Given that making the right decisions consistently separates the leaders from the rest of the pack, the real question for any business leader is how can information be leveraged to make the right business decisions and create differentiation for the organization. Read More: http://www.infosys.com/building-tomorrows-enterprise/digital-consumers/Pages/index.aspx

1. Insights
Decision-making Leveraging Technology
- Komal Jain
In the five decades that management and business literature has evolved, numerous studies have been conducted on
what really separates successful companies from the rest. These studies highlight multiple reasons for their success
ranging from the presence of a visionary leader, ability of an organization to adapt to ever-changing conditions and
seizing opportunities at the right time. However, one of the most important factors that stands out is the ability to make
right decisions on a consistent basis.
According to Jim Collins, the author of best-selling book “Good to Great,”
“Breakthrough results come from a series of good decisions diligently executed and accumulated on top of one
another. Great companies make many more good decisions and these decisions are based on brutal facts.”
Given that making the right decisions consistently separates the leaders from the rest of the pack, the real question for any
business leader is how can information, across the organization, be leveraged to make the right business decisions and
create differentiation for the organization.
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2. On the one hand, we have seen many significant technological extremely dynamic by leveraging yield management software.
changes in terms of innovation ranging from widespread The company can analyze a large volume of data gathered from
availability of mobile Internet, across both developed and multiple sources including competitive pricing information.
developing countries, to enterprise mobility, availability of Today, Amazon can very quickly change its product pricing
cheap computing power through Cloud and significant growth and offer best deals to its customers in a matter of minutes -
in the arenas of Big Data and analytics. something that would take a traditional retailer days…even
weeks.
On the other hand, companies can capture a great volume
of structured and unstructured data from multiple sources Google
such as customer searches, preferences, order history, social Each week, millions of users around the world search for health
networking sites, online forums, call records, photo archives, information online. As part of Google Flu Trends, Google
video archives, blogs and such like. According to some has diagnosed a close relationship between the number
estimates, Wal-Mart handles more than 1 million customer of people searching for flu-related topics and the number
transactions every hour, which are imported into databases of people actually exhibiting symptoms of flu. Google Flu
that are estimated to contain more than 2.5 petabytes of data Trends currently reaches a number of countries around the
– the equivalent of 167 times the information contained in all world and is updated every day. For epidemiologists, this is
the books in the US Library of Congress! Facebook handles an exciting development, because early detection of a disease
more than 40 billion photos from its user base. In terms of outbreak can reduce the number of people affected. Such real-
cheap computing power, decoding the human genome time estimates may enable public health officials and health
originally took 10 years to process, and now it can be done professionals to improve response to seasonal epidemics and
in a week at significantly lower costs. All these changes have pandemics.
provided companies the opportunity to leverage technology
and data to obtain insights that, in turn, help them improve Capital One
customer satisfaction, identify opportunities for new product Capital One leverages its advanced data analytics expertise
introduction, improve customer conversion rates, focus on to discover, target and serve its most profitable customers;
premium customers. Here are some interesting examples: it runs more than 300 tests every day towards this end. The
company effectively uses data on interest rates, rollover
Here are some more tales from the business side.
incentives, special promotions, and such like to decrease
Amazon the cost of customer acquisition and increase its customer
The global leader in e-commerce was one of the first few retention rate. According to a study, Capital One increased its
companies to customize its website and provide personalized customer retention by 87% and lowered the cost of acquiring
recommendations on the basis of users’ buying behavior, a new customer by 83% over a period of 2-3 years by using
search and browsing history. This personalized experience advanced data analytics.
enabled Amazon to maintain customer stickiness and led Marriott
to Amazon’s fast growth. Now, Amazon has made pricing
This leading hospitality organization employs fact-based
decision-making to optimize its pricing model and increase
occupancy levels. Marriott’s revenue-management system,
One Yield, identifies its most profitable customers through its
loyalty program and targets special marketing offers at them.
Marriott realized an increase in revenue from leisure customers
and an annual profit increase of $86 million. Marriott attributes
these results, in part, to One Yield.
2 | Infosys

3. As is evident from these instances, companies are constantly do to overcome this? There is merit in focusing on the following:
mining large volumes of data to obtain deeper insights and
make improvements across a wide range of operations. If Asking the right questions
you consider these examples, few common themes emerge: Companies are succeeding in leveraging big data not only
because they have the right tools, but also because they
1) Availability of Relevant Data and Cheap Computing Power
are asking the right questions. In every company, it is the
The availability of relevant data and the organization’s ability leadership’s responsibility to define vision, identify success
to capture it economically is primary and most significant. parameters and set the right priorities. Business analytics
The advent of sensors has facilitated data availability. cannot replace the power of human vision and insight. Efficient
Similarly, Internet forums and social media platforms, like business leaders are invaluable assets to the company –
Facebook and Twitter, have turned into invaluable data because it is they who provide vision, spot great opportunities,
sources of customer preferences and buying behavior. understand market trends, and motivate both consumers and
In addition, open source frameworks such as Apache™ employees to embrace change.
Hadoop® have enabled companies to process petabytes
of information cost effectively. This combination of Effective decision making
information being readily available and low cost computing Successful organizations provide decision makers the right
power has accelerated the pace of data analytics. information at the right time. Business analytics and big data
can provide insights at a much faster pace than ever before.
2) Use of Right Skills and Processes
The organization structure should be flexible and agile to
Many companies spend millions of dollars on the latest harness these opportunities. Leaders need to open their minds
software and hardware to get them the best data analytics to out-of-the-box ideas and insights. They need to consciously
engines. Having the right processes and the right talent is look at minimizing the “Not-Invented-Here Syndrome.”
equally important to analyze aggregated data and turn it
into actionable results. At times, not having the right talent Openness to change
(core skills like data scientists) could potentially slow the Business analytics calls for change in the decision making
complete program. culture of companies. The first question a data-driven
organization asks itself is “What do we know and what do
3) Close Monitoring of the Feedback Loop
we not?” and not “What do you think?” Becoming such an
A closely monitored feedback loop is important to fine-tune organization requires a company to move from a culture of
models and improve the accuracy of data-based analysis, relying on raw instinct to adopting a very data-centric view.
which becomes significant when companies are trying to Leaders should promote an unbiased, methodical approach
correlate multiple factors impacting their environment. towards data analytics and right decision making; they must
avoid focusing on what cannot be done and instead make a
That being said, technology alone can’t do it all. conscious effort to emphasize what can be done to realize
There are numerous examples of companies having invested the company’s vision.
millions of dollars in the latest technology and still falling short
Avoiding selective use of data
of accurately forecasting market needs. When it comes to
path-breaking innovation or new market entry, data analytics Organizations need to break the bad habit of pretending to be
can often fall short. Henry Ford once said, “If I had asked my more data-driven than they actually are. Many unnecessarily
customers what they wanted, they would have said faster spice up presentations with a lot of data in support of decisions
horses!” More recent, is the example of Apple’s launch of that have already been made. Others make decisions and
the iPod and iTunes - online music store. While conventional solicit the help of consultants to validate or support them.
research predicted that such a product would fail as customers
Economic cost
download free music from the Internet and would be unwilling
to pay for music, Apple co-founder Steve Jobs ignored the Economic cost is an important factor in defining technology
findings and said: “It isn’t the consumer’s job to know what she investments. Companies go to great lengths to build the best
want. That is Apple’s job. Our job is to figure out what they’re decision-making engines possible, spending millions of dollars
going to want before they do.” in the process. The availability of technology does not imply that
it should be used. Apart from considering the cost of software,
iPod and iTunes went on to completely revolutionize the music
services, hardware, and ongoing maintaining costs, companies
industry by providing consumers a viable option to counter
also need to consider the management time required for such
pirated music. It’s clear that sometimes it is essential to create
initiatives. They should define the level of information required
a vision of the future and build the required product lines,
for decision making – for instance, is it a broad trend or granular
ignoring historical data if need be. While prior data analysis
customer information that’s needed?
can provide some insights, it takes vision to conceptualize
something new.
Technology has its own limitations when it comes to identifying
the sources of long-term business impact. What can companies
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4. In summary The evidence is clear: Effective understanding REFERENCES
of data leads to better decisions. Leaders
• Big Data – Management Revolution in
of successful organizations are already HBR
embracing this mindset to create competitive • NY times article
differentiation. They are combining data with
• Competing On Analytics by Thomas H.
vision and foresight, and changing the structure Davenport and Jeanne G. Harris.
and culture of their organizations to become • http://www.google.org/flutrends/
truly data-centric. And hugely successful.
About the Author
Komal Jain
Associate Vice President and Head of Semiconductor Sector - North America, Infosys
Komal joined the company in June 1998 and since then has played a variety of leadership roles in client services,
sales & operations. Komal has been instrumental in helping clients develop and implement their Business Transformation
programs, Global Sourcing strategy and IT initiatives. Komal participates in the steering committees of many of the
key client relationships.
Komal holds a Bachelor’s degree in Electronics Engineering from Kurukshetra University and an MBA from the Indian
Institute of Management, Kolkata. Komal also is a marathon runner and lives in the Dallas, TX.
About Infosys
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