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How to become an Analytics
driver organization and Why
bother ?


Juha Teljo
Business Intelligence Solution
Executive
Information will be the 'oil of the 21st
century.’

Gartner 2010
O’Reilly:27.4.2011, Got Iphone, Apple is recording your moves
TomTom Caught Selling Speed Data to Dutch Police
    PcWorld 28. April 2011



4
5
= Analytics Quotient

                    Realized
                  =
                    Potential
The more you infuse analytics into your business, the higher
 your AQ and the better you and your business will perform
Analytics
Correlates to Performance

          Organizations that lead in
          analytics outperform those
          who are just beginning to
          adopt analytics


          Top Performers are more
          likely to use an analytic
          approach over intuition*




Source: Analytics: The New Path to Value, a joint MIT Sloan Management Review and IBM Institute of Business Value study. Copyright © Massachusetts Institute of Technology 2010.




*within business processes
 7
Driving Better Business Outcomes Across the
Enterprise



    $300 Million         From >1% to           $200 Million
        in savings          <0.5%                increase in
    & fraud reduction   Reduction in product     Cash Flow
                           return rates




     $24 Million         600% increase         40% decline
    in reduced waste         in cross-sell
         and fraud                              in homicide
                              campaign              rates




8
ALIGNED
                            Collaboration across
                            business objectives




                                                               AGILE
                                                                  Highly
 AWARE                                                          responsive
                                                               to changing
Alert, observant,
                                                                 priorities
    informed
 and perceptive




     FOCUSED                                       PREDICTIVE
   Clear understanding of                    Able to anticipate, look forward
      what’s important                            and set expectations
Operations

                 Human
                Resources                              Product
                                                     Development


                                                                   IT




     Customer
      Service

                 Sales
                                                     Finance

                            Marketing




10
Who is leading the way ?
Must balance new user expectations with need for
       governance and control

                                                   I must deliver
                                                   reliable, lower-
     I must make                                 cost, secure analytic
faster, more proactive                                 solutions
 decisions that drive                                     (IT)
competitive advantage

                                       IT and
                         Business
                                       Finance

                                                       I must align
       I expect                                   resources, lower risk,
fast, fun, frictionles                           set strategy, and govern
     s access to                                   access to sensitive
analytics wherever                                       information
         I go!
                                                          (Finance)
New kind of agility and adaptability is required
Just as people expect from their social
networks

          “I want to connect and share things with the
           friends in my life.”



          “I want to be updated on what’s new in my
           friends’ lives.”



          “I want to look back at old times we’ve enjoyed.”
They also need in their organizations

              “I need to easily connect with people who are
               relevant to the decisions I make.”



              “I need to better understand the perspectives of
               my colleagues.”



              “I need to easily access decision history in order to
               learn, reference and create best-practices.”




1
Social Networks connect decisions across the organization
      Strategic
        • Few decisions made                • Financially oriented
          quarterly, annually               • Monitored with scorecards and
        • Senior audience including CEO,      dashboards
          COO, business/financial           • Understood with complex
          analysts                            analysis and modeling

       Tactical
                                              • Decision triggers include
          • Daily, weekly, monthly              escalations, reporting
            decision support                    periods, product or release
          • Mid-level management                cycles, etc
            including director, VP level      • Processes understood but not
                                                formalized
     Operational                              • Data complements expertise

          • Driving 1000s of decisions on    • Self service autonomy
            information now                • Take action with
          • Broad audience of users across   exceptions, alerting and
            operational units                collaboration
                                             • Highly structured
                                               processes, exceptions driving
                                               response
„Expect the Unexpected“
David Axson




                          © Reuters
„But the budgeting process at mo st
companies has to be the mo ineffective
                          st
practice in manageme It sucks the
                      nt.
energy, time, fun and big dreams o out f
an o rganizatio (...) And yet (...)
               n.
companies sink co untless ho into
                             urs
writing budgets. What a waste!“
J Welch, 2005
 ack



Over 35% of all companies
report that their budget is out of
date within the first quarter.
Being Predictive pays off !
    Predictive Maintenance of production cars
•     Real-time telemetry from car
       – 12,000 elements
•     Run through predictive models in real time
•     Failures predictions generate
       – Direction to take car for service
       – Information for service centre

    Implemented predictive analytics in
      warranty claims process
     Reduced warranty cases from 1.1 to
      0.85 per vehicle

     5% reduction in warranty cases

     Annual savings of €30m
Be Aware - World is changing fast !
                                                                 Optimize Campaign design
             Web: Blogs                                          Optimize Product design
             Message Boards                                      Segment Market
             Forums, News
                                                                 Change Detractors to
                                                       Engage    Influencers
                              Sense
                                                         Act
IBM Cognos Consumer           Monitor
Insight
                                          External




                                          Internal      Learn
                               Extract                 Analyze      Build and apply
                              Integrate                             Predictive Models




  Sales   Surveys
          Panels
                                                     Visualize
ALIGNED
                            Collaboration across
                            business objectives




                                                               AGILE
                                                                  Highly
 AWARE                                                          responsive
                                                               to changing
Alert, observant,
                                                                 priorities
    informed
 and perceptive




     FOCUSED                                       PREDICTIVE
   Clear understanding of                    Able to anticipate, look forward
      what’s important                            and set expectations
Analytics
Powers Organizations
to Outperform




22
23

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How to become an Analytics-driven organization - and why bother? - IBM Smarter Business 2011

  • 1. How to become an Analytics driver organization and Why bother ? Juha Teljo Business Intelligence Solution Executive
  • 2. Information will be the 'oil of the 21st century.’ Gartner 2010
  • 3. O’Reilly:27.4.2011, Got Iphone, Apple is recording your moves
  • 4. TomTom Caught Selling Speed Data to Dutch Police PcWorld 28. April 2011 4
  • 5. 5
  • 6. = Analytics Quotient Realized = Potential The more you infuse analytics into your business, the higher your AQ and the better you and your business will perform
  • 7. Analytics Correlates to Performance Organizations that lead in analytics outperform those who are just beginning to adopt analytics Top Performers are more likely to use an analytic approach over intuition* Source: Analytics: The New Path to Value, a joint MIT Sloan Management Review and IBM Institute of Business Value study. Copyright © Massachusetts Institute of Technology 2010. *within business processes 7
  • 8. Driving Better Business Outcomes Across the Enterprise $300 Million From >1% to $200 Million in savings <0.5% increase in & fraud reduction Reduction in product Cash Flow return rates $24 Million 600% increase 40% decline in reduced waste in cross-sell and fraud in homicide campaign rates 8
  • 9. ALIGNED Collaboration across business objectives AGILE Highly AWARE responsive to changing Alert, observant, priorities informed and perceptive FOCUSED PREDICTIVE Clear understanding of Able to anticipate, look forward what’s important and set expectations
  • 10. Operations Human Resources Product Development IT Customer Service Sales Finance Marketing 10
  • 11. Who is leading the way ?
  • 12. Must balance new user expectations with need for governance and control I must deliver reliable, lower- I must make cost, secure analytic faster, more proactive solutions decisions that drive (IT) competitive advantage IT and Business Finance I must align I expect resources, lower risk, fast, fun, frictionles set strategy, and govern s access to access to sensitive analytics wherever information I go! (Finance)
  • 13. New kind of agility and adaptability is required
  • 14. Just as people expect from their social networks “I want to connect and share things with the friends in my life.” “I want to be updated on what’s new in my friends’ lives.” “I want to look back at old times we’ve enjoyed.”
  • 15. They also need in their organizations “I need to easily connect with people who are relevant to the decisions I make.” “I need to better understand the perspectives of my colleagues.” “I need to easily access decision history in order to learn, reference and create best-practices.” 1
  • 16. Social Networks connect decisions across the organization Strategic • Few decisions made • Financially oriented quarterly, annually • Monitored with scorecards and • Senior audience including CEO, dashboards COO, business/financial • Understood with complex analysts analysis and modeling Tactical • Decision triggers include • Daily, weekly, monthly escalations, reporting decision support periods, product or release • Mid-level management cycles, etc including director, VP level • Processes understood but not formalized Operational • Data complements expertise • Driving 1000s of decisions on • Self service autonomy information now • Take action with • Broad audience of users across exceptions, alerting and operational units collaboration • Highly structured processes, exceptions driving response
  • 18. „But the budgeting process at mo st companies has to be the mo ineffective st practice in manageme It sucks the nt. energy, time, fun and big dreams o out f an o rganizatio (...) And yet (...) n. companies sink co untless ho into urs writing budgets. What a waste!“ J Welch, 2005 ack Over 35% of all companies report that their budget is out of date within the first quarter.
  • 19. Being Predictive pays off ! Predictive Maintenance of production cars • Real-time telemetry from car – 12,000 elements • Run through predictive models in real time • Failures predictions generate – Direction to take car for service – Information for service centre Implemented predictive analytics in warranty claims process  Reduced warranty cases from 1.1 to 0.85 per vehicle  5% reduction in warranty cases  Annual savings of €30m
  • 20. Be Aware - World is changing fast ! Optimize Campaign design Web: Blogs Optimize Product design Message Boards Segment Market Forums, News Change Detractors to Engage Influencers Sense Act IBM Cognos Consumer Monitor Insight External Internal Learn Extract Analyze Build and apply Integrate Predictive Models Sales Surveys Panels Visualize
  • 21. ALIGNED Collaboration across business objectives AGILE Highly AWARE responsive to changing Alert, observant, priorities informed and perceptive FOCUSED PREDICTIVE Clear understanding of Able to anticipate, look forward what’s important and set expectations
  • 23. 23