Enhancing Your "Analytics Quotient" with Enterprise BI & Integrated Predictive Analytics Solutions
Rajesh ShewaniTechnical Solutions Leader
Business Analytics
IBM India South Asia
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The more you infuse analytics into your business, the higher your AQ and the better you and your business will perform
= Analytics Quotient
RealizedPotential=
3
High
ALIGNEDCollaboration across business objectives
FOCUSEDClear understanding of
what’s important
PREDICTIVEAble to anticipate, look
forward and set expectations
AWAREAlert, observant,
informed and perceptive
AGILEHighly responsive to changing priorities
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• You rely on spreadsheets with information gaps
• The rear view is your only view
STEP 1: Novice
• You have a view into current results and a little of what’s driving them
• Results are shared with other teams within your department
STEP 2: Builder
STEP 4: Master
• Your VP sets the strategy• Your department’s metrics
map to other departments metrics
• You look forward as much as you review the past
STEP 3: Leader
• Top-down goal setting • Insights flow freely across
divisions and departments. • You allocate resources,
minimize risk and maximize outcomes with equal ease and speed
Manual, slow, error prone, cumbersome, fragmentedData quality concerns
Automated, instant, accurate, seamless, convergedData governance is in place
The AQ Journey
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IBM Business Analytics empowers…
• All People– Empower all people across your
organization and beyond, enabling individual to internet-scale solutions
• All Decisions– Support all decisions – from highly
collaborative to fully automated– with the right analytic capability and insight to drive action from the decision at hand
• Analytic Freedom– Equip everyone with fast, easy business
analytics anytime, anywhere
IBM Business Analytics
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Predict potential threats and opportunities
Spot and analyze trends and anomalies
Assemble and interact with relevant information
Compare “what-if”
scenarios
Understand customer sentiment and behavior
Plan, budget and forecast resources
Assess and manage risk
Measure and monitor behavior
Turn insight into action, optimizing results
Align strategic and operational decisions
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Three Questions for Business Insight
Why?How are we doing?
What should we be doing?
Rear View Forward-Looking View
Examples of Business
Insight
Current View
• Balance sheet, profit and loss, and cash flow statements
• Revenue and cost variance analysis
• Customer, product and market profitability
• Spend optimization• Working capital analysis• Market, customer and
channel pricing• Sales and supply chain
effectiveness
• Cash forecasting• Scenario-based planning
and forecasting• Strategic investment
decision support• Volatility and risk-based
predictive and behavioral modeling
• What happened?
• How many, how often?
• Where exactly is the problem?
• Why is this happening?
• What actions are needed?
• What will happen next?
• What if these trends continue?
• What are the risks or opportunities?
Key Business
Questions
Source: 2010 IBM Global CFO study
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Executive View
Business AreasWhat’s Included?What’s Included?
Over 43,000 Objects including
250+ Dimensions
850+ Metrics
230+ Defined Calculations
Over 43,000 Objects including
250+ Dimensions
850+ Metrics
230+ Defined Calculations
1000+ Report Configurations1000+ Report Configurations
Embedded Data WarehouseEmbedded Data Warehouse Financial AnalyticsFinancial Analytics
Ledger
Payables
Receivables
Cash Management
Customer/Vendor Risk
Workforce AnalyticsWorkforce Analytics
Talent Development
Talent Management
Talent Retention
Workforce Strength
Compensation
Common Decision-Making ModelCommon Decision-Making Model ERP AgnosticERP AgnosticUnified PlatformUnified Platform
Analytics Drill ThroughAnalytics Drill Through Packaged Reporting & AnalysisPackaged Reporting & AnalysisDatabase Agnostic Database Agnostic
Analytics by function
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Adaptive Framework
Unlimited Extensions
Delivered ERP extraction
Unlimited Data Sources
Adaptive Framework
Unlimited Extensions
Delivered ERP extraction
Unlimited Data Sources
Procurement AnalyticsProcurement Analytics
Spend Analysis
Vendor Analysis
Contract Management
Operational Efficiency
Sales AnalyticsSales Analytics
Pipeline Performance
Sales force Performance
Sales Segmentation
Customer Relations
Pricing and Program Analytics
Planning aheadFUNCTIONAL SOLUTIONS
Strategic Financial Planning & Forecasting
Strategic Long Range Planning
Risk Analysis
Sales Planning & Forecasting
Sales Compensation Planning
Workforce Planning
Expense Planning & Control
Allocations
Capital Project Planning
Discretionary Capital Expenditure
Initiative Planning
Pre-configured solutionbuilding blocks that:• Pool collective
best-practice knowledge• Accelerate time-to-value• Increase project success rate
WORKFORCE PLANNING
SALES PLANNING &
FORECASTING
STRATEGIC FINANCIAL
PLANNING & FORECASTING
EXPENSE PLANNING & CONTROL
CAPITAL EXPENDITURE
PLANNING
HUMAN RESOURCES
SALESFINANCEFINANCE
OPERATIONS, MARKETING,
ETC.
DepreciationExpenses
Reports
Income Statements Balance Sheet
Cash flow
Financial Ratios
Cap
Ex
Ope
rati
ng
Expe
nse
s
Headcount & Compensation Expenses
Rev
enu
e P
lan
Mar
ket
Dem
and
Quality and value of decisions
How Decision-Making is Changing
Decisions from “Intuition”• “Instinct”• “Hunches”• Based on experience
Automated Decision-Making• Knowledge, policies and
practices embodied in business rules
• Decisions made efficiently and consistently
• Objective
Predictive Decision-Making• Accurate predictions based on historic
patterns• Leverage all available data• Flexible, evidence-based decisions• Robust in volatile environments –
models re-generated from latest data to reflects changing trends.
“We are in a historic moment of horse-versus-locomotive competition, where intuitive and experiential expertise is losing out time and time again to number crunching.”
Ian Ayres, author of “Super Crunchers”
Imagine If Your Decision Makers Could…
Physician Telco Call Center RepLoan Officer Retail Sales
Associate
…predict and treat infection in premature
newborns 24 hours earlier?
…apply inferred social relationships of
customers to prevent churn?
…adjust credit lines as transactions are
occurring to account for risk fluctuations?
…determine who is most likely to buy if offered discounts at
time of sale?
…optimize every transaction, process and decision at the point of
impact, based on the current situation, without requiring that everyone be an analytical expert
New ways of working to optimize decisions and actions
Lack of Insight
Inability to Predict
Inefficient Access
Variety
Volume
Velocity Sense and respond
Instinct and intuition
Automated
Skilled analytics experts
Back office
Predict and act
Real-time, fact-driven
Optimized
Everyone
Point of impact
New ways of working to optimize decisions and actions
Lack of Insight
Inability to Predict
Inefficient Access
Variety
Volume
Velocity Sense and respond
Instinct and intuition
Automated
Skilled analytics experts
Back office
Predict and act
Real-time, fact-driven
Optimized
Everyone
Point of impact
Predictive Analytics offers Unique Insights to Answer those Tough Business Questions
• Predictive Analytics is a transformational technology that enables more proactive decision making, driving new forms of competitive advantage
• Analyzes patterns found in historical and current transaction data as well as attitudinal survey data to predict potential future outcomes
IBM BI and Performance Management Capabilities Help Decision Makers Find the Answers
Why are we on/off track?
How are we doing?
What should we do next?
SPSS Enables New Solution Value for IBM Cognos
Customers
Why are we on/off track?
How are we doing?
What should we do next?
New customer insight through Data Collection
New customer insight through Data Collection
Time series forecasting
Time series forecasting
Predictive analytics for deeper understanding of the data
Predictive analytics for deeper understanding of the data
Addition of KPPs
(Key Performance Predictors)
Addition of KPPs
(Key Performance Predictors)
Broad distribution of statistical results
Broad distribution of statistical results
Enabling the Predictive Analytics Process
Capture Predict Act
…
…
DataCollection
DeploymentTechnologiesPlatform
Pre-built Content
Statistics
Attract Up-sell Retain
TextMining
DataMining
Data Collection delivers an accurate view of customer
attitudes and opinions
Predictive capabilities bring repeatability to ongoing decision making, and drive
confidence in your results and decisions
Unique deployment technologies and methodologies maximize the
impact of analytics in your operation
Breadth of Applications
• Campaign Response Prediction• Customer Churn Modelling• Profiling and Segmentation• Fraud and Anomaly Detection• Credit Scoring• Demand Prediction/Forecasting• Basket Analysis• Text Analysis• Predictive Maintenance• Warranty Claims forecasting
Applying SPSS to Accelerate Your Success Example: Customer Intimacy
Reduces customer defection, increases uplift from cross-sell/up-sell targeting, and improves acquisition of the “right”
customers, by
enabling decision makers to:• Understand unstructured data that is found in everything from
e-mails, call center notes, blogs, and open ended survey questions• Identify drivers of customer behavior via survey analysis• Identify key performance predictors (KPPs) including customer
defection and outcome of particular customer interactions• Prioritize customer programs as part of real-time decision processes • View customer insights alongside key performance information
through standard IBM reports, analyses and dashboards
Core Areas in a consumer centric business
attract grow retain riskfraud
Predictive Maintenance
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What if you could accurately predict which characteristics tend to lead to a greater amount or frequency of failures?
What if, when an asset is scheduled for maintenance, you could predict what parts are likely to fail in the near future?
What if you could identify the characteristics that tend to increase ownership cost and downtime over the life of a system?
What if you could replace those parts that have not yet failed and avoid further unscheduled downtime?
What if you could quickly mine the thousands of logs that describe the maintenance performed on a system and determine what important observations are being logged by the maintenance team?
Warranty Claims Cost Reduction Benefits
• Motor Cycle Company– Proactively identified warranty issues– Prepared issue resolution for service channel before
customers are faced with problems– Feed back issue findings into product design process for
improvements
• German Car Manufacturer– Reduce warranty cases from 1.1 to 0.85 per vehicle– 5% reduction in warranty cases– Annual savings of €30m
• Consumer Electronics Manufacturer– Deliver insights for action
• Market & Sales positioning• Immediate Product changes
– Future product revisions– Improved customer experience– Improved mind share at key decision points
• Consideration• Acquisition• Acceptance & renewal
• Reduce services costs.
Reduction in operational expenses by handling issues closer to the customer.
Avoid/reduce expensive warranty repairs by addressing expected weak spots earlier.
Better arrangement with any distribution channel.
• Reduce call center expenses (less calls coming in to the call center to report failures).
• Avoid bad press/image.• Increase customer satisfaction,
loyalty and retention with fewer incidents.
• Earliest possible communication about malfunctions.
• Competitive advantage (brand image, offer higher service levels, lower TCO).
• Increase auditability/accountability.
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Summary• Our customer are outperforming and have a high “AQ”
• They are advancing their journey by upping their:
– Decision-making savvy
– Readiness and capacity to leverage analytics across critical roles and processes
– Mastery of information
• We are delivering a comprehensive, unified business analytics system that meets both the growing demands of the business user, while enabling Finance and IT to deliver the appropriate level of enterprise governance and control
• IBM Business Analytics empowers:
All People
…for All Decisions
…with Analytic Freedom
• Only IBM can enable total
solutions…now and in the future IBM Business
Analytics
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CHECK YOUR AQ & GET A PRINT OUT OF RESULTS
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