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    2. thurs 1045 1130 lucker - around the corner 2. thurs 1045 1130 lucker - around the corner Presentation Transcript

    • Deloitte’s Analytics Symposium 2010 Around the corner: The future of advanced analytics John Lucker October 2010
    • Agenda • The future of business analytics • Business analytics as a lasting capability • Business analytics as a fad • How do we prevent business analytics from becoming a fad 1 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • The future of business analytics Passing fad or a lasting capability?
    • Business analytics Business analytics has made a quick ascent to the top of many executives’ must-have lists. And as anyone who has been in business long enough knows, there is ample reason to question whether this is just another passing fad — or a new capability that is going to become essential for any company interested in making smarter decisions. So which is it? Business analytics — a passing fad or a lasting capability? 3 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Business analytics — Semantics or evolution • We are not here to determine if ―Business Analytics‖ (BA) will be the final moniker to describe this area – The business press may move on from BA and look for new hot topics that help sell books and magazines and advertising space • But when all the dust settles, whether BA is a fad or a lasting capability depends on the discipline brought to the domain and the end-to-end capabilities and business value that BA realizes via important business solutions 4 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Business analytics What are some factors that could encourage or thwart the capabilities, not the terminology, of business analytics growth? Factors encouraging a Factors encouraging lasting capability a fad • Fact-based approach to • Organizational inability to business decisions translate analytics into • Declining technological business benefit barriers • Business analytics as a • The ―Age of Empiricism‖ ―Software Story‖ • Imperative for new ways to • Blah blah blah solve business challenges • Paving the cow path 5 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Business analytics as a lasting capability
    • Declining technology barriers • Business analytics is a capability; however, its application can be technology intensive • The declining trend in cost versus performance for information technology infrastructure and increasing availability of analytical tools have decreased the barriers to adoption of business analytics – Processor speed and storage, speed and volume – Analytic software and algorithms – Speed of business solution development Decreasing storage costs and increasing processing power reduce the required return on investment to invest in business analytics 7 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Fact-based approach to business decisions Analytics is an end-to-end approach of asking questions and solving problems through empirical, fact-based methods. This process helps decision makers avoid: Biases • Sunk cost bias — ―We’ve come this far…‖ • Confirmation bias — ―That just proves my point.‖ • Availability bias — ―Watch out for sharks.‖ • Anchoring bias — ―I think it weighs 150 lbs? You?‖ Mistakes • Attribution error — ―Customers like that.‖ • Conformity — ―If everybody else think so…‖ • Overconfidence — ―That’s easy.‖ • Dysfunctional competition — ―I’m #1!‖ Reliance on intuition • Illusion of control — ―Lets go hard 8!‖ • Historical practices — ―History has taught me that.‖ 8 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Entering the ―Age of Empiricism‖ • Over the past decade, business analytics has made inroads into many of the areas that touch an individual’s life and how people see and value the manifestations of analytics – Politics — Real-time reaction to political debates – Media — Top-selling movies and DVDs (a leading online retailer/Netflix) – Weather — Severe weather prediction and daily weather patterns (NOAA) – Traffic — Commute and merchandise movement efficiencies (GPS) – Advertising — Targeted ads based on preferences and history (Internet) – Sports — Statistics to improve outcomes/performance (Moneyball) – Customer service — Customized/heightened performance (Zappos) • As we move from accepting the use of analytics to expecting the use of analytics, we enter the Age of Empiricism 9 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Business analytics as a fad
    • Organizational inability to translate analytics into business benefit Organizations may implement the correct analytics; however, if the organization is not prepared to accept the changes associated with analytics, the implementation will likely fail. • Reasons for analytics resistance – Siloed data and data hygiene • ―My data‖ may be in conflict with shared information • ―I have this 5% of data that just can’t work for this‖ • Greater need for data management, data czar/gurus – People capabilities • Utilizing business analytics demands a set of business skills that may not be readily available in the organization — and resources are scarce – People pattern of behaviors • Organizational inertia, unrealistic expectations, insular, ―hunker down‖ 11 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Business analytics is reduced to a ―software story‖ • Business analytics is not a piece of technology; it is a business capability • In the past, some new business practices have been distilled into a packaged technology – ―If you are encountering this problem, buy this software‖ — Widgetized – One size fits all – Forcing all business and processes into a specific approach • This has happened to previous business initiatives – Customer relationship management software – Customer segmentation – Supply chain – Pricing management (banking, insurance, retail) – Fraud detection (credit cards) 12 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Blah blah blah • As with anything, success breeds imitation. This can lead to: – Overexposure – Poor quality imitators – Oversimplification — So easy anyone can do it – Cheapening of effort and value – Overselling — It slices and dices, benefit is huge! – Paving the Cow Path 13 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • How do we prevent business analytics from becoming a fad?
    • Preventing business analytics from becoming a fad As leaders and innovators in the business analytics domain, we must do all that we can to prevent business analytics from deteriorating into a fad • Deliver innovation with excellence — tie to benefit and value proposition • Push for true creativity and push the envelope — be provocative, R&D • Change people’s minds and business practices — organizational change management, culture, empowerment, fact-based decisioning • Be a relentless missionary — consistent definitions, not a people replacer • Self-police the industry 15 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Summary: Around the corner – The future of advanced analytics • Don’t worry about the moniker • Ensure business analytics delivers sustainable, broad-based business value • Encourage a fact-based, empirical culture • Encourage innovation and creativity, especially beyond traditional reporting 16 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Questions?
    • Contact information John Lucker Principal Deloitte Consulting LLP jlucker@deloitte.com 18 Around the corner ― The future of advanced analytics Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • "This presentation contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this presentation, rendering business, financial, investment, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this presentation. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Copyright © 2010 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited