Business Analytics for More Profitable Decisions
by Felicity Bamber & Rupert Hodgson, sourcingfocus.com
Business analytics (BA) and business intelligence (BI) is to become an increasing trend throughout 2012. With the current economic climate and the news that the UK is expected to stay in double dip until June at the earliest; the use of BI and BA has become attractive in order to identify cost savings and project progress.
The recent worldwide Gartner CIO survey, compiled from 2,335 CIOs, ranks analytics and business technology as the number one technology for 2012 as CIOs are combining analytics with other technologies to create new capabilities. Savvy CIOs are combining analytics with supply chain for process management and improvement, analytics with memory for field sales and operations, and analytics with social for customer engagement and acquisition.
The NOA Masterclass on Business Analytics for More Profitable Decisions highlighted how organisations are deploying and using analytics and business intelligence to help strengthen the customer experience, streamline processes and ultimately bring in more business.
Toby Crick, partner at Bristows legal firm, detailed why contracts fall through and why business analytics should be employed to inform negotiations. Using research provided by the International Association for Contract and Commercial Management (IACMM), Mr Crick demonstrated that the bottom four areas that were focused on in negotiations included communication and access to information.
The survey also recorded what users wished they had done in hindsight during negotiations, ranking high on the list were drafting the SLAs to better reflect what they actually wanted, and seek to ensure that they avoided an adversarial relationship.
Toby pointed out that the top reasons for disputes and regrets in hindsight over negotiations, could have been resolved by placing more focus on communication and access to information, areas traditionally placed near bottom in negotiations.
Toby also stated that BA needs to be employed in order to effectively drive value and mitigate risks. BA can be further used to facilitate innovation and that even in high pressure deals, it is important that an awareness of the evidence when contracting will provide better results.
Greg Swimer, Vice-President IT for Business Intelligence at Unilever, referred to research from MIT that showed that companies who employed analytical data outperformed those that did not. Mr Swimmer said that Unilever were now employing BA at very high speeds and that analytics data was transmitted at an hourly rate rather than the recent bi-monthly standard.
Unilever shared BA within departments through increased technology, the company also used BA to recognise and categorise the technological infrastructure and landscape of different regions, in order to avoid implementing a strategy across areas e.g. USA and India when the digital technology available in these areas is very different.
One of the main stumbling blocks people experience with business intelligence and analytics is defining precisely what information they want to extract from the data. As Paul Raine, Head of Fault Management at TalkTalk, pointed out, it is all too easy to be data rich and information poor. He advocated a tiered approach to analytics, and stressed the importance of getting the basics right.
Once the core aims have been identified it is crucial that the correct approach to the analytics process is taken. If the metrics that already exist cannot produce a valid analysis that serves the desired purpose, then create them; custom build the intelligence and analytics, ensure that the basics are covered and the results will be invaluable.
The importance of covering the basics was also touched on by Peter Setterfield, Operations & Business Manager of TV Licensing for the BBC. His example of data from their call centres perfectly highlighted the necessity of quality data, not all of the operators were logging the reason behind the call, so it appeared from the data that 20% of people calling had just rung up for a quick chat.
Once that issue had been resolved, the analytics brought another problem to light; after hearing the pre-recorded message for 31 seconds almost all callers hung up. The cause was so obvious (callers were asked for an identification number, and those that didn’t have one, or have it to hand, hung up) but had only been picked up on once the analytics put the data into a graph.
The successful use of analytics led to many tweaks and changes, which in turn led to the lowest number of helpline calls ever. Not only had analytics resolved the issues experienced by customers when calling the helpline, but they had eradicated the original problem. The motivation for using analytics is undeniable: as a result of using business intelligence and analytics the BBC will save £200m (£450m if inflation is taken into account) over the next 8 years.
So what is the future of BI and BA?
Subhash Gaitonde, Programme Director from MindTree’s Data & Analytics Solutions (DAS) practice, believes that “going forward business units will control major portion of the BI+A budgets and hence decision/business value offerings approaches will become necessary and decision making will be more business-centric rather than tool-centric.”