Guest post from Scott Groenendal, Program Director, IBM Business Analytics
Follow Scott on Twitter @scottgroenendal
The departmental lines of business today are gaining more and more technology buying power. In fact, a recent Gartner report mentioned that the line of business will make more than 40 percent of the technology buying decisions by 2014.
This is a stark change from just a few years ago when IT departments controlled the vast majority of the technology budget. With this shift, comes a chicken and egg dilemma faced by all line of business (LOB) departments: what should I purchase first, a business application (to make me more efficient) or business analytics platform (to make me smarter).
Let’s consider each one. A business application is a program that is used by a business user (purpose built for his or her specific tasks), that aims to increase productivity and perform business functions more quickly, such as a marketing automation platform or a customer relationship management system. A business analytics platform will gain insight by analyzing vast quantities of data (whether generated from the business application or pulled from other internal or external sources) and produce insight and recommended next best actions. An example could be a predictive / data mining workbench or a business intelligence solution.
Now, back to the title… what can the band Pink Floyd and nursery rhyme Jack Sprat teach us about which is more important and should be deployed first?
Let’s start with Pink Floyd. In their popular song, “Another Brick in the Wall (Part 2),” a faint voice is heard at the end of the song muttering, “If you don’t eat yer meat, you can’t have any pudding. How can you have any pudding if you don’t eat yer meat?”
Business analytics serves as the meat, or the main course of our IT software buffet. As a parent, you never let your kids go up to the buffet and hit the ice cream bar first. No, we ensure they eat a balanced meal of meat and vegetables, and only then could they get dessert.
That leaves business applications as the ice cream bar dessert. Choose your favorite three-letter acronym topping (CRM, ERP, BPM, PLM, etc.) to streamline processes and cut costs to the bone. Therein lies the problem. Like any impatient child, we have disobeyed our parents’ orders and filled up on the desert. The trend in the late 1990s and early 2000s saw companies investing heavily in business applications to cut inefficiencies in order to maximize profits on skinny margins.
For example, in a marketing automation system, users can now quickly and easily build and execute campaigns. In a CRM system, users can keep track of all the interactions we have had with a customer. That’s great, but I would argue that the benefits stop there. CRMs have become a records management system, not a relationship management system.
And how about marketing automation? We can continue to automate email blasts that customers will continue to delete because of the lack of relevance to their needs. In my opinion, many of these systems have just enabled us to frustrate our customers more often. This is happening because they contain no intelligence, subscribing only to the philosophy of garbage in / garbage out.
Business analytics can and should serve as the foundational layer to every business application organizations have invested. It will make existing systems smarter while bringing another level of efficiency to these systems. Analytics brings the “relationship” back to CRM systems by uncovering patterns of customer service discord and proactively making suggestions on how to fix service problems. And, analytics can guide marketing automation by determining not only which customers to target for a specific campaign, but prescribing the offer channel and the time that has the highest probability of being accepted. Or, it can help a PLM (Product Lifecycle Management) system determine where, when and why a product is going to break to mitigate warranty issues and increase customer satisfaction.
Since organizations have rebelled against their parents orders to not eat dessert first, my only choice is to quote the nursery rhyme, Jack Sprat. If you don’t remember, it goes like this:
Jack Sprat could eat no fat,
His wife could eat no lean
And so between them both, you see,
They licked the platter clean.
I’ll let you decide which is fat and which is lean. The reality is both business application and business analytics platforms need to coexist in a symbiotic relationship. With business analytics, gaining insight through data discovery, making predictions, and ultimately prescribing the next best action is just an academic exercise if you don’t have a way to set things in motion.
For business applications, either purchased or home grown, now is the perfect time to play Julia Child and inject some flavor and intelligence into your processes.
After all, when customers are hungry for meat or dessert, make sure to serve up exactly what they want and when they want it...and they’ll be sure to lick their plates clean.
For more information:
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