Enterprise Wide Advanced Analytics

Traditional business intelligence helps an organisation better understand the here, the now, and some of the why of any given business situation. It may be applied to competition, customer relationships, or partnerships.

Advanced analytics delves deeper into the “why” of a given scenario, and predicts the likely outcomes. By applying various advanced analytic techniques to data, it enables users to answer questions or solve problems that were previously difficult, if not impossible, to solve. For example:

• Determine the propensity of customers to choose one action over another
• To predict which current customers will no longer be customers six months from now
• To predict which prospects are most likely to become customers within the next 3 months.

Advanced analytics has a much broader approah than data mining. Data mining uses analytical techniques to recognize patterns in data, whereas advanced analytics provides a broader context of insight and interpretation. This provides greater value, to more people within an enterprise, to optimize efforts to increase profitability.

Benefits of Advanced Analytics

Advanced analytics is not an infallible predictive tool, but it does provide significant insight models of the likely outcome of events, trends, marketing campaigns or competitive situations. This provides business managers with greater near/real time business decision support.

Tangible Benefits

By applying advanced analytics to an enterprise’s relationships with its customers, suppliers and partners, likely behaviors can be predicted, and the ramifications those behaviors can be translated into hundreds-of-thousands to tens-of-millions of dollars in costsaving
and profit-maximizing decisions.

Intangible Benefits

There are also intangible benefits:

• Increased efficiency
• Increased innovation - visibility of results from on-target analysis, can spur even more creative thinking and innovation.

Impact on Competitive Advantage

Applying advanced analytics can provide compelling and significant,
competitive advantage.

Increased Revenue - It enables enterprises to better target and attract the right customers, and positioning the right products to those customers.

Decreased Costs - At the same time, it identifies those customers with low potential profitability, thereby providing a basis to reduce marketing efforts to them.

Over time, this laser focused attention builds a stronger, more profitable customer base.

SCM Benefits

Cost savings can also be gained in supply chain management, for example by reducing re-stocking fees in the case of a retailer.

Advanced analytics can show the appropriate supply of given products, reducing the cost of warehousing and re-stocking fees.

Reducing Churn

Being able to project when profitable customers are likely to your enterprise for a competitor. enables proactive, preventative action – to inspire the wavering customer to alter his or her behavior and remain with the enterprise.

Forecasting applications can create churn models to develop an overall customer
management strategy, develop acquisitions modeling, discern fraud, etc.

These are just a few examples of how advanced analytics merges data and analysis for insight in the present and foresight into the future ramifications of business decisions.

The Future of Advanced Analytics

Employing advanced analytics on data warehouse data to accomplish trend analysis will reduce the need for specialized BI software. Rather it will be integrated into operational process technology and desktop applications, to move organisations toward true real-time
decision making in terms of how they interact with customers .

Recent advances in analytics will support the ability to analyze non-structured data such as CAT scan images, digital photographs, or scanned copies of archived text documents. This will be most relevant to medical, military and scientific applications.

Challenges in Adopting Advance Analytics

The main challenges with advanced analytics are not so much internal. It does not require specialised technology to gather and organize data. the main challenges are external:

• Increased competitiveness
• Increased business regulations
• Increased customer fluctuations

Advanced analytics requires a change in discipline in how an organisation gains insight and forecasts within this increasingly complex environment.

However, these challenges truly represent an opportunity for an enterprise to create a
compelling success story of differentiating itself from the competition.

This competitive differentiation is the primary benefit of advanced analytics.

It drives efficiencies right across the organisation, for example:

• More efficiently bundle the right set of product offerings for customers
• Develop a better targeted marketing program
• Better predict the budget required to deliver projected outcomes
• Optimise inventory management

However, the real value of advanced analytics is only released, when each of these specific applications are integrated to support an enterprise wide forecast or model. By understanding the impact of each initiative on the busines, the outcomes on other areas of the business can be visualised, and more holistic, proactive decisions in advance of those outcomes.

Also See: Best Practice Guidelines For Performance Management Tools

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