Value in data

[admin]

Predictive analytics as a core component of business intelligence is the key to competing in the shifting market, reports SAS.
MIS Asia, By Divina Paredes
27 Oct 2009

There are two ways to approach the time when the economy turns around from its current slowdown, says Jim Davis, senior vice president and chief marketing officer of SAS.

The first is to wait for the recession to end and then do business as usual. The second is to use this opportunity to retool the organisation and acknowledge the fact that “when we emerge from this current downturn, the world will be different. There is no going back to normal”.

Davis quotes from a recent issue of BusinessWeek that a recession is “the mother of invention”.

“If we take that approach to what is going on, I think we have tremendous opportunities,” says Davis, who spoke recently at the Premier Business Leadership Series in Singapore hosted by SAS, a business intelligence software provider.

Three dimensions

The challenge then for today’s organisations in the current economic situation, is to focus beyond the here and now. Quoting management expert Peter Drucker, Davis says that for executives to be successful today, they must focus on three dimensions: make the present business effective; identify and realise the potential of the business; and restructure the current business into a different business for a different future.

The last, says Davis, is probably the most important in the current market. “Times are changing and I believe this is what executives need to be dealing with on an ongoing basis. This will not go away.”

He says “gut-level decision-making” is not enough. “We have got to rely on data and we have to rely on predictive analytics, so we can maintain a handle on these three dimensions.”

He cites a Gartner report that claims through to 2012, more than a third of the top 5000 global companies will fail to make insightful decisions about significant changes in their business, due to a lack of investment in information infrastructure and business user tools.

Gartner points out the Asia Pacific end-user organisations will not be motivated to invest in IT primarily as a way to support expansion, but to increase competitiveness, reduce cost and enhance efficiency.

“The message there is it is not about technology, it is about solving business problems. There are plenty of interesting and cool technologies out there, but unless you know how to use them in the context of business problems, they are worthless,” says Davis.

Over-used and misunderstood

One of these tools, business intelligence (BI), is an over-used and misunderstood term, he says. While BI has given end-users the autonomy and independence to create their own reports without having to go through IT, it had served its purpose. “I would argue the future is not in BI, it is in business analytics [BA] and that is where you find the differentiator.”

He says it is necessary to tackle the data out to ensure its availability for strategic decision-making in a timely fashion. Analytics, he explains, span a spectrum of capability that he groups into eight levels.

The first four levels are focused on reactive decision- making. These are:

STANDARD REPORTS: What happened, when did it happen? We all have these, says Davis, and some of the questions it answers are what were the sales last month or reports per screen on Web browsers.

AD HOC REPORTS: How many, how often, where?

QUERY DRILLDOWN: Where exactly is the problem, how do I find the answers?

ALERTS: When should I react, what actions are needed now?

Looking beyond

The next four levels, meanwhile, aid in proactive decision-making and allow enterprises to look into the future. These are:

STATISTICAL ANALYSIS: This is where you gain knowledge on what is happening and what opportunities are missing.

FORECASTING: This answers questions such as what if these trends continue, how much is needed and when it will be needed.

PREDICTIVE MODELLING: This answers the question of what will happen next and how it will affect the business. “This is powerful, regardless of industry,” says Davis. “This one helps us understand things like what customers think.” It can, for example, provide data in advance on what customer segment is most likely to leave or respond to a campaign or model.

OPTIMISATION: This answers questions such as: How do we do things better? Or what is the best decision for a complex problem?

Hottest area

The last level is the “hottest area” in BA, says Davis. In retail, for instance, it can answer questions such as what are the appropriate prize points to maximise margin markdowns? Or, what sizes should be ordered for a particular store? “It can make a difference between success and failure,” says Davis. In all these, he says, “there is absolutely no mention of technology. It is all about solving business models and demonstrating quantifiable business benefits,” says Davis.

Divina Paredes attended the Premier Business Leadership Series in Singapore as a guest of SAS.

Smart networking tips

Your network is the amount of people you know. That is your personal brand; grow it regardless of the economic situation, advises former Merrill Lynch stockbroker turned strategic communications consultant Mark Jeffries.

He hosted the recent SAS Premier Business Leadership Series in Singapore, sharing what he calls the “three Rs of networking” – radar, reach and reward.

He then discussed how conference delegates can apply these strategies to networking within the business environment:

RADAR: After meeting someone of interest put yourself on that person’s radar. For instance, reach out to that person within a week of the meeting. An example is sending an e-mail to the person you met at a conference or a work-related situation.

REACH: The next step is to add a personal note in the e-mail, saying where you met and adding some detail of a conversation you had, for instance, on sushi.

REWARD: You “reward” the person by adding a link to a great website on sushi.

At the very least, says Jeffries, you should get a reply and you never know when you will need a new connection.

[admin]

Analytics top priority for ASEAN CIOs: IBM
They play more strategic role: IBM global CIO study

MIS Asia, By AvantiKumar
27 Oct 2009

KUALA LUMPUR, 27 OCTOBER 2009 – The use of analytics to support decision-making is now top priority for CIOs, according to a new global study from technology giant IBM.

Speaking during the ASEAN launch of the study in Kuala Lumpur, IBM ASEAN partner, leader application innovation services, global business services, Scott Hutchinson said the leveraging of analytics to gain competitive advantage was singled out by more than four out of five (83 per cent) survey respondents at a global level, with an even higher (87 per cent) rating at the ASEAN level.

Hutchinson said the Global CIO Study 2009, which is part of the IBM C-Suite study series, included more than 2,500 face-to-face interviews, conducted from January to April 2009. “The study represents different-sized organisations in 78 countries and 19 industries, 86 in ASEAN.”

“CIOs are investing in business analytics capabilities to help them improve decision-making at all levels,” said Pat Toole, CIO of IBM. “In addition, in this challenging economy, CIOs understand that analytics can be key to new growth markets, whether it’s new ways to manage a utility grid or smarter healthcare systems. Managing and leveraging new intelligence through analytics is something that today’s CIO is pursuing to gain competitive advantage in these new markets.”

CIOs playing more strategic role

“The study reinforces the increasingly strategic role that CIOs are playing as visionary leaders and as drivers of innovation and financial growth,” Hutchinson said. “With an increased focus on data analytics, the survey also revealed that data reliability and security have emerged as increasingly urgent concerns, with 71 per cent of global CIOs (ASEAN: 76 per cent) planning to make additional investments in risk management and compliance.”

Hutchinson said that as the role of the CIO itself transforms, so do the types of projects they lead across enterprises, which will allow them to spend less time and resources on running internal infrastructure, and more on transformation to help their companies increase revenue. “CIOs are transforming their infrastructure to focus more on innovation and business value, rather than simply running IT.”

“In the study, CIOs also identified the top visionary projects they are working on now or foresee implementing in the future, ranging from process improvement to taking advantage of technologies that can provide immediate and long-term financial impact, such as: business intelligence and analytics, virtualisation and green IT, service-oriented architectures (SOA), service management, and cloud computing. CIOs are also focusing on mobility solutions and unified communications, collaboration and social networking tools, and Web 2.0 projects, to enable more effective communications for employees, customers, and partners,” he said.

In addition, the study showed that global CIOs are set on the path to lower energy costs, with 76 per cent (ASEAN: 63 per cent) undergoing or planning virtualisation projects. Other findings included:

• Seventy-six per cent of global CIOs (ASEAN: 74 per cent) anticipate building a strongly centralised infrastructure in the next five years. More than half of CIOs are expecting to implement completely standardised, low-cost business processes.

• Even as they build these standardised low-cost infrastructures, global CIOs are able to focus 55 per cent of their time on activities that drive innovation and growth, whereas traditional IT tasks such as infrastructure and operations management now consume only 45 per cent of the global CIOs’ time


ASEAN CIOs better accepted at senior levels

“Clearly the role of the CIO is changing dramatically,” Hutchinson said. “On the one hand, they are trying to standardise routine processes and simplify their existing IT infrastructure to reduce costs, hence their growing interest in technologies such as cloud computing. On the other hand, given the central role that today’s CIO performs in driving new business models, whether it’s a Smart Grid system, an Intelligent Transport system, or a transparent food supply chain, it’s not surprising that the amount of time they are now spending on driving new kinds of growth for their companies is growing considerably.”

He added that ASEAN CIOs are more highly regarded as key members of senior management, defining business strategy. “ASEAN CIOs here closely mirror their global counterparts in terms of specific characteristics. CIOs in both ranked highly in several roles, as a visionary, value creator, business leader, pragmatist, and cost cutter, though ASEAN CIOs are considered less of an IT manager, than that seen at the global level.”

“In ASEAN, CIOs are more often included as and are better accepted as members of the senior management teams as compared to the global CIOs and as a result, are more actively involved in all aspects of setting the business strategy, especially with their fellow leaders, including presenting on or deciding upon the business strategy,” he said.