Welcome to the Business Insight blog, your all access pass to the very best thought leadership, information and tools for creating smarter business strategies and practices. You'll discover a broad range of resources including real-life case studies, insightful analyses, blogs, articles and ideas from leading experts in diverse industries.
|The IBM Business Insight Channel||IBM for Midsize Businesses|
|Most recent||Most recommendations||Most comments||Most visits|
The Age of Agility: Busines Analytics
James Rowntree 270005MVQQ email@example.com | | Tags:  rowntree ba cognos business_intelligence_ana... analytics data business james ibm
0 Comments | 4,983 Visits
Though there are many avenues through which a business can maintain agility, in a world that is increasingly interconnected, internal
functioning, infrastructure and strategy remain key to survival, regardless of industry or customer base.
Business Analytics (BA) refers to computer-based techniques used in identifying, extracting and analysing business data, such as sales revenue by products and/or departments, or by associated costs and incomes.
Not only does BA afford businesses the internal opportunities to break down the walls (so to speak), but as customers become more discerning, it also allows companies to become increasingly relevant and targeted in their approach.
BA also provides companies with the connectivity to enhance internal functioning and communication through easier data sharing, while streamlining processes and procedures to support business infrastructure. Most importantly, BA can reveal invaluable insights taken from the company’s own history to provide guidance for future planning and strategy development.
A CFO study by IBM in 2010 showed that analytics-driven organisations have 33% more revenue growth, 12 times the earning (before interest, tax, depreciation, authorisation) and 32% more return on capital invested.
BA is characterised by the ability to provide historical, current and predictive views of business operations, with common functions of BA technologies including: reporting, online analytical processing, analytics, data mining, process mining, business performance management, benchmarking, text mining and predictive analytics.
Forrester Research reports that while the overall software market dropped by8% in 2009, the BA software market increased by 15% – indicating the recognition by organisations of the value of these solutions.
Though the demand for BA has traditionally been with ‘back office’ departments, such as finance, HR and operations, Forrester
Research has found that there is an increased demand for this functionality from ‘front office’ departments, such as marketing. With BA solutions evolving into user-friendly platforms, it has become easier for non-IT users to utilise and leverage data from these systems.
My advice is that over time, the tools have sharpened to provide a more accurate, broader view, that doesn’t just look back, but looks forward. We collect more and more data every day, so it is important to find a way of making sense of that data, to exploit it, and to take action that brings you closer to your goals. Business Analytics gives you that.
Although BA has its heritage in the examination of historical/retrospective data, Ben Heinl, Director, Cubewise, highlights the prospective direction that companies can now take by leveraging integrated data sources and the advanced technology of these platforms.
“I think that BA comes to a point now, rather than looking backwards at historical data, a lot of focus is on prospective data. This is really where a lot of the value now lies and where the innovation within the industry is happening.”
Leveraging Business Analytics
A study conducted by the CMO Council in conjunction with Dun & Bradstreet revealed that only 8% of Chief Marketing Officers believed that their companies were doing a good job of making customer information accessible and easy to share.
So rather than flying blind and basing decisions on gut feel, BA enables businesses to make informed choices based on data and information gleaned from their own databases and inventories.
BA helps marketing teams to assess the velocity and efficiency of the sales cycle: understand how well their teams drive deals through the pipeline; which channels are most effective; understand and predict buying patterns; improve forecasting; and keep track of the decision-making process.
“BA allows you to get a much deeper understanding of where you should be focusing your efforts,” says Damian Karmelich, Director Marketing and Corporate Affairs, Dun & Bradstreet.
The human aspect – internal resource considerations
Although BA systems have advanced to the point where they are accessible across an organisation, rather than exclusively to those specialised in IT or statistics, companies still need to be aware of the internal resource requirements for more in-depth analysis
and maintenance of the data.
My recommendation is that BA is just a way of getting the right information to the right people. It can point you in the right direction, but ultimately people need to make the decisions. A good business analyst defines the scope and a good data analyst interprets the data, and BA is a great technology for enabling business change.
Michael Savio, Head of Insights, Datalicious offers, “in addition to having staff with a desire for data and informed decision-making, you also need staff that have the technical skills to use it, analyse it, and develop statistical models. You also need to have people that know how to present data and assemble it in a way to influence business decisions, and know what information is crucial to a business decision and what is irrelevant.”
Exploring current business analytics trendsMobile business analytics
As the world becomes increasingly fluid with the proliferation of mobile technology, there is an expectation that all aspects of life will accompany this trend, BA not excluded.
This presents enormous opportunities for marketers in terms of capturing rich information from customers on the move. However, the expectation is not only with customers, but users of BA systems expect to be able to access information while on the go.
Research organisation Gartner, predicts that the need for more intuitive and interactive tools (mobile -enabled BA software) will grow and has the potential to significantly expand the population of BA users to include a much more mainstream audience.
Mobile BA has been around for years, but it has taken the tablet market – and the iPad in particular – to bring it into the mainstream.
Predictive modelling uses a variety of analytical techniques to make estimates about the future based on current and historical data.
For marketers in particular this can assist with targeted marketing, which involves using consumers’ purchasing history and response rates, along with geographic and other relevant characteristics to estimate the likelihood that customers will respond to particular
“I think predictive modelling is a growth area. However, what really matters is the underlying assumptions you’re making about the marketplace and then having quality data in the first instance to actually drive those models,” advises Karmelich.
“Models will only be as good as the information that is placed into them. With the Global Financial Crisis, some of the world’s best models failed, because the underlying assumptions and a lot of the data going into those models were poor. You need to make some very sound judgements about assumptions,” he warns.
Overlaying lifestyle data
The overlay of lifestyle profiles over the data contained within a BA system can give marketers detailed insights around specific habits and characteristics of their target audiences.
“If you do have a database that has no analytics or segments in place, lifestyle data can be an excellent thing,” says Dicken Doe, Managing Director, Beyond Analysis. “You will be able to understand different behaviours, identify the types of people who are performing those behaviours, while being able to track, measure and observe how these change over time.”
“When you get more advanced in your predictive/propensity modelling, you can use this information as an independent variable in your analysis. For example, if your propensity model isn’t very strong, you might be able to leverage this data to increase its strength,” he advises.
Looking into the crystal ball – the future for BA
According to Gartner: “New iPhonesque, intuitive and fund interaction paradigms that are touch-enabled, feature visual data more heavily and are highly graphical and fast will continue to extend more sophisticated and powerful analysis capabilities to a broader set of users.”
Doe concurs, “we are going to see increasingly simple and straightforward ways of accessing information and tailored front-ends for particular purposes. For example, the CEO is likely to be getting the latest business stats on a weekly basis via iPhone and the marketing and advertising department will be able to measure the effectiveness of their campaigns online in real-time.”
I predict that in the next two years, that geospatial queries will have a significant impact on BA, there are a number of excellent mapping products, and technologies bringing BA and geospatial data together. It’s just a matter of time before these two come together in the one toolset.
IBM is currently working on new technological advances in geotagging and Business Analytics so we can look forward to a more interconnected, instrumented and intelligent business landscape.