of social media, it seems everyone is buried in their mobile devices these days reporting on the minutiaof their lives. In fact, it was reported that tweeting records were set during Super Bowl XLVI with 13.7 million total tweets sent during the game and 12,233 tweets per second by the end of the game.
I wonder if anyone really watched the game?
Unknowingly, Twitter has turned us into play-by-play announcers, bad stand-up comedians, "Negative Nancy's,� and critics. We share everything. Is it really necessary to tell everyone what you had for breakfast, what you liked most (or for Boston fans, least) about Tom Brady's performance, the coffee shop you just checked into on Foursquare, your opinion of that Matthew Broderick commercial, or what movies and actors you predict will be Academy Award winners?
If Twitter is a never-ending barrage of babble and nonsense, does it really matter?
You�re damn right it does.
Consumers have become a force de nature in the Twitterverse. Their opinions are unfiltered and unadulterated, yet unfortunately, still quite underrated when it comes to using the data to enhance customer experience. As MTV�s �Real World� once promoted, �It�s time to stop being polite, and start getting real.�
Twitter is raw, real and in your face. Businesses have it easy these days. No longer do they have to go through the formal process of focus groups and lengthy analysis. Want to know what someone is thinking, log onto Twitter.
No dodging the mighty consumer these days.They have become increasingly influential, especially as their opinions travel faster and to a wider group of consumers.
Accountability and honesty reign supreme. If consumers don�t like an organization�s strategic business decision (e.g. Susan G. Komen), new product (Netflix/Qwikster), or advertisement (Groupon/Tibet), there�s no dodging the verbal arrows.
The organizations, however, that decide to take action and analyze the millions and millions and millions of data points created in the socialsphere will own the competitive edge and be able to respond that much quicker. It�s just a matter of separating the noise from what really matters, the consumer�s thoughts, opinions, sentiment and behaviors.
Enter social analytics, the latest in noise-cancelling devices that deliver insights into what people are thinking, why they are thinking it, and most importantly, what organizations can do about it. By eliminating the minutia, social analytics helps businesses understand positive and negative sentiment,pinpoint top influencers, measure the volume of commentary and identify the geographic origin of comments across multiple channels.
Getting back to the Super Bowl�think about the value buried inside of those 13 million tweets � for advertisers, for psychologists, for the city of Indianapolis, for the NFL, etc.
And as the Twitter feed flies off the charts with major sporting events, one can only predict the same activity for the upcoming Academy Awards, especially with the commercials, the fashion faux pas, the glitz and glamour, the acceptance speeches and most importantly, the winners and losers.
Speaking of which, IBM, The Los Angeles Times and the University of Southern California Annenberg Innovation Lab have created the Oscars Senti-Meterto establish a model for measuring the volume and tone of worldwide Twitter sentiment to better understand moviegoers' opinions and customer trends.
So yeah, I guess Twitter matters. It might be noisy, but it�s chocked full of yummy goodness.
If businesses don�t check into Twitter and look around once in awhile, there�s a lot they could miss (and a lot of customers they could lose).
IBM recently conducted tests in its labs that revealedIBM Cognos BI v 10.1.1 to be at least on par and better by 14 to 46 percent when compared to Microsoft Windows 2008 Server.
IBM Cognos BI application performance between similarly configured IBM POWER6 and IBM POWER7 systems showed significant performance advantages for IBM POWER7 servers.
IBM conducted a variety of tests to match the different ways of using IBM Cognos Business Intelligence services and system resources. The test systems used similar server configurations and current processor generation. Download the free report here.
Other findings included:
�Performance improvements of as much as 41 percent for workloads such as running HTML and PDF-based reports and portal navigation
�Performance improvements of as much as 26 percent for workloads such as running large and highly formatted PDF reports, locally processed calculations, interactive analysis activities and complex queries mixed with lighter workloads
For example, an IBM customer had developed a Cognos Business Intelligence application to distribute PDF based reports by email; as implemented and before optimization this application was performing at a rate of 11 multi-page reports per minute.
After the customer applied recommended AIX tuning parameters, the application performance improved to 150 multi-page PDF reports per minute.
On average, most applications might see performance improve two or three fold by applying AIX level tuning.
To provide a comprehensive view of the potential performance impact of optimizations made in Cognos Business Intelligence v 10.1.1, IBM used a broad range of tests. See the graphic that lists the performance improvements for the 20 different tests used.
For more information:
�Downloadthe whitepaper, �Best Practices and Advantages of IBM Power Systems for Running IBM Cognos Business Intelligence,� to see the full performance results.
NOTE:Performance is based on measurements and projections using standard IBM benchmarks in a controlled environment. The actual throughput or performance that any user will experience will vary depending upon many factors.
� "My business is changing on a weekly and sometimes daily basis, and in order to stay competitive I need quick access to the data without IT getting in my way."
Are these comments common inside of your organization?
It�s an interesting battle of wits: Business users needing that fast agility to get at information, and IT needing to ensure governance and control.
IT is often painted as the bad guys because they create roadblocks and are unable to deliver what the business wants � quickly and consistently.
Business is viewed like spoiled brats who have no patience or vision and ultimately rebel.
It�s a dysfunctional relationship that thrives only because these �factions� are more similar than they realize. And, they need each other. It should be very symbiotic�if only they realized.
They are both working towards the same goal: driving the business forward.
But, in order to feel like they are accomplishing their goals, they need freedom from each other. Some might say they need an �open relationship.�
IT doesn�t want to be strapped to a barrage of mundane requests. Business doesn�t want to be constrained to the complicated systems and processes IT has set up for them.
Ultimately, business wants to live in a world where they can easily access the information they need (from any source), manipulate the data without having to be a spreadsheet programmer, and share it with others.
IT wants to be able to leverage the analysis the business user has been working on and still maintain the governance and control to ensure consistent information and use of that information across the organization.
Depending on which side of the aisle you sit, there is an answer and an easy way both can be successful. In fact, both sides can have their cake and eat it too.
We invite you to view the first chapter of our Business vs. IT story in the video below.
In the simplest of definitions, analytics is all about maximizing probability.
In other words, how do you use the information around you to gain a better advantage?
For marketers, business analytics has become an easy way to measure and prove success, but also to support the decisions that drive campaigns, help anticipate customer actions and even guide the selection of messaging and content.
Yes, a scientific approach has become an absolute necessity for modern marketing.
Lest not scoff at the idea of cold, clinical data driving marketing decisions. Heck, it�s been proven that spending $1 on business analytics technology will yield almost $11 in return.
Using analytics to drive better customer experience unshackles the organization from ignorance and maximizes the probabilities for increased customer loyalty, better up/cross-sell and sales conversion.
These organizations focus their analytics capability to gain insight on cost reduction and not at consumer personalization.
Most marketing efforts focus on segmentation efficiency, such as increasing the conversion of a selected group of customers by reduction and removal of messages (for instance, avoiding delivery of identical catalogs to multiple household members), thus lowering the cost of communication.
These firms can increase customer retention by up to 9 percent, capture 2 percent more wallet share and convert an extra 3 percent of inbound contacts into a cross-sell event.
Stage Two � Sharing the Goods
To keep pace with the mobile generation, organizations within this second stage must have a clear customer analytics strategy that enables information sharing across any digital device and channel.
In fact, research shows that tri-channel buyers spent an average of two and a half times more than single-channel buyers.
The most sophisticated marketing organizations in this stage apply analytics for marketing event optimization, an approach that leverages analytics as a �horizontal control tower� to optimize the organization�s various direct marketing events over a given time period over multiple channels.
This better aligns marketing with customers� needs � and varying personas � related to those devices/channels.
Stage Three � From Reaction to Action
This stage focused on information responsiveness.
These organizations are leveraging �raw� data as it streams customers� social commentary and changing moods.
To avoid a veritable data deluge, these organizations focus on identifying the questions that � if answered � will impact their business the most.
This acts as a filter on data collection and helps an organization avoid the task of collecting all available information and then deciding what to do with it after the interminable wait to standardize and analyze it.
Companies able to perform real-time external data analysis combined with rules-based actions have experienced average conversion rates of 16.9 to 38.2 percent.
Stage Four � Next Best Action
This stage focuses on executing a strategy that enables information on demand.
This approach combines all the skills developed in earlier stages with in-depth segmentation approaches and leading-edge work in multichannel customer monitoring and real-time action recommendation (read: Decision Management).
Using predictive analytics (combined with business rules), organizations are able to engage with the customer throughout the buying cycle � from the point of needs identification through the exploration and discovery phase to the purchasing cycle.
Those companies able to apply real-time predictive analytics while executing a multichannel next-best action strategy had an average converted response rate of 24.1 to 64.3 percent.
� Understand the different stages and get a better handle of your organization�s analytics maturity by downloading the full "Customer Analytics Pays Off" white paper.
� Also, read the "Five Steps to Improving Business Performance through Customer Intimacy� white paper.
�Registerfor the �Customer Analytics Pays Off� webcast (Feb. 15 at 1:00 pm ET).
Some people might argue, but former rapper and musician Vanilla Ice was a visionary.
Truth be told, he probably wasn�t talking about business analytics when he eloquently penned those famous lyrics in �Ice, Ice Baby.� But, he could have been.
We live in a collaborative world today�whether we like it or not. The realm of �social� is slowly morphing personal and professional, ultimately making life more efficient and transparent.
And some people and organizations are still rejecting this notion altogether.
Which is why at a company of approximately 400,000, with team members spread across the world, collaboration is a way of life, and a necessity in the IBM survival kit.
It bridges the gap of the world of social with the world of business. It allows us to now connect people and insights to gain alignment inside of the organization, as well as hold people accountable.
Decision making is no longer a game of telephone where important elements of that decision are lossed as it is passed on�one person at a time. When the decision is finally executed, does anyone even know if it was right, if the right people were involved, who made the decision, or why?
That�s where the power of business analytics and collaboration come together.
Organizations can lose tremendous productivity as they search for invaluable information hidden in various meeting notes, manual processes, emails and people�s notebooks.
Collaborative business intelligence(BI) streamlines and improves decision-making by providing capabilities for forming communities, capturing annotations and opinions, and sharing insights with others around the information itself.
It also allows organizations to communicate and coordinate tasks to engage the right people at the right time.
In fact, industry analyst Dave Menninger from Ventana Research commented that �innovative organizations recognize the processes involved in BI are as important as the technology and take steps to provide collaborative support to their BI activities.�
With built-in collaboration and social networking, collaborative BI harnesses the collective intelligence of the organization to connect people and insights and gain alignment.
What was once a dysfunctional buffet style decision making process is now a formal dining experience, with collaborative BI as the lazy susan passing reports and dashboards around the table for feedback and discussion.
Everyone now has input into the process, can easily connect with and understand context with others who are relevant to the decisions being made,and can now learn from history with a centralized corporate memory.
But realistically, before we can all sit down and enjoy this collaborative feast, it must be an accepted practice in the organization.
Culture is at the heart of this. It has to want to happen. Collaboration cannot be forced.
And, once you have embraced it�well, there�s no turning back.
Before too long, you have access to the people and expertise you need to discuss and refine ideas, data and information for the best results.
Had Vanilla Ice lived in today�s world of social networks and business analytics, he might have been able to lengthen his career, better market himself, sell more records, write better songs, connect with fans and shave less eyebrows.
Ok, maybe not.
But, he would have lived true to his mantra of collaborating with his producers and writers and listening to the general collective before making any decisions.
(I apologize if you now have Vanilla Ice stuck in your head for the rest of the day, but at least you�ll be thinking about how you can establish collaborative BI processes across the organization.)
Learn more about IBM Cognos Collaboration by:
� Registering for the January 17 IBM TechTalk: �Enabling Better Decision Making Through Highly Collaborative BI� (Begins at 12:00 pm ET)
� Watching the demo to see how to use built-in collaboration and social networking tools to connect people and insights
Twas the night ofbusiness analytics, when all through the org
No one in IT was stirring, the business felt like a morgue. Cognos Mobiledashboards were delivered to the iPad with care,
In hopes that the CEO would soon review them there.
The business line managers were nestled all snug in their beds,
While visions ofDecision Managementdanced in their heads.
With business rules and predictive models working in sync,
Automated, optimized decisions happen in a blink.
While over in finance there wasn�t any stress,
WithFinancial Performance Managementit�s no longer a guess.
Away to the budgets everyone flies like a flash,
To create flexible, rolling forecasts to always know how much cash.
And as the year ends, it�s time to look back
To close, consolidate and report to keep everyone on track.
When, what to the CFO�s wondering eyes should appear,
But an easy way to complete thelast mile of regulatory reportingto stay in the clear.
To anticipate customer behaviors, it�s hotter than a flame,
The industry is shouting, and calling for business analytics by name!
"NowCognos! Now,SPSS! Now,AlgorithmicsandOpenPages! IBM is taking business analytics out of the Dark Ages!
Lose the excel spreadsheets and head to the top of the charts
Measure yourAQ, that�s where the journey starts!"
With all these pieces any organization should be so proud,
Confronting the obstacle of big data? Let�s take it to the cloud.
And to not forget about all the social media noise
Taking things a step further, and to make all business users merry
2012 is when analytics gets personal, like a sundae topped with a cherry.
Interact and explore, build models and share insight
All without the help of IT, oh yeah, that�s right!
So spring to the laptop or any mobile device,
Away the business will fly, decisions no longer made by a throw of the dice.
And hear all employees exclaim, analyzing with all their might,
"Business Analyticsto all, and to all a good-night!"
There's a series of AT&Ttelevision commercialsrunning in the U.S. that portray how quickly things move in today's digital age.
Twitter, Facebook and YouTube (among others) make it easy � and difficult � to keep up with the latest news, trends and funny baby or animal videos.
By the time you see these items on your desktop or mobile device you quickly realize you are behind the times. That was so :27 seconds ago. Or worse.
In the world of analytics this has never been more true.
27 seconds (or less) is all a retailer, telecommunications provider or insurance company has today to effectively interact with a customer and take the appropriate action � making an offer, fixing a problem, or identifying possible fraudulent activity.
Time is the essence�especially in the world of social media.
Reigning in social media chatter has become a necessity. It�s not just listening to what people are saying, but understanding what they are doing, what they�re thinking and how to better engage with them.
Henkel, a leading producer of laundry and home care, cosmetics and toiletries and adhesive technologies based in Germany, recently deployedIBM social analyticsto better understand what its customers were saying about its brands in the social sphere, and more importantly where, so it could refine its message and take better action.
One of the interesting discoveries for its cosmetics business was that customers that were talking about hair were doing it on a cooking social network. They figured that once at a site, people were likely to remain on that site and continue talking about various topics. Knowing this, Henkel was able to better optimize keywords and better market appropriately on this same site.
While Henkel is finding success, many organizations are still unable to tap this precious resource due to lack of understanding of analytics or lack of in-house analytics skills.
This is why more and more universities are creating programs specifically focused on analytics, includingNorthwestern University, who recently announced two new programs, a full-time Masters of Science in Analytics in the McCormick School of Engineering and Applied Science and a part-time Masters of Science in Predictive Analytics program in the School of Continuing Studies.
Students coming out of college today are byproducts of the digital age and intuitively understand social platforms. They are not only the largest consumers of digital information, but also the purveyors of the content, and are the ones that will parlay their social media prowess into a lucrative career that will turn this social data into business value.
Scott Kellert, a student at the McCormick School of Engineering at Northwestern, commented that organizations will soon realize they need his skills to turn vast quantities of data, especially social media data, into something meaningful that can be quickly applied to improve the business.
�What I love is that analytics can be applied to everything � from insurance fraud to marketing to student retention,� said Kellert. �The new program at Northwestern will take my skills to the next level. Future employers will have confidence that I will know exactly what to do when I encounter large data sets and how to get value from them.�
Value is the operative word�and quickly.
If 27 seconds is all organizations have, they better be precise � and be adaptive to data that changes every minute to catch trends as they are happening, such as in the entertainment (X Factor) or fashion (high-heeled shoes) industries.
Think about if organizations are actually still using a spreadsheet to analyze their data, let alone social media data.
You know that feeling you get when you surprisingly find money in a pocket of your clothes?
There�s nothing better. It's free money.
And according to Nucleus Research, a provider of investigative IT research and advisory services, that's exactly what business analytics is for organizations.
In a new report from Nucleus, they found that "Analytics pays back $10.66 for every dollar spent."
Let's put that another way. Let's say you spent $1,000; the return is $10,000. Spending $10,000? That's $100,000 in extra revenue. And so on... (I rounded down for easier math.)
This number was calculated from reviewing all of the Nucleus Research case studies that have been produced and examining the implementations of analytics applications, such as business intelligence (BI), performance management, and predictive analytics.
In fact, the report states that "with such high returns to be earned on the deployment of analytics, management teams should consider these technologies to be one of the most attractive investment opportunities available to the CFO."
In fact, it would bring a smile to any C-suite executive.
In speaking to David O�Connell, the author of the report, he says that it's a matter of black and white when it comes to those who have incorporated analytics into their business.
"We have found that if we lined up 3-4 firms in the same industry and vertical side by side, those using analytics to guide their decisions would win. Analytics provides such a competitive edge and improvement to the bottom line that we could almost start handing out pink slips to those firms not adopting."
The Cincinnati Zoo, an IBM business analytics customer that participated in a ROI case study (download here), was facing tough operating factors with admissions and donations going down.
"They needed to find ways in which they could change their business model that could make them more efficient and profitable," said O'Connell.
For example, the zoo used analytics to learn moreabout when visitors were most likely to buy ice cream and made smallchanges to the operating hours of the ice cream kiosks, leading to anincrease in food revenues by 20 percent.
For organizations in any industry, O'Connell believes that it only takes a few insights into data with lots of leverage that turns into serious ROI.
That's the power analytics bring to organizations � whether it's better understanding the cost for a customer segment, realizing if a product has high or low margin or determining thatphases of the moon were a big indicator when crime would occur.
It's very much like the butterfly effect where small, unrelated happenings can have major effects on results in another area.
As Nucleus proves, deploying analytics creates those few shifts that produce revenues or lower costs.
So why aren't more organizations taking advantage of this technology?
The report talks about skepticism to technologies like analytics, but O'Connell takes it further.
"There is a complete lack of understanding about how much can be learned from analytics,� said O�Connell. �Senior managers � the CXOs � don't realize how blind their decision makers are flying right now. Organizations are relying on faulty reporting, organizational folklore and gut feel."
To be successful, organizations need to communicate and understand where visibility pain points exist.
O�Connell believes that building a business case on cost reductions and revenue increases is the way to go.
�When you use analytics, you become aware of so much granular information. Organizations suddenly realize how much they didn�t know.�
Just like that $10.66 hidden inside your jeans pocket.
For more information:
� Watcha video of Cincinnati Zoo discussing how it increased revenues by half a million dollars in less than one year.
Guest post from Anuj Marfatia, Senior Market Manager, IBM Predictive Analytics Solutions
Not to frighten anyone, but there are only five weeks before the holidays. The pressure is on.
In the U.S., the holiday shopping chaos, advertisements, music and decorations now begins on Nov. 1, right after Halloween. I actually feel bad for Thanksgiving. Somehow the poor bird has lost its mojo, though I don�t have time to think about it.
With the holiday season in full swing and Black Friday looming, I�m already worried about missing out on this year�s most popular toys for my family.
Like everyone, I promise myself that I will shop earlier, but in the end, I am usually sifting through the shelves of Toys R Us or Target on Christmas Eve that are stocked with items that no one wants or are insanely overpriced.
So, I end up scrounging the floors, hoping that someone else had mistakenly dropped a toy that I could use. (How does it go? Someone�s garbage is another�s treasure?)
I have always been late to the popular Christmas toy party. Even as a child, I remember getting the Rubik�s cube not in the early 1980s when it was hot, but a mere 15 years later. I was determined not to be last when it made its comeback.
What always surprises me is that the popular items are usually talked about and expected to be popular a month or two before the holiday shopping season begins (I could bet today that the XBOX Kinect and My Pillow pets are going to be hot this year), and yet there is never any in stock � either on the shelf or online?
So what gives?
Aligning Marketing, Inventory and the Supply Chain
Assuming that the corporate strategy was not to provide fewer products, it has become apparent that organizations have a difficult time aligning inventory with demand � and the holiday season always puts a strain on operational processes.
Granted, it�s not an easy task for retailers to determine which product and how many of them need to be on which shelf of which retail location and then streamline the manufacturing and distribution processes to meet demand for that specific product.
Or is it?
Organizations traditionally have used the approach of viewing sales from previous months or years and extrapolating how many will be sold in the coming year. Then, manufacturing follows that schedule. At times, this process is more art than science.
And, these organizations aren�t receiving ample feedback from customers, nor are they listening to what their customers are discussing in the socialsphere. In addition, they don�t take into consideration:
� The complaints that recently came up on Facebook regarding a competitive product or an earlier version of its own product
� What to do if 10% of the warehouse team just quit?
� The operational processes affected knowing that raw material prices have increased by over 30% in just a few days
� How to account for decreased consumer income due to the economy?
The Gift that Keeps on Giving
Now, more than ever before, technology exists to analyze all the consumer and organizational data so decisions can be made in real-time to account for macro or micro changes.
Wouldn�t it be great to be able to predict price elasticity, how many products are needed to meet demand, where on the shelf it should go to maximize sales, and how much product can be manufactured with the raw materials and resources that are at hand?
Take, for example, a US-based consumer electronics retailer. The past few holiday seasons, some specific tablets were purchased almost immediately when placed on the shelf.
There was a lot of lag in the supply chain process and by the time additional products arrived to the store, the season was over, so they were leaving much money on the table and were overstocked during the New Year. In order to eliminate their excess stock, they were forced to provide additional discounts to try to open shelf space.
Last year, by deploying predictive analytics software they were able to better predict customer purchasing behavior and demand, and better anticipate failures in the manufacturing and supply chain processes to ensure that they had enough inventory during the holiday season.
Predictive analytics leverages all the consumer, distribution, inventory, and manufacturing data inside the organization, as well as all the social media conversations happening outside. It then runs that data through predictive models, so organizations have a probability or likelihood of what products need to be on the shelves (and always on the shelves) for the holiday shopping spree.
I�m not just being selfish when I say this, but, I know I can speak for many that if more organizations utilized predictive analytics to align supply and demand during the holiday season, there might actually be an XBOX Kinect under the tree this year.
Otherwise, it may be another year of extra Halloween candy stuffed in stockings. Sorry family!
For more information:
� Watch the Predictive Operational Analytics video
� Read the whitepaper on Predictive Operational Analytics
� Get insight into how an auto parts retailer used predictive analytics to align inventory and customer demand
In this edition of �Ask the Industry Analyst,� we sit down with Howard Dresner, Chief Research Officer of Dresner Advisory Services, and a well-known authority and author in the areas of Business Intelligence (BI) and Performance Management (PM).
Howard also recently was a guest on our monthly webcast, IBM Tech Talk, discussing best practices and trends in Mobile BI. The webcast is available on-demand here.
As we�ve seen, organizations today are looking for new user experiences that expand traditional BI solutions with planning, scenario modeling, real-time monitoring and predictive analytics. Using a limitless BI workspace supporting how people think and work � in the office, on the go and even offline � decision makers want to quickly search and assemble all perspectives of the business.
Below we chat with Howard about upcoming trends in BI and PM, the �operationalizing� of analytics, results from his 3rd Mobile BI Market study and what to expect in 2012, including cloud, collaboration and mobile.
You've been around the BI and PM industry for many years, what changes have been the most significant for customers?
At a macro level, BI has become very mainstream and the adoption of BI across large enterprises and SMBs is substantial. It has always been a high priority for users and management alike, however, now the technology is approachable for more average types of users. Vendors are now designing their products for end users in mind and not IT. This is especially true in the mobile world.
We are also starting to see customers using BI as part of their business applications (e.g. ERP or CRM) from the beginning. Customers are thinking of BI and analytics at the outset and the value this analysis provides, rather than processing the data and then waiting for someone to come up with an idea of how to analyze it.
Can you talk more about the mainstreaming of analytics?
Moving forward there are several things that are really important to customers. Topping the list is pushing BI and analytics further down into the operations of organizations to professional line management roles.
Traditionally BI has been a really valuable barometer providing a strategic perspective on the historical performance to date. As organizations continue to amass varying data sources � and more of it � they have to have an easy way to push this intelligence to tactical areas of the organization so quick decisions can be made as opportunities present themselves.
For example, it�s becoming increasingly important for retailers to correct something minor at a store level before it becomes a significant issue. I talked to one retailer who was alerted because a popular SKU was not selling well on a particular day as opposed to other days and compared with other stores. This information was passed to the store manager in real-time, and they learned that there was something physically in front of the display preventing customers to see the product.
Bottom-line: A minor course correction multiplied by thousands of stores can be extremely significant.
This is very similar to what we found in ourWisdom of Crowdsstudy in May 2011 along with advanced analytics (data mining), in-memory analytics, collaborative decision-making and mobile.
The world is changing, so fasten your seatbelt. Mobile (e.g. tablets) continues to have a huge impact on business and the way decisions are being made. For a number of individuals going forward this will be their primary device, especially younger employees who have never actually used a computer.
In a number of customer or patient-facing industries, mobile is just far more efficient and ideal. It also has a psychological aspect that makes the device far more approachable and creates a better conversation versus someone talking over a computer.
Tablets also holdcach�and a cool factor. And, executives are the number one consumers because of that factor, as well as the fact they provide tremendous value. Once the executives adopt them, then you will see a huge proliferation in the devices. This is very different from what we saw last year.
What were the major changes in the results of this survey over the last one you did?
From 2010 to 2011, executives jumped 12 percent as the primary targets, followed by middle management, who were the biggest jump for the primary focus of Mobile BI. It�s interesting to see executives get excited about Mobile BI as most of them own a tablet.
There was also a big increase in penetration and deployment plans. Globally last year, 73 percent said deployment would be under 10 percent, but now it�s 58 percent. Looking out even further, there are very ambitious and aggressive plans to deliver Mobile BI more broadly.
North America and smaller organizations appear to be leading the charge towards Mobile BI. North America because they tend to be early adopters and smaller organizations because they can most readily integrate and benefit from new technologies.
Finally, 65 percent said exclusive Mobile BI use wouldn�t be less than 10 percent over the course of the next two years. That sounds like a paradigm shift. It�s changing the way we work.
What is some advice that you can give to customers who currently have a Mobile BI solution or are thinking about deploying one?
If you are not doing mobile now, begin a proof of concept as soon as possible. This technology is not standing still. If you wait, you'll never do anything. There are huge direct benefits to the organization, which at the minimum are efficiency and effectiveness, especially for those in operational roles. Dragging your feet is not an option.
Secondly, you need to ask yourself, �What do I want to automate?� Anyone who is moving from their desk to somewhere � across campus, to a manufacturing shop floor, or the traditional road warrior � is mobile. So pick your targets. In fact, those people might already be out there and using their devices for business. Go find them and automate those people and their processes.
What are some of the key BI trends moving forward that will create opportunity for customers?
There are three key foundations of BI moving forward: Cloud, Collaboration and Mobile.
�Cloud� Today, smaller organizations seem to think that BI wasn�t made for them. That is untrue. They won�t have the technological staff or resources, but they will have an internet connection. BI can, and will, happen in the cloud for those who want ready-access to applications and data. And, more vendors continue to invest to make this technology a success.
�Collaboration� We have fewer expert resources and truth be told, email doesn�t really help us as much as we need it to. So, if I have a collaborative engine that is supporting my functional area, I can focus all the interactions in one place increasing the ability for structured and workflow collaboration. But, this will only be successful if the organization supports a collaborative culture.
�Mobile� Contrary to what IT and finance might want to believe, Mobile BI is going to shift the industry. The insights now follow you around and with more eyes on the data, organizations can better align their employees with the overall mission and increase the confidence in the decisions. It also creates a better culture of accountability and transparency. Eventually an organization will turn on its afterburners when the culture aligns with BI.
For more information:
�Listento the recent IBM Tech Talk with Howard Dresner
More than 4,000 IT professionals from 93 countries and 25 industries shared their opinions andprovided their views on future IT trends, including how they plan to use Business Analytics (see graphic on right).
The report provides IT and business professionals a roadmap of the four critical and interconnected technologies and skills that will be in greatest demand in the coming years: business analytics, mobile, cloud and social business.
The U.S. Bureau of Labor Statistics predicts that there will be a 24 percent increase in demand for professionals with management analysis skills over the next 8 years. Helping to fuel this increase is the rising use of business analytics by companies in their efforts to learn more about their customers, including buying habits and preferences, as well as protect against fraud and mitigate risk.
Analytics skills are no longer just a requirement for the IT professional; they�ve become a necessity for organizations to remain competitive.
In a recent blog post, IBM�s Erick Brethenoux discusses how this analytics skills gap is getting proven by the significant widening of the overall performance between those that have analytics skills and those that don�t. Watch a video of Erick discussing this �epidemic.�
These IT professionals who gain the necessary analytics skills can also be change agents inside of the organization.
To make sure that organizations have the necessary talent, universities such as DePaul, Yale and Northwestern are also developing programs to prepare business and IT professionals with the analytics skills to bridge this gap, including the sophisticated analytics inside of IBM Watson to help understand the meaning and context of human language.
Other key findings in the Tech Trends report include:
� 42% of respondents named Business Analytics as an �in demand� area for software development
� Analytics has the highest adoption tendency (90%) when compared with other technology areas
� Half of those who are not currently using analytics plan to do so within the next 24 months, to increase automation, streamline processes and do more with less in faster time
� Survey respondents selected education and healthcare as the areas that could benefit the most, with financial services, life sciences and government also ranking near the top
� There is a growing importance of open source platforms such as Apache Hadoop and Linux for Business Analytics software developers