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Analytic Journeys from Predictive Analytics World
 

Analytic Journeys from Predictive Analytics World

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How do companies move from databases and BI to pervasive, predictive, actionable analytics? This presentation summarizes research conducted with IBM.

How do companies move from databases and BI to pervasive, predictive, actionable analytics? This presentation summarizes research conducted with IBM.

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  • Many companies are adopting analytics, with the most sophisticated increasingly pushing predictive analytics to the point of contact, the very tip of their organizations. Based on research conducted with IBM and IBM clients, this presentation will show how companies in a variety of industries have made progress on their analytic journeys. While each industry, each company, is different, this presentation will describe the common steps on the journey to pervasive, actionable, predictive analytics.1. The results of research with IBM clients on how companies adopt analytics in stages2. What the right next step in adopting analytics would be for them3. How analytics can help them transform their business
  • Real-time optimizationContinually optimize in real-time, managing trade-offs and predictionsInstitutional actionCreate an infrastructure that supports differentiated treatment in operationsPredictive actionPredict likely responses to treatment and use this to select and prioritize actionsDifferentiated ActionAnalytically establish what alternative actions can be takenKey targets/segmentsMine data to identify segments or sub-populations and prioritizeData in orderIntegrate, clean and organize data to support decisions

Analytic Journeys from Predictive Analytics World Analytic Journeys from Predictive Analytics World Presentation Transcript

  • Analytic Journeys
    James Taylor,
    CEO
  • About me
    Independent consultant working with clients to help automate and improve decisions
    Researcher and independent analyst in decision management techniques and decisioning technology
    20 years experience in all aspects of software including time in PeopleSoft R&D and at Ernst & Young
    Blogger, speaker, writer
    james@decisionmanagementsolutions.com
  • The research
    The end game
    The journey
    Critical success factors
    Related research
    Next Steps
  • The One Slide You Need
    Pervasive, predictive, actionable analytics are the goal of the journey
    Many companies have BI and predictive analytics on separate tracks
    There are reasonable steps to take from BI to predictive analytics
    Build an information platform first but…
    …keep the decision in mind
    Don’t forget to operationalize, institutionalize
  • The research
    ©2009 Decision Management Solutions
    5
  • ©2009 Decision Management Solutions
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    The Research
    Sponsored by IBM
    Reviewed case studies and interviewed customers
    Various industries:
    Telecommunications (customer retention)
    Retail (consumer marketing)
    Healthcare Providers (patient care)
    K-12 Education (student achievement)
    Government agencies (operations)
    Banking (customer centricity)
  • ©2009 Decision Management Solutions
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    Publishing as a series of white papers
  • The end game
    ©2009 Decision Management Solutions
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  • ©2009 Decision Management Solutions
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    The end game for analytics
    Pervasive
    Used in every transaction
    At the point of contact/delivery
    In operational decision making
    Actionable
    Decisions being made, actions being taken
    Action-support not decision-support
    Predictive
    From reporting to prediction and forecasting
    Predictive analytics and scoring
  • Telecom Provider
    Business challenge:
    100M customers and 3Bn calls / day
    200TB of customer information
    1.3M Retail partners
    Rural and urban consumers, large and small companies
    Solution:
    Integrated data warehouse across all channels, all products
    Real-time analytics for micro-segmentation, offer targeting
    Web, retail, call-center and mobile channels
    Benefits:
    Rapid growth with 2-3M new customers/month
    Growing and accelerating Revenue Market Share
  • The journey
    ©2009 Decision Management Solutions
    11
  • The journey
    Platform
    Delivery
  • Platform - Integration
    ©2009 Decision Management Solutions
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    Collect and integrate information about
    Customers
    Students
    Products
    Citizens
    Have a purpose (Decision)
    Decision <> original motivation
    Operational benefits
  • Platform - Understanding
    ©2009 Decision Management Solutions
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    Analysis and reporting still central
    Analyzing at the group level
    Facility
    School
    Program
    Not management/financial reporting
    New users
  • Platform - Targeting
    ©2009 Decision Management Solutions
    15
    Segmentation
    Group analysis
    Trends and patterns
    Analytically focus resources
    Non-intuitive results
  • K-12 School District
    Business challenge:
    Unable provide effective intervention for at-risk students
    48% drop-out rate
    Attendance, test, student data disconnected and out of date
    Solution:
    Transform compliance, accountability data into a strategic asset
    Analytics to identify at risk students
    Intervene early in time to make a difference
    Benefits:
    Proactive alerts when students cross at-risk thresholds
    Identify which programs are likely to work for each student
    Reduce costs
  • Delivery - Operationalization
    ©2009 Decision Management Solutions
    17
    Integration with operational systems, processes
    Increased granularity of treatment
    Increasingly prescriptive
    Action support not just decision support
    Infrastructure for differentiated treatments
    Business rules management
  • Delivery - Prediction
    ©2009 Decision Management Solutions
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    Looking forward
    Forecast
    Predict
    Calculate propensity
    Fraud detection, targeting, retention
    Proactive decision-making
    Micro-segmentation
  • Delivery - Optimization
    ©2009 Decision Management Solutions
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    Next Best Action
    Formal trade-off analysis
    Personalization, markets of one
    Pervasive
    Predictive
    Actionable
  • Retailer
    Business challenge:
    Grocery chains are battling for market share
    Customer loyalty is essential for growth
    Loyalty to the brand, not a single store format
    Solution:
    Highly tailored promotions integrated with loyalty program
    Integrated system from back office to point of sale
    Consistently compelling offers across channels
    Benefits:
    Increased revenue
    Deep knowledge of customers across formats
    More effective promotional campaigns
  • Critical success factors
    ©2009 Decision Management Solutions
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  • ©2009 Decision Management Solutions
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    Critical Success Factors
  • 23
    Start by focusing on the value
    Better decision
    Analytic insight
    Derived information
    Available data
  • 24
    Start by focusing on the value
    Better decision
    Analytic insight
    Derived information
    Available data
  • State department of taxation
    Business challenge:
    Paper tax returns increased costs and slowed responses
    Siloed information systems
    Manual fraud detection and return review
    Solution:
    Single central taxpayer database
    Sophisticated real-time predictive analytics
    Benefits:
    Recovered millions of dollars from questionable tax returns
    Increased collection of unpaid taxes
    Decreased number of questionable tax returns
    Increased customer satisfaction
  • Related research
    ©2009 Decision Management Solutions
    26
  • Some other recent work on analytics
    Analytics at Work
    Tom Davenport, Jeanne Harris, Robert Morison
    Harvard Business School Press
    More than 100 organizations
    28 companies in sponsored research
    Survey on managing analytical talent
    Breaking away with business analytics and optimization
    IBM Institute for Business Value
    400 respondents, mostly business executives
    Characteristics of high performers
  • Ladder of analytical applications
    Analytics at Work: Smarter Decisions, Better ResultsTom Davenport, Jeanne Harris and Robert Morison
  • Business direction
    Trusted information
    2.4x
    2.5x
    4.4x
    2.4x
    2.0x
    2.7x
    Analytical and predictive tools
    Dashboards and visualization
    Business rules management
    Content management
    Master data management
    Data integration tools
    Key: Top performers (i.e., 1st quintile relative to industry peers)
    Lower performers (i.e., 4th and 5th quintile relative to industry peers)
    Relative difference of top performers to lower performers
    Source: Breaking Away with Business Analytics and Optimization: New intelligence meets enterprise operations at www.ibm.com/gbs/intelligent-enterprise.
    Some differences of high performers
  • Next Steps
    ©2009 Decision Management Solutions
    30
  • Action Plan
  • More information
    White papers
    http://www-01.ibm.com/software/data/new-intelligence/
    Decision Management Solutions
    decisionmanagementsolutions.com/learnmore
    Blog
    http://jtonedm.com
    ©2009 Decision Management Solutions
    32
  • Blog: www.jtonedm.com