See the possibilities
Emerging analytical capabilities are revolutionizing how and what businesses analyze.
The economic slowdown has driven a clear need among business managers to improve analytical capabilities. The application of analytics is no longer a niche activity for statisticians but instead is viewed by managers as a powerful means to drive business performance. Companies that analyze readily available information in new ways are realizing significant benefits and a competitive advantage.
According to "Competing Through Business Analytics to Achieve High Performance US Survey Results, December 2008," a survey conducted by Accenture Information Management Services, 70% of business managers are working to improve analytical capabilities. Analytics can provide organizations with the answers to "Why is this happening?" and "What will happen next?"
The popularity of dashboards and scorecards illustrates the need to quickly assimilate information and the urgency to act.
Analytics in action
An analytical competitor can ultimately increase its advantage by using data to take charge of the marketplace. Many organizations have improved revenue and operations by leveraging analytics in support of functional areas like supply chain, financial reporting, and sales and marketing processes. For example, the personalization of data is being used to expand targeted marketing campaigns, which reap rewards for many companies. Additionally, supermarkets are tracking consumer habits on a weekly, biweekly or monthly basis to determine buying trends. They are then mailing coupons and advertising specifically for an individual's product preferences.
Customer relationship management is just one aspect. Data is opening up worlds of innovation. A vineyard in Sonoma Valley, Calif., uses remote sensors to gather data about humidity, wind, water, soil and air temperature in near real time, allowing it to make calculated decisions on the spot and avoid potentially devastating events. The oil and gas industry is pushing for better analytics to leverage data on wells. An upstream energy company cannot see, feel or manage oil in the ground. However, by analyzing geospatial data as far back as 100 years, it can employ analytics to help locate and manage oil reserves, understand the management of that repository and its associated assets over the years, and determine the best way to exploit it for even more gains.
Technologies to express such data are continuing to improve as well. In most cases, individuals comprehend and translate data either visually or statistically. If a picture is worth a thousand words, then data visualization offers a unique and powerful way to display data in meaningful terms.
The popularity of dashboards and scorecards illustrates the need to quickly assimilate information, and the urgency to act on it. In recent years, reporting vendors have improved their analysis tools to adapt to this trend. Software now allows users to create comprehensive dashboards for visualizing real-time data in support of decision making as well as creating interactive presentations from applications, such as data captured within spreadsheet software.
6 key capabilities
With the growth in unstructured content and structured data, organizations have an enormous opportunity to gain greater insight from that information. Accenture has defined six key analytical capabilities that can be applied across a number of subject areas and key business processes:
1. Real-time decision making. Instant feedback resulting in real-time analysis allows businesses to capitalize on opportunities earlier. For information to be delivered at the right time, however, organizations must determine at what point it is needed and build technologies to move the information at the appropriate speed.
2. Predictive modeling. By combining structured and unstructured data, one can better understand customer preferences, make assumptions about future buying patterns, plan maintenance of corporate assets and predict conditions, problems, etc., before they happen. For example, public transit agencies are deploying diagnostic sensors for bus engines to reduce breakdowns and repair costs.
3. Text mining. Organizations use text mining to view e-mail as a source of evidence of fraud. Also, analysis of such free-form text is being used to better understand feedback about companies' products and services.
4. Sentiment monitoring. Companies can track fluctuations in brand image and gauge customer opinions by mining relevant opinions about themselves and their products on the Internet. Language-analyzing applications can distinguish the opinions as positive, negative or neutral.
5. Voice mining. Calls can be monitored to help manage the customer experience more efficiently. Voice detection can identify heightened stress levels, periods of silence, interruptions, talk-over, etc., which can help resolve issues such as poor service, product deficiencies or inadequate training of call center personnel.
6. Video analysis. With about 25 million surveillance cameras worldwide, businesses are mining video for applications such as product placement and promotion. Live video streams can be monitored throughout a store using object recognition techniques. By identifying products on the shelf, businesses can restock quickly, gain insight into product life cycles and ensure in-store promotions are implemented.
Whether seeking to generate new revenue, cut costs or manage risk, businesses plan to expand their use of analytics to improve performance. Two-thirds of executives surveyed by Accenture say their company must improve its analytical capabilities to remain competitive. To meet the growing demand, technology and capabilities will continue to evolve.
Organizations should look to expand their basic operational reporting capabilities—commonly referred to as business intelligence (BI)—and increase their use of analytics. Analytics can help identify opportunities for creating new business models, improving customer retention, understanding marketing effectiveness, confirming competitive threats and improving internal operational efficiencies.