Monday, September 6, 2010

Business analytics (BA) is the practice of iterative, methodical exploration of an organizations data with emphasis on statistical analysis. Business analytics is used by companies committed to data-driven decision making. BA is used to gain insights that inform business decisions and can be used to automate and optimize business processes. Data-driven companies treat their data as a corporate asset and leverage it for competitive advantage. Successful business analytics depends on data quality, skilled analysts who understand the technologies and the business and an organizational commitment to data-driven decision making. Examples of BA uses include:

Exploring data to find new patterns and relationships (data mining) Explaining why a certain result occurred (statistical analysis, quantitative analysis) Experimenting to test previous decisions (A/B testing, multivariate testing) Forecasting future results (predictive modeling, predictive analytics)

Once the business goal of the analysis is determined, an analysis methodology is selected and data is acquired to support the analysis. Data acquisition often involves extraction from one or more business systems, cleansing, and integration into a single repository such as a data warehouse or data mart. The analysis is typically performed against a smaller sample set of data. Analytic tools range from spreadsheets with statistical functions to complex data mining and predictive modeling applications. As patterns and relationships in the data are uncovered, new questions are asked and the analytic process iterates until the business goal is met. Deployment of predictive models involves scoring data records (typically in a database) and using the scores to optimize real-time decisions within applications and business processes. BA also supports tactical decision making in response to unforeseen events, and in many cases the decision making is automated to support real-time responses. While the terms business intelligence and business analytics are often used interchangeably, there are some key differences: BI vs BA Business Intelligence What happened? Answers the questions: When? Who? How many? What else does the data tell us that never thought to ask? Business Analytics Why did it happen? Will it happen again? What will happen if we change x?

Reporting (KPIs, metrics) Includes:

Statistical/Quantitative Analysis

Automated Monitoring/Alerting Data Mining (thresholds) Predictive Modeling Dashboards Multivariate Testing Scorecards OLAP (Cubes, Slice & Dice, Drilling) Ad hoc query

Recognizing the growing popularity of business analytics, business intelligence application vendors are including some BA functionality in their products. More recently, data warehouse appliance vendors have started to embed BA functionality within the appliance. Major enterprise system vendors are also embedding analytics, and the trend towards putting more analytics into memory is expected to shorten the time between a business event and decision/response. A business intelligence architecture is a framework for organizing the data, information management and technology components that are used to build business intelligence (BI) systems for reporting and data analytics. The underlying BI architecture plays an important role in business intelligence projects because it affects development and implementation decisions. The data components of a BI architecture include the data sources that corporate executives and other end users need to access and analyze to meet their business requirements. Important criteria in the source selection process include data currency, data quality and the level of detail in the data. Both structured and unstructured data may be required as part of a BI architecture, as well as information from both internal and external sources. Information management architectural components are used to transform raw transaction data into a consistent and coherent set of information that is suitable for BI uses. For example, this part of a BI architecture typically includes data integration, data cleansing and the creation of data dimensions and business rules that conform to the architectural guidelines. It may also define structures for data warehousing or for a data federation approach that aggregates information in virtual databases instead of physical data warehouses or data marts. The technology components are used to present information to business users and enable them to analyze the data. This includes the BI software suite or BI tools to be used within an organization as well as the supporting IT infrastructure i.e., hardware, database software and networking devices. There are various types of BI applications that can be built into an architecture: reporting, ad hoc query, data mining and data visualization tools, plus online analytical processing (OLAP) software, business intelligence dashboards and performance scorecards.

Business Analytics in Telecom

Competition in the telecommunication market increases every day. To remain profitable and competitive, organizations must understand their operational processes as well as the market behavior, not just in terms of customer but also at the revenue assurance perspective. Even though the year of 2008-09 and 2009-10 was clouded by recession, telecom was the only sector which still was holding the war front despite. Telecommunications Industry Association (TIA) had projected steady U.S. and global telecom market growth in the next few years, producing an estimated $4.9 trillion in revenue in 2011.In the U.S., the telecom market is expected to see 7.2% in compound annual growth rate (CAGR) through 2011, with a 12.5% projected increase globally. For Internet access alone it could mean revenue will exceed $50 billion by 2011, according to the report. The volume in increasing for internet, wireless, IP services, VAS and so is the competition. The turnover is increasing but the ARPU is reducing leading to a much reduced margin for telecom providers. This calls in for a very smart and strategic decision making for the telecom service providers. The decision making capability can be made easier with Business analytics and business intelligence tools and techniques to make use of the tremendous data that the companies are sitting on. Companies need a way to collect more than just data. They need a way to measure and access the knowledge gleaned from this information, and hence, use it to generate competitive intelligence, increasing and improving their operational efficiency. Thus Business Analytics and Business Intelligence play a very important role in the success of telecom operators. Integrated solutions will not only provide telecom companies operators with a management reporting capability but also enable them with real-time intelligence that helps them take smarter and well informed decisions.

Advanced business analytics also help them to maximize their revenue potential from a short window of opportunity by a predictive analytical capability. The Key Performance areas for analytics in Telecommunications are

Customer Relationship Management Account Management and Revenue Management Customer churn and customer retention Market segmentation and Market Penetration Quota Attainment Utilization Fraud Network Planning Network Utilization Call Routing Switch Utilization Service Call Monitoring

Source:- idcindia.com Some of the areas where Predictive Business Analytics can be applied in Telecom:

Operations and Budget Analysis - Operations and Budget Analysis enables to monitor from numerous back-end systems that store the data. Predictive trend analysis helps to monitor budgets, customer satisfaction, sales on a daily basis by executives. Based on the churn of the customers, feedback from existing customers, inquiries from a particular area, tickets and complains from customers

Capacity management - Capacity management Analysis enables to identifying unused or available IT capacity for cost saving. Helps to provide accurate information on capacity usage of the infrastructure. Based on the products and services in a particular area, the usage of the products and services in an area, sales and tariff plans in a particular area, consumer behavior, usage pattern analysis, trend analysis, customer profiling and segmentation. Network operations management - Network operations management Analysis evaluates field technician expenses due to network congestion. Helps to optimize network efficiency after identifying potential areas that needs improvement

For selling a Business Analytics solution in a Telecom industry the Business Analytics vendor needs to have

Understanding on business of the client In depth study of the vision and mission of the client Annual performance targets of the client Market positioning of the client in the Gartner Magic Quadrant Business model of the telecom company Target customers Unique selling proposition Clients, partners, alliances, vendors Revenue Model

The below table acts as a reference for reactive to proactive business analytics

Thus Strategy for adopting Analytics will enable Telecom Companies to perform better in the competitive world and their vision of connecting the world through communications will be Redefined

Types of analytics

Reporting or Descriptive Analytics Modeling or Predictive analytics Clustering Affinity grouping

Basic domains within analytics

Retail sales analytics Financial services analytics Risk & Credit analytics Talent analytics Marketing analytics Behavioral analytics Collections analytics Fraud analytics Pricing analytics Telecommunications Supply Chain analytics Transportation analytics Business Analytics, Text Analytics, Agent Analytics, Web Analytics, Predictive Analytics, Customer Sentiment Analysis, Multi-Channel Optimization, Customer Experience Analytics, Customer Life Cycle Analytics, Social Media Analytics, Voice of the Customer Analytics, Big Data Analytics

From business intelligence to analytics The journey from what to who, when and why.
By Talha Omer
The other day, my analytical team at a major telecommunications company and I were presenting an all-new behavioral segmentation to one of our senior executives. Seeing the first slide, the executive jumped out of his seat in excitement and exclaimed, Some of these insights took me years to uncover after repeated trial and error and hundreds of BI (business intelligence) reports. Using a cell phone to make a voice call leaves behind a significant amount of data. The cell phone provider knows every person you called, how long you talked, what time you called and whether your call was successful or if it was dropped. When you use your cell phone, the cell phone provider knows where you are, where you make most of you calls from, which promotion you are responding to, how many times you have bought before and so on. In many cases, a cell phone is the only thing people carry with them at all times.

For a BI analyst trying to make sense of all of this data, the task becomes manageable thanks to hundreds of attractivelooking tools that instantly create reports presenting data in every conceivable slice, graph, table, pivot or dump imaginable. However, no matter what tool you use, the best that traditional BI can help you understand is what happened. It cannot, no matter how much you torture the data, tell you when something happened, who will it happen to or why something happened. This is precisely the reason that advanced analytics is so important; its the difference between the 99 percent of effort that typically yields very little insight, and the 1 percent that provides a window into the mind of a customer. Borrowing an analogy from the popular MasterCard commercial, the distinction can also be seen as:

Data: petabytes Reports: terabytes Excel: gigabytes PowerPoint: megabytes Analytics: bytes One business decision based on analytics: priceless

Analytics is not always easy petabytes of data everywhere and a priceless insight difficult to find. Creating terabytes of reports, engineering gigabytes of excel sheets by writing killer macros and presenting them in flashy slides to top management in the hope that all this effort will tell you something and result in action rarely occurs. On the other hand, combining the what with the when, who and why will provide a company with a long-term strategic competitive advantage. Many different methodologies answer the when, who and why questions including:

Predictive analysis (to answer the when question identify customers that will take a certain action, e.g. churn) Descriptive analysis (to answer the who question profile customers, e.g. segmentation) Qualitative analysis (to answer the why question identify the reasons for the when and who, e.g. surveying)

If you are new to this world, the last bulleted item the why question is a great way to start your foray because it is easy to implement and full of insights that will be very action-oriented. Though traditional BI has several benefits and is easy to implement, it is confined in its ability to predict, identify and give a full customer view, e.g. predicting customer lifetime, identifying triggers for churn, measuring the influence of social network on your customers decisions or suggesting the next best offer. If we measure any of the following it is likely that we live in the world of BI:

daily revenue churn rate daily unique subscriptions top international calling destinations number of new customers

We are now heading toward a world where we dont simply measure the what question but rather do a rigorous analysis of the what question in order to determine the when, who and why questions such as customers primary purposes and product/service affinities. No matter how you slice and dice the data using traditional BI methodologies and tools, analytics is always big step ahead of it. Analytics requires a business- and data-driven exploratory process. Any attempt to limit either of these dimensions will inhibit its effectiveness. Absence of thorough analysis can lead to frail conclusions and incorrect decision-making. The data for the analysis must be pulled from a number of subject areas: voice, sms (short message service, the text communication service component of phone, Web or mobile communication systems), mms (multimedia messaging service, a standard way to send messages that include multimedia content to and from mobile phones), bill payments, etc. Simply sending all customers a special discount to remain loyal isnt an effective use of marketing funds. Consider the example of a telecommunication company. For marketing analysts to optimize their campaigns, they need to take advantage of analytics techniques such as segmentation analysis to draw a line within their consumer base. By knowing what each segment of customer wants, marketing and campaign management experts can optimize the campaigns for maximum efficiency. Hitting the loyal customer with the wrong offer may put his loyalty at risk. Telecommunication companies are interested in identifying their most profitable customers and rewarding them. A company needs a 360-degree view of its customers spending and behavioral patterns across all properties. Two customers with the same revenue may not necessarily be similar in profit, and each customers future lifetime with the company may vary. Applying advanced analytical techniques such as linear time variant would help identify the most profitable and loyal customers over their lifetime, which is of utmost importance to strategists these days. When analysis is done in an isolated fashion it also leads to the types of mistakes that drive customers away. One company sent out campaigns based on the analysis done on a handful of variables. This was sub-optimal since it did not depict the whole behavior of a customer. Segmentation and profiling across more than 1,500 variables was necessary to depict the true persona of the customer. The result was an increase in marketing return on investment. We live in a world of analytics when we realize that every piece of data we look at drives action that adds the value we are trying to achieve for our customers. Without analytics, BI alone can no longer keep a business competitive only answering the what question is no longer sufficient. The world of analytics that answers the when, who and why questions takes time to move into, but once you get comfortable in it you will have achieved a long-term strategic advantage

Business analytics could be described as the methodical exploration of an organizations data with emphasis on statistical analysis. This post is the first in a series of: 1. Business analytics: Best practices for success (October 2, 2012 you are here) 2. Business analytics: Raise your hand if you hate statistics (November 12, 2012) 3. Business analytics: Raise your hand if you hate research (January 13, 2012)

As Table 1.1 suggests, there are three types of business analytics: descriptive analytics looking at historical data, predictive analytics trying to predict what might happen, and prescriptive analytics focusing on providing different options.

Table 1.2 illustrates the above concepts by providing examples. In prescriptive analytics the data used by the GPS might feed into another program, which calculates several alternatives regarding the route and time one should leave the office in the evening to get home the quickest (between 16:00 and 17:00 versus 18:00 and 18:30). By the way, sign up for our blog - it is FREE! Get the next two installments of this series first.

Inferential statistics whats that?

If our data are normally distributed, parametric statistics might be used but if the variables used are not normally distributed, non-parametric statistics must be used. Below we define these approaches. Source: Business Analytics by DrKPI My.ComMetrics CyTRAP Business analytics: Gaining insights

Use the above table Business analytics: Gaining insights on your blog: Just copy the code in the box below and paste it in a post!

Three methods that provide insights

Of course, good practice or best practice is an important criteria that we need to address when deciding what type of analyses we want to use. Nevertheless, to understand the subtle differences it is necessary to present some examples illustrating descriptive, predictive and prescriptive analytics.

We can describe descriptive analysis as trying to find out how much time it took us on average (mean) to commute home during last month (see first example in Table 1.2). To illustrate how to apply the predictive analytics framework, we may use our on-board GPS. It might be able to tell us which route to take when getting ready to leave the office to drive home (just imagine gridlocked traffic during rush hour in Los Angeles).

Source: Business Analytics by DrKPI My.ComMetrics CyTRAP Gaining insights with business analytics: Examples

Use the above table Gaining insights with business analytics: Examples on your blog: Just copy the code in the box below and paste it in a post!

Source: Business analytics: Examples Illustrating three methods with examples

Conclusion

The best way to get things going is to review the existing or as-is state. Successful business analysis regarding social media activities or social sharing requires the formalization of a common vision, a tuned methodology, and a common set of tools that help reduce risks, control costs, and improve performance. The next step after the above inventory is to build a vision about how business analysis could work when doing social media marketing. For this purpose we have presented the business analysis framework and what methodology would be used. Tables 1.1 and 1.2 show that business analysis approaches are driven by different challenges that await solutions. As the follow-up presentations will show (e.g., Raise your hand if you hate statistics), when the wrong type of data is collected or inappropriate statistical tools are used, the best methodology does not provide you with the insight you need to make the right decisions.
The other day, my analytical team at a major telecommunications company and I were presenting an allnew behavioral segmentation to one of our senior executives. Seeing the first slide, the executive jumped out of his seat in excitement and exclaimed, Some of these insights took me years to uncover after repeated trial and error and hundreds of BI (business intelligence) reports. Using a cell phone to make a voice call leaves behind a significant amount of data. The cell phone provider knows every person you called, how long you talked, what time you called and whether your call was successful or if it was dropped. When you use your cell phone, the cell phone provider knows where you are, where you make most of you calls from, which promotion you are responding to, how many times you have bought before and so on. In many cases, a cell phone is the only thing people carry with them at all times. For a BI analyst trying to make sense of all of this data, the task becomes manageable thanks to hundreds of attractivelooking tools that instantly create reports presenting data in every conceivable slice, graph, table, pivot or dump imaginable. However, no matter what tool you use, the best that traditional BI can help you understand is what happened. It cannot, no matter how much you torture the data, tell you when something happened, who will it happen to or why something happened. This is precisely the reason that advanced analytics is so important; its the difference between the 99 percent of effort that typically yields very little insight, and the 1 percent that provides a window into the mind of a customer. Borrowing an analogy from the popular MasterCard commercial, the distinction can also be seen as:

Data: petabytes Reports: terabytes Excel: gigabytes PowerPoint: megabytes Analytics: bytes One business decision based on analytics: priceless

Analytics is not always easy petabytes of data everywhere and a priceless insight difficult to find. Creating terabytes of reports, engineering gigabytes of excel sheets by writing killer macros and presenting them in flashy slides to top management in the hope that all this effort will tell you something and result in action rarely occurs. On the other hand, combining the what with the when, who and why will provide a company with a longterm strategic competitive advantage. Many different methodologies answer the when, who and why questions including:

Predictive analysis (to answer the when question identify customers that will take a certain action, e.g. churn)

Descriptive analysis (to answer the who question profile customers, e.g. segmentation) Qualitative analysis (to answer the why question identify the reasons for the when and who, e.g. surveying)

If you are new to this world, the last bulleted item the why question is a great way to start your foray because it is easy to implement and full of insights that will be very action-oriented. Though traditional BI has several benefits and is easy to implement, it is confined in its ability to predict, identify and give a full customer view, e.g. predicting customer lifetime, identifying triggers for churn, measuring the influence of social network on your customers decisions or suggesting the next best offer. If we measure any of the following it is likely that we live in the world of BI:

daily revenue churn rate daily unique subscriptions top international calling destinations number of new customers

We are now heading toward a world where we dont simply measure the what question but rather do a rigorous analysis of the what question in order to determine the when, who and why questions such as customers primary purposes and product/service affinities. No matter how you slice and dice the data using traditional BI methodologies and tools, analytics is always big step ahead of it. Analytics requires a business- and data-driven exploratory process. Any attempt to limit either of these dimensions will inhibit its effectiveness. Absence of thorough analysis can lead to frail conclusions and incorrect decision-making. The data for the analysis must be pulled from a number of subject areas: voice, sms (short message service, the text communication service component of phone, Web or mobile communication systems), mms (multimedia messaging service, a standard way to send messages that include multimedia content to and from mobile phones), bill payments, etc. Simply sending all customers a special discount to remain loyal isnt an effective use of marketing funds.

Consider the example of a telecommunication company. For marketing analysts to optimize their campaigns, they need to take advantage of analytics techniques such as segmentation analysis to draw a line within their consumer base. By knowing what each segment of customer wants, marketing and campaign management experts can optimize the campaigns for maximum efficiency. Hitting the loyal customer with the wrong offer may put his loyalty at risk. Telecommunication companies are interested in identifying their most profitable customers and rewarding them. A company needs a 360-degree view of its customers spending and behavioral patterns across all properties. Two customers with the same revenue may not necessarily be similar in profit, and each customers future lifetime with the company may vary. Applying advanced analytical techniques such as linear time variant would help identify the most profitable and loyal customers over their lifetime, which is of utmost importance to strategists these days. When analysis is done in an isolated fashion it also leads to the types of mistakes that drive customers away. One company sent out campaigns based on the analysis done on a handful of variables. This was sub-optimal since it did not depict the whole behavior of a customer. Segmentation and profiling across more than 1,500 variables was necessary to depict the true persona of the customer. The result was an increase in marketing return on investment. We live in a world of analytics when we realize that every piece of data we look at drives action that adds the value we are trying to achieve for our customers. Without analytics, BI alone can no longer keep a business competitive only answering the what question is no longer sufficient. The world of analytics that answers the when, who and why questions takes time to move into, but once you get comfortable in it you will have achieved a long-term strategic advantage

industry-specific analytics

Home analytics

industry-specific analytics

blueoceans consultative analytical offerings can be applied in virtually all industry segments. Our talented pool of experienced statisticians/consultants and domain experts are not only adept at offering answers to industry problems, but design customized solutions for complex business situations.
consumer packaged goods

The CPG industry is highly dynamic and characterized by continuous innovation, market expansion and constant effort to increase ROI. Our suite of advanced analytical capabilities range from providing insights on brand and products to marketing solutions, including the following:

Market mix model Brand switching


retail

Price markdowns and trade promotions Channel analysis Product analysis Demand forecasting Claims and promotion discount analytics Testing analysis Social media analytics

The constantly changing retail space presents major challenges as it evolves to enhance the shopper's experience, optimize inventory and merchandising and store operations and capitalize on opportunities to make better decisions. We have designed our retail solutions specifically to account for these challenges and they include:

Sales analytics Price markdowns and promotions Demand forecasting Loyalty management Market basket analysis Real time sales analytics

telecommunications

The telecom business has rapidly evolved in recent years. With the increased volume of traffic and new entrants with innovative offerings, the competition has only grown fiercer. Now service providers must compete harder than ever to maintain brand loyalty. Effective customer targeting and high customer satisfaction delivery require thoroughly understanding the customer life cycle and the key reasons for churn. We provide critical answers to these business issues through data mining, campaign analytics and complex mathematical models:

Customer segmentation Acquisition management Usage and revenue enhancement Churn/retention management Campaign analytics Social network analytics Self-service optimization

banking and financial services

With strict and changing regulations and compliance laws, the banking industry is challenged with credit losses and retaining profitable customers and market share. Members are scrutinizing operational strategies, re-evaluating business models and investing in system and process efficiencies. Some of our banking and financial solutions include:

Customer segmentation Acquisition management Portfolio management (cross sell, up-sell, ) Collections/recoveries analytics Risk analytics Social media analytics

automotive and manufacturing

The change in market environment necessitates that the auto and manufacturing giants have a strong data driven support system to aid in the decision making process. Some of our solutions for the automotive and manufacturing industry are:

Collection analytics (B2B) Demand forecasting Promotion analytics Customer segmentation Dealer segmentation and dealer analytics Retail sales analytics

technology

The business requirements and constraints of running a technology company are very complex. Rapid innovations make it critical to understand key growth drivers and plan appropriately for the future. To facilitate quick and accurate decisions we offer the following solutions:

Retail sales analytics Customer segmentation Dealer segmentation and dealer analytics Collection analytics (B2B) Return on marketing investment (ROMI analysis)