Looking beyond traditional BI can yield extraordinary results.



Stellar Outlook

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.”

Executive Summary

The challenge: Deluged with data from ever-emerging sources, most organizations are storing data and employing business intelligence (BI) tools for basic reporting. However, many have yet to translate their wealth of information into truly game-changing insight.

The opportunity: A forward-thinking vision that sees beyond traditional methods uncovers actionable insights through advanced analytics. Competitive advantage results when leadership refuses to simply do what everyone else is doing and instead looks to the innovators for inspiration.

The results: Agile enterprises with a fresh perspective on data report impressive return on investment (ROI) when vision and analytics are applied in concert to operations. By changing how business is done, these companies reap exceptional rewards that can be seen on the bottom line.

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.”

Analytics Is on the Horizon

Think you’ve seen it all when it comes to analytics? Think again. A few industries are on the cusp of a new wave of business intelligence (BI) innovation.


Research conducted by Stuart Ravens, principal analyst for energy and utilities technologies at Ovum, suggests that fewer than 50% of utilities in North America and Western Europe are using BI and analytics tools.

That’s about to change. “Utilities companies need to prepare for the coming data explosion,” Ravens says. “It will be a massive explosion of data that must be managed effectively.”

Already, progressive utilities are using analytics tools for billing, customer segmentation, contract management, promotions and procurement applications. What’s more, these organizations are embracing social media, geospatial and text analytics applications to understand their customers’ needs, sentiments and connections.

But the coming information flood will likely stem from new smart grid applications, which use intelligent meters and wireless sensors on the power grid, in homes and in businesses to help utilities manage distributed energy generation and empower customers to reduce their overall energy footprint.

Imagine dozens of sensors in a home, each taking dozens of measurements per day. Now multiply that by the thousands of homes in every suburb. It’s clear that utilities must embrace next-generation BI tools in order to turn that information goldmine into action.


Logistics companies are using predictive analytics to better understand and anticipate the factors that influence pricing. With a clearer idea of fuel prices and traffic on specific freight routes, enterprises can offer incentives to customers for shipping during low-cost periods, increasing sales and profitability.

Analytics can also help logistics providers support sustainability initiatives. In the US, these efforts are largely voluntary and designed to promote a firm’s green credentials. In Europe, sustainability issues are driven by regulations. Whether the goal is a green image or legal compliance, achieving it requires clear insight into everything from vehicle idle times to distribution efficiency.


The pharmaceutical and biotechnology industries are also pioneering innovative BI applications. Some firms are finding that analytics tools can help speed the “bench to bedside” process of developing new drugs and reduce overall development costs.

Other companies are using analytics to support adaptive clinical trials. “Instead of conducting analysis at the end of each phase and then determining if the trial will move to the next phase or if further testing is needed, some firms are performing analysis during the clinical trial. This allows them to then change the protocol and drug regimen, accordingly, rather than starting another study,” explains Ruchi Mallya, analyst for the pharmaceutical industry at Ovum. “This is a very complex process, but the analytic data can provide quicker, better insight. Afaster process can save upwards of $200 million in development costs and get the drug to market first—a critical advantage in this industry.”


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.’ ”

—Madan Sheina,
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.

Shooting Stars

Looking for a little inspiration? Here are several industry leaders who didn’t settle for ordinary when extraordinary was within reach:


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.

Shop Direct: Increased Customer Insight

To create comprehensive, optimized marketing campaigns across multiple channels, including catalog, Web and call centers, UK retailer Littlewoods Shop Direct Home Shopping Ltd. collects and analyzes customer and prospect behavior to build channel-independent, relevant relationships with customers.

Through its data warehouse, Shop Direct measures specific customer actions—abandoned shopping baskets, browsing that does not result in a purchase, switching from Web to phone interactions, etc. Because the information can be queried, the retailer can compare it against offline customer and marketing data on shopping habits. This enables Shop Direct to produce actionable insights that enhance customer relationships and boost corporate profitability.


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.


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.


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."

—Mark Madsen,
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.

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