Looking beyond traditional BI can yield extraordinary results.
Innovative business intelligence (BI) and analytics capabilities are helping enterprises discover new insights that can enhance competitiveness, profitability and customer service. That’s good news, considering that organizations across all industries are being deluged with information from every side.
“New data sources—sensors, location-aware devices and mobile phone applications, for example—are creating a wealth of information that companies can use to their advantage,” says Madan Sheina, principal analyst for Ovum, a business information provider. “This data is making a real difference in how they analyze and optimize their own business processes and their customer base.”
Simply gathering information is a natural byproduct of how companies do business these days. And there is a cost associated with storing it. To get greater value from that information, companies must translate it into forward-looking intelligence—i.e., to anticipate market trends, opportunities and threats, forecast customer behavior and demand, and more. That’s where advanced analytics comes into play. “But implementing these tools is not enough. It’s the process that counts and it’s the ways in which companies use their BI and analytic tools and how they act on the resulting insights which really is their competitive ‘secret sauce,’ ” Sheina notes.
At the Speed of Light
Once employed mainly by data-centric companies in the finance and retail sectors, BI and analytics applications are now used in most industries.
“In fact, just about everyone is moving beyond the basics of simple querying and reporting,” explains Mark Madsen, president of Third Nature Inc., a consultancy specializing in BI and information management. “It’s hit every industry, and as a result, people are finding that the industry-specific best practices that they’ve embraced for so many years—think chain-wide planograms and corporate-mandated product assortments—are no longer valid.”
It’s essential to look beyond traditional data warehousing methods to achieve truly competitive, game-changing insights and results. The most agile companies aren’t afraid to experiment with cross-industry best practices and develop unique strategies for managing and acting on BI. And as BI and analytics continue to evolve—allowing faster, more intuitive processing of ever-more-complex information sets—the innovators will set the bar even higher.
“In the past, BI systems couldn’t process the data quickly enough to be useful,” says Merv Adrian, founder of IT Market Strategy. “Now functions are coming to market that manage large volumes of data in an automated way. In addition, the cost of storage and systems continues to drop, and the widespread availability of different kinds of data is changing the nature of the environment.”
“It’s the process that counts and it’s the ways in which companies use their BI and analytic tools and how they act on the resulting insights which really is their competitive ‘secret sauce.’ ”
principal analyst, Ovum
Think integration vs. isolated implementation, holistic viewpoint vs. report-centric conclusion, forward thinking vs. backward looking. Today’s new tools deliver those capabilities in a way that makes it easier than ever for everyone from the CEO to the customer service representative to better understand the factors that drive results.
Looking for a little inspiration? Here are several industry leaders who didn’t settle for ordinary when extraordinary was within reach:
GREATER REVENUE RECOVERY
Using BI tools and a data warehouse, one US state began an initiative to collect delinquent tax liabilities and identify and collect unreported and unpaid delinquencies. The state tax commission subsequently improved tax compliance and increased state revenues.
The commission not only collected an additional $16 million in taxes in the first 14 months of the project, but it also saw the conversion rate of contacts to payments reach 31%. At the same time, the automated system eliminated many labor-intensive, manual processes and helped enhance customer service by providing commission employees with secure access to a single view of the taxpayer.
IMPROVED CUSTOMER SATISFACTION
To improve customer service and retention, an Asian financial institution implemented an award-winning, event-based customer management system. Relying on a holistic view of each client, the system uses rules and triggers that detect, analyze and interpret customer interactions, which enable the bank to provide timely and personalized attention—through call centers, websites, direct mail or e-mail—to individuals in the process of making a decision regarding a product or service. The alert system has delivered an annualized return on investment (ROI) of 164% since its implementation. It’s also credited with a 141% increase in target customer marketing activities last year. Also, the bank’s customer contact response rate is up 30%, resulting in a significant increase of conversion rates from 3% to as high as 30% from its database marketing campaigns.
ENHANCED SUPPLY CHAIN AND DONOR MANAGEMENT
Using an enterprise data warehouse (EDW) combined with a front-end application, one aid agency tracks where blood supplies go and how efficiently they are used—right down to the individual nurses involved. The agency scorecards this data and reports back to medical facilities, which can then use the information to identify efficiencies and remedy ineffective processes.
The EDW also helps the group track donors, whether they are providing blood, funds or volunteer time, as well as paid intervention resources, such as training personnel, supply chain coordinators and country management hierarchies. The data warehouse is available 24x7 to support local system data in the event of a disaster or relief effort.
BETTER DEMAND FORECASTING
One large US fashion retailer optimized its inventory forecasting and replenishment processes using a demand chain management solution that enables integrated forecasting, time-phased replenishment and allocation data for individual stores. Their innovative “hold and flow” process makes initial allocations, holds back some inventory at its distribution centers, replenishes well-performing stores, and finally allocates the remaining inventory as needed.
"Just about everyone is moving beyond the basics of simple querying and reporting. It’s hit every industry, and as a result, people are finding that the industry-specific best practices that they’ve embraced for so many years ... are no longer valid."
president, Third Nature Inc.
Equipped with this timely information, merchants are able to better manage their inventory, reducing markdowns and improving sell-through. By matching inventory levels with event and customer demand, they can ensure a better selection of key products for customers, improving their satisfaction. With inventory in line with current buying trends throughout the seasonal sales cycle, stores have reduced markdowns for under-producing products and increased sales at full price, all of which improves the company’s bottom line.
See the Possibilities
These are only a few examples of innovative organizations that realize BI is capable of much more than looking to the past and instead leverage data to see into the future. Innovators are experimenting with best practices to adapt them in new ways. Because for those seeking to gain the greatest benefits from analytics, it all starts with the right vision.