Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Predictive Analytics: Better Commerce Insight | Ariba LIVE Rome


Published on

Predictive analytics is a solution that comprises the collection and analysis of data through quantitative means to draw conclusions and insights, and ultimately predict future events. An increasing number of organizations are turning to predictive analytics to make better decisions and improve performance.

In this session we’ll explore predictive areas such as benchmarking, performance measurement, and commerce insight. We’ll look at practical ways to use these services and solutions to improve sourcing & procurement, sales & marketing, procure-to-pay, and order-to-cash processes.

Come to this session to find out how predictive analytics can be a game-changer and ultimately the best tool in your tool box.

Published in: Business
  • Be the first to comment

Predictive Analytics: Better Commerce Insight | Ariba LIVE Rome

  1. 1. #AribaLIVE © 2014 Ariba, Inc. All rights reserved. Predictive Analytics Is Your Scorecard Smart Enough? James Tucker, Sr. Director, Business Network Strategy | @jbtucker3 David Charpie, Development Executive
  2. 2. Agenda • Use Cases for Predictive Analytics • Challenges with Predictive Analytics • A Predictive Analytics Framework • SAP/Ariba Solution Set • Q&A © 2014 Ariba – an SAP company. All rights reserved.2
  3. 3. The Top 3 Worst Predictions Ever
  4. 4. #3. Worst Prediction Ever… Robert Metcalfe, inventor of Ethernet, in InfoWorld magazine, December 1995.
  5. 5. #2. Worst Prediction Ever… Microsoft CEO Steve Ballmer, 2007.
  6. 6. #1. Worst Prediction Ever… Time magazine, 1968.
  7. 7. “Using stats this way, we’ll find value in players that nobody else can see.” - Moneyball
  8. 8. Is Your Scorecard Smart Enough? Raw Data Cleansed Data Standard Reports Ad Hoc Reports & OLAP Generic Predictive Analytics Predictive Modeling Optimized Actions What happened? Why did it happen? What will happen? What is the best course of action? CompetitiveAdvantage Analytics Maturity Embedded Predictions End Users © 2014 Ariba – an SAP company. All rights reserved.8
  9. 9. “The extent to which common macroeconomic forecasting variables enhance our understanding of time-variation in volatility is rather limited.” Bradley S. Paye Jones Graduate School Rice University In other words – predictive analysis is only as good as the data and the data models you use. ISE Sentiment Index x 100 Long Calls Purchased Long Puts Purchased
  10. 10. Industry Use Cases © 2014 Ariba – an SAP company. All rights reserved.10 Financial Services • Revenues • Interest Rates Utilities • Usage / Outages • Smart Meters • Environmental Forecasts Healthcare & Life Sciences • Patient Outcomes • Market Access • High Risk Patients Public Sector • Tax Revenues • Economic Assumptions Retail and Consumer Products • Shopper preferences • Mobile alerts / Location
  11. 11. Sales/CRM • Revenue Forecast • Customer churn Functional Use Cases © 2014 Ariba – an SAP company. All rights reserved.11 Sourcing / Procurement • Supplier Risk • Price Fluctuations Supply Chain • Supplier Risk • Inventory Finance • Planning/Budgeting/Forecasting • Revenue Opportunities • Profitability / The Street • Working Capital HR • Candidate Acquisition • Human Judgment
  12. 12. The Road to the Predictive Business Where to Begin – Where it Will Take You
  13. 13. SAP PREDICTIVE ANALYTICS Modeling & Forecasting for the Front-Line User © 2014 Ariba – an SAP company. All rights reserved.13
  14. 14. Predictive Analytics Enabling a New User Base • Create complex predictive models and simulations • Validate predictive business requirements • Publish results back to source Data Scientist .001% Representative User Base • Transform and enrich data source(s) • Create simple predictive models and simulations • Visualize results and publish to BI Platform Data Analysts ~3% 97% • Interact with published predictive analysis • Visualize results in context of use case • Collaborate with colleagues toward closure/action Executives/ Business Users © 2014 Ariba – an SAP company. All rights reserved.14
  15. 15. Insight from social graphs built on 400M calls Built 11x more models Campaign response rates up 260% Doubled campaign take-up rate Identify half future churners in a 5% target list Detected half future churners in a 10% target list Decreasing 3% monthly churn rate on postpaid 400% increase in campaign response rates Churn and X-sell management with 700 models Superior churn model built in only 2½ days Improved model accuracy by 50% using SNA Predicative Analytics The Potential Results… © 2014 Ariba – an SAP company. All rights reserved.15
  16. 16. Predictive Analytics Automated Model Creation and Selection Automatically builds a description of your dataset Selects modeling approach to balance data fit and predictive power © 2014 Ariba – an SAP company. All rights reserved.16
  17. 17. Predictive Analytics Self-service Support for Less Experienced End-Users Identifies key contributors to best prediction Drills down to see if a multiclass model is appropriate Pinpoints need for additional models 17
  18. 18. © 2014 Ariba – an SAP company. All rights reserved.18 MACHINE HEALTH CONTROL CENTER Automated Maintenance & Service Predictions
  19. 19. Predictive Maintenance and Service Building the foundation for systematic learning based on purpose driven data collection to improve product design, reliability, service revenue, customer satisfaction and operator experience. Dealer Sales “How can I improve my customers satisfaction and loyalty?” Service Service “How can I provide the best service at the right time and place?” Owner/Operator Assets/ Fleet “How can I reduce service and operational cost?” Operator/ Driver “How can I improve yield, reduce energy consumption and improve safety?” OEM R&D “How can I improve my product’s reliability?” Warranty “Which service level do we need to provide?” Spare Parts “Which spare parts are needed where and when?” Production “How can I minimize problems in production?” © 2014 Ariba – an SAP company. All rights reserved.19
  20. 20. Costs of Ineffective Maintenance Europe 60 Annual maintenance costs Loss due to ineffective maintenance Maintenance Costs 2010 1 in billion EUR Sources: 1 ConMoto, Wertorientierte Instandhaltung (2011); 2 ARC Advisory Group, Predictive Maintenance Survey US Maintenance Costs 2011 2 in billion USD Annual maintenance costs Loss due to ineffective maintenance 70 450 200 20 © 2014 Ariba – an SAP company. All rights reserved.
  21. 21. Example Algorithms to Support Analysis Association Rule Learning • Concept – Selects a group of products and – Specifies the kind of problem for the analysis. • Algorithms… – Identify autonomously relevant rules, i.e. relationships between attributes and problems, – Sort the rules according to their statistical relevance, and – Present the rules in a human-readable way. Algorithm ✓ ✘ ✓ ✘ ✓ ✘ ✓ ✘ ✓ ✓ ✓ ✓ Set of machines or products Rules / Relationships Feature C Country F ✘ ✘ ✓✓ ✘ ✘ ✘ ✓ 21 © 2014 Ariba – an SAP company. All rights reserved.
  22. 22. Application Example Machine Health Control Center 22
  23. 23. SUPPLIER INFONET Supply Chain Disruption & Performance Predictions © 2014 Ariba – an SAP company. All rights reserved.23
  24. 24. Complex Value Chains Create New Risks Dependency on suppliers increases disruption potential • Companies must understand supply network to mitigate impacts of unexpected operational events • New systems needed to reveal relevant events, enabling near real-time responses Revenue loss – Air India claimed revenue loss of around $1.5 billion due to 787 production delays Reduced profits – Toyota’s profit crumbled over 75% after part suppliers shut down Brand damage – Mattel experienced brand damage and costs of $30 million after recall for lead paint. • By enabling software with content, companies combine internal knowledge with external insight – and can act in real time upon unforeseen events 1 Gartner, IDC
  25. 25. To address these critical issues, Ariba is offering a cutting-edge solution that can leverage the intelligence resident in the Ariba Network to provide an early warning system to identify potential disruption in the value chain Properly leveraging this solution will provide important benefits, including: Establishing more trust with your customers by delivering increased transparency throughout your entire supply chain Providing your executive team more peace of mind through early warnings of potential supply chain disruptions Demonstrating organizational commitment to your shareholders by predicting and avoiding the unecessary costs associated with poor supplier performance And because this is a cloud-based solution, it is straightforward and cost-effective to deploy Ariba’s Solution – Supplier InfoNet © 2014 Ariba – an SAP company. All rights reserved.25
  26. 26. Uniquely Informed Decision Making Big Data Analytics, Machine Learning Algorithms, NLP Supplier InfoNet Data Pools Your Business Systems Supplier Network Information 3rd Party Information Predict company performance using KPIs Machine learning algorithms Extract and classify news events Language processing and text analysis Combine structured & unstructured data Network Intelligence 26
  27. 27. Uniquely Informed Decision Making Big Data Analytics, Machine Learning Algorithms, NLP © 2014 Ariba – an SAP company. All rights reserved.27
  28. 28. Uniquely Informed Decision Making Big Data Analytics, Machine Learning Algorithms, NLP © 2014 Ariba – an SAP company. All rights reserved.28
  29. 29. THE BUSINESS NETWORK Big Data © 2014 Ariba – an SAP company. All rights reserved.29
  30. 30. Business Network Ariba Network Imagine the Possibilities “Other” Buyers Suppliers 5.7 million users from 2K+ organizations … … conduct over $650B on the Ariba Business Network … … with over 1.4M+ global suppliers annually Every day these companies transact: • $500 million in commerce • 100K+ purchase orders and invoices • $65M+ savings • 95 countries • 72 currencies© 2014 Ariba – an SAP company. All rights reserved.30
  31. 31. Business Network Is Your Predictive Scorecard Smart Enough? “Other” Buyers Suppliers © 2014 Ariba – an SAP company. All rights reserved.31
  32. 32. Being a Predictive Business is Key to Success in the Networ ked Economy James Tucker Senior Director, Business Network Strategy | +1 650 390 1702 @jbtucker3 David Charpie Development Executive Ariba | +1 781 315 7253
  33. 33. Please Complete Session Survey Locate Session 33 Click Surveys Button Select Breakout Survey Rate Session Thank you for joining us © 2014 Ariba – an SAP company. All rights reserved.