Analytic Journeys from Predictive Analytics World

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
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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)

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Publishing as a series of white papers

The end game
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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
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The journey
Platform
Delivery

Platform - Integration
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Collect and integrate information about
Customers
Students
Products
Citizens
Have a purpose (Decision)
Decision <> original motivation
Operational benefits

Platform - Understanding
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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
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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
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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
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Looking forward
Forecast
Predict
Calculate propensity
Fraud detection, targeting, retention
Proactive decision-making
Micro-segmentation

Delivery - Optimization
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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
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Critical Success Factors

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Start by focusing on the value
Better decision
Analytic insight
Derived information
Available data

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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
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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
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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
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Blog: www.jtonedm.com

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Analytic Journeys from Predictive Analytics World

by Decision Management Solutions on Feb 19, 2010

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Analytic Journeys from Predictive Analytics World — Presentation Transcript