From insight to action - data analysis that makes a difference! - Heena Jethwa


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Presentation from an IBM Business Analytics seminar, held the 22th of november 2012 at IBM Client Center Nordic.

Global competition has increased, and the need to meet customer demands has never been more important. It is essential that all parts of the company work efficiently to achieve success. IBM SPSS Predictive Analytics can help you increase efficiency and reduce costs at every stage of your operational processes. Predictive Analytics helps your organization to capture structured and textual data, so you can better manage its assets, maintain the infrastructure and capital equipment, as well as maximize the performance of your people, processes and assets.

Heena Jethwa, Program Director - Predictive Analytics Market Strategy, IBM

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From insight to action - data analysis that makes a difference! - Heena Jethwa

  1. 1. From insight to action - data analysis that makes a difference!Heena JethwaProgram DirectorPredictive Analytics Product and Solutions Marketing © 2012 IBM Corporation
  2. 2. Agenda Operational Trends Operational Challenges Customer Examples Operational Analytics: Insight to Action Summary
  3. 3. CEO Study: Capitalizing on Complexity 3
  4. 4. Today’s organizations are facing many DISRUPTIVE FORCESfueling the need for analytics The The shift of Accelerating 1 emergence of big data 2 power to the consumer 3 pressure to do more with less Creating new Creating the need for Creating the need for all opportunities to capture organizations to parts of the organization meaningful information understand and anticipate to optimize all of their from new varieties of customer behavior and processes to create new data and content coming needs based on customer opportunities, to mitigate at organizations in huge insights across all risk, and to increase volumes and at channels efficiency accelerated velocity
  5. 5. The pressures on organizations are at a point where analytics hasevolved from a business initiatives to a BUSINESS IMPERATIVEMore organization are using And leaders are analytics to create a outperforming their competitive advantage competitors Respondents who believe analytics creates a competitive advantage 1.6x Revenue Growth 57% 2010 37% increase 2.0x EBITDA Growth 2011 58% 2.5x Stock Price Appreciation Source: The New Intelligent Enterprise, a joint MIT Sloan Management Source: Outperforming in a data-rich, hyper-connected world, IBM Center Review and IBM Institute of Business Value analytics research partnership. for Applied Insights study conducted in cooperation with the Economist Copyright © Massachusetts Institute of Technology 2011 Intelligence Unit and the IBM Institute of Business Value. 2012
  6. 6. OPERATIONAL ISSUES & CHALLENGES Demand Shaping Fraud Assets Processing Waste Inventory Real-time Improvement Price Volatility Sustainability Supply Abuse OptimizationEfficiency Costing Variability Compliance6
  7. 7. Market Trends for Operations Professionals Customer Increasing customer need for product immediacy and uniqueness demands Complex Increasing complexity due to global suppliers and customerssupply chainsRaw material Increasing volatility of supply and price of nickel, copper, and petroleumprice volatility Compliance Increased focus on organizational processes and transparency and scrutiny Fraud Prevalence of fraud is becoming more widespread and expensive Lean All departments are expected to do more with less operations7
  8. 8. Operational Excellence is Everyone’s Business Supply Chain Human Resources Product Development IT Customer Service Sales Finance Marketing8
  9. 9. Operational excellence requires agility Optimized to create Streamlined to meet product/service at customer needs and lowest costs expectations Flexibility to Customer withstand unexpected Experienced focused changes in demand to ensure loyalty and advocacy
  10. 10. A Balancing Act for Organizations $$$11
  11. 11. Challenges Faced Daily Disconnected Lack of Visibility Poor Performance Supply Chain Processes • Manual processes & disparate sources • Need to control • Connecting IT and Line operational and service of Business: Need to • Lack of insight into costs work together performance • Emerging players and • Resource complexity • Data, Rich but insight distribution channels make it harder to poor providing additional respond to changing • Departments not choices for customers needs working towards • Inflexible and expensive • Difficulty synchronizing common goal systems demand and supply • Inability to accurately • Waste of resources and • Need to simplify back- predict demand or downtime office processes preferences12
  12. 12. IBM operations solutions help plan, manage, & maximize to INCREASE EFFICIENCY AND PROFITABILITY Operations Plan for Operational Success Solutions • Allocate future expenditures in most efficient manner • Ensure the right quantity of the right product is available at the right time and location Plan Manage Day to Day Operations • Enhance existing operational processes • Improve employee productivity and effectivenessMaximize Manage Maximize Operational Performance • Extend longevity of infrastructure and equipment • Improve asset and employee performance Reporting, Analysis, & Data & Text Statistical Predictive Analytics Predictions Mining Analysis Scorecarding & Planning, Budgeting & Business Rules Dashboarding Forecasting & Optimization Modeling Real-time Forecasting & Resourcetili bapa C Decisions Simulation Optimization
  13. 13. DC Water Enhances Asset Maintenance Challenge • Aging infrastructure • Numerous customer complaints • Low asset reliability and lifespan • Disconnected business processes made strategic decisions on what to invest much more difficult Solution • IBM SPSS Predictive Analytics • IBM Cognos Business Intelligence • IBM Maximo Asset Management • IBM Websphere ILOG • ESRI ArcGIS Results Customer Profile • ROI of 629%; Payback in 2 months DC Water distributes drinking water • Increased percentage of emergency investigations and collects and treats wastewater for dispatched within 10 minutes from 49% to 93% more than 600,000 residential, • Reduced customer calls by 36% commercial and governmental • Reduced contract labor costs by $1.8M customers in the District of Columbia. • Reduced gasoline truck costs by 20% DC Water also provides wholesale • Enabled recapture of $3.8M in revenues wastewater treatment services.16
  14. 14. Infinity Insurance Improves Claims Process Challenge • Fraudulent claims process was too slow • Process of payment of legitimate claims was too slow • High monthly costs for subrogation, the process of collecting damages from the at-fault insurance company Solution • IBM SPSS Modeler • IBM SPSS Collaboration and Deployment • IBM Analytical Decision Management • IBM Cognos Results Customer Profile • Achieved an ROI of 403% (payback in 3 months) Infinity Property & Casualty • Reduced time to refer suspicious claims for investigation Corporation, a provider of nonstandard from 14 days to under 24hrs personal automobile insurance with an • Doubled the accuracy of fraudulent claim identification emphasis on higher-risk drivers, • Reduced questionable claims referral time to the depends on its ability to identify company’s special investigative unit by 95% (from 45-60 fraudulent claims for sustained days to 1-3 days) profitability.17
  15. 15. Brammer Group Increases Inventory Turns Challenge • Identified the need to take proactive steps to limit the effects of an inevitable downturn in sales • Realized that identifying and predicting sales patterns could result in up-front cost-savings • Improve the service it provides to customers Solution • IBM SPSS Modeler Results Customer Profile • Reduced total inventory £31.1 million in one year by A €658.4 million business, the reducing the need to carry surplus stock Brammer Group is Europe’s leading • Inventory turnover improved from 3.2x in 2008, to 3.7x by supplier of quality industrial the end 2Q 2009 maintenance, repair and overhaul • Accelerated report creation by up to 97 percent, providing products. The company employs over near-real-time analysis 2,000 people in more than 300 • Improved customer satisfaction locations, across 16 countries.18
  16. 16. Rudolf Olz Meisterbacker GmbH Improves EmployeeSatisfaction Challenge • Keep employee culture during exponential growth • Could not gain insights from its employee surveys about employee needs and general work climate • Lost touch with employees as departments expanded Solution • IBM SPSS Statistics Results Customer Profile • Introduction of more flexible working hours The family-owned company began its • Changes to the rules governing stand-ins successful pastries business in 1938. It • Changes to cross-departmental communication is the market leader and the most procedures popular pastries brand in Austria. The • Led to increased collaborative culture company has stores and warehouses in Austria, Germany, and Switzerland, and in 2010 had sales of €183M.20
  17. 17. Operational visibility paired with performance optimization and analytics is driving new levels of DYNAMIC DECISION MAKING OPERATIONAL PERFORMANCE VISIBILITY OPTIMIZATION ...based on business processes and external events… …configured based onView specific, personalized business rules and businessbusiness dashboards…. policies… …augmented with advanced analytics to suggest next best action, creating an environment of competitive agility that is game-changing.
  18. 18. Predictive Operational Analytics Leverages Every Aspect of theAnalytical Process Analyses Segments Demographic data Time series analysis Reports, Profiles KPIs, KPPs Age Scoring models Gender Anomaly detection Address ... ... Transaction data SKU Prices Scoring Quantity Date ... External data Define List Define System notifications Product responses Assign weight Thresholds Email Weather info (points) to each Reports Supplier info indicator Determine the level of Dashboards ... ... Risk ... Domain Expertise Engage &Detect & Capture Analyze & Predict Act22
  19. 19. What is the cost of maintenance & failures?• How do costs vary by region? Why do they vary?• What is the total cost of ownership of each piece ofequipment?• What will repairs cost me next year? Schedule costs are greatly reduced, less service interruption and increased customer satisfaction
  20. 20. Anomaly Detection Identify anomalous production data and show the specific data that is out of tolerance Peer group profile compared to anomalous runs
  21. 21. Root Cause Analysis of FailuresWhat parts are failing? What is driving the failure? 4 specific combinations of factors that are driving failure are identified automatically Operating conditions, service duration and manufacturing quality all play a role in the failure likelihood
  22. 22. How Likely Is a Failure at Time X?  Leverage all available data – Sensor logs, maintenance logs, condition monitoring data, etc.  Build predictive models – Estimate the failure likelihood at any point in the future for every piece of equipment – Neural Nets, Logistic Regression, Decision Trees, SVM, SLRM, etc.  Apply models to new data – Generate updated failure likelihood values
  23. 23. Real-time condition monitoring based on reliability prediction
  24. 24. Improving Competitiveness with Predictive OperationalAnalytics Source: Operations Management Consulting Marketplace 2010-2013; Kennedy Consulting Research & Advisory29
  25. 25. Utilizing a phased approach can increase time-to-value Time
  26. 26. ANALYTIC-DRIVEN ORGANIZATIONS are distinguished bytheir ability to leverage … All information All perspectives All information Past (historical, aggregated) Transaction data At the point Present (real-time) Application data of impact Future (predictive) Machine data Social data Enterprise content All people All decisions All departments Major and minor Experts and non-experts Strategic and tactical Executives and employees Routine and exceptions Partners and customers Manual and automated