• October 31, 2007
  • By Jessica Tsai, Assistant Editor, CRM magazine

Analytics Proponents Are Often All Alone

ORLANDO, FLA. -- As part of SPSS's Directions North American Conference here Monday, all of the keynote panelists portrayed themselves as the visionaries of their respective companies. Each speaker strongly described predictive analytics as a means to elevate a company above its competition -- and, ultimately, to better serve its customers -- regardless of any corporate obstacles. "If you know this is right, you need to just take [other executives'] criticism. Don't let them win the battle!" said Mike Hayes, senior vice president of The Bon-Ton Stores, a Pennsylvania-based operator of over 200 department stores. When things get tight, said Alex Kormushoff, senior vice president of worldwide field operations at SPSS, companies tend to slash everything not directly related to business operations. Often, that means reducing -- or even eliminating -- investments in strategic, forward-thinking components such as analytics. According to Kormushoff, however, the competitive landscape is changing, forcing companies to compete differently. He and other panelists emphasized that truly successful businesses focus on alignment of all business processes. By aligning business goals with an education in analytics and technology, companies can effectively "take the next step," Kormushoff told the audience. Competing on analytics will force companies not only to push the limits of technology but to actually use that technology in cutting-edge ways to delve deeper into customer data and to foster better customer relationships. As Tom Davenport had mentioned in his keynote presentation
, panelists agreed that the first step in any analytics initiative requires getting the quintessential data. "You can never have enough data," Kormushoff added. Because every model a company builds is ultimately linked back to its data, panelists advised doing as much as possible with the data on hand, but not to let that become a limitation. "Think big, start small," Hayes advised. "Do it in the context of building complexity...there will always be new things coming at you," he added. With the rise of predictive analytics, businesses are reaching a level of awareness about their operational initiatives that simply did not exist before, according to Alastair White, customer strategy director at Royal & SunAlliance, a worldwide insurance provider headquartered in the United Kingdom. Many executives, he added, are still struggling to make sure analytics deployments are successful, but they're becoming more willing to take a little risk. "People are saying, 'Can we do this?' and 'Tell me more about this,' " he said. Moving up the decision chain proves to be a huge step for companies. For any business, the link to the chief executive officer "is critical," said Eric Pelander, partner at Waterstone Management Group, which recently announced a partnership with SPSS to build predictive analytic capabilities and help its customers develop a competitive advantage. C-level executives are often the ones who are empowered to make the necessary changes, and while it may seem demeaning, panelists suggested using small words when speaking with executives, in order to make the benefits easily understood. Still, the obstacles of a corporate hierarchy often seem insurmountable -- and often require a well-developed sense of tact and political survival. "I fight in a way that I can still keep my job," Hayes said, but he admitted that he's "always fighting." When you develop an atypical proposal, he added, and have the data to support your initiatives, be confident enough to say, "This is the direction we need to take." Hayes recounted a time, for example, when Bon-Ton wanted to focus on just a single customer profile. However, he knew that oversimplifying the business down to a 55-year-old consumer exemplar would significantly hurt the company's overall potential, motivating him to push for five or six different customer types instead. Strategic analytics is moving toward the ability to predict a customer's next move and act upon it. Regardless of the wisdom of an initiative, though, many organizations' business units need to see the result of predictive analytics before they'll truly believe in it, panelists said. As a result, someone needs to push for a united "predictive enterprise." According to panel moderator Ron Powell, cofounder and editorial director of Business Intelligence Network, with permission and enough bandwidth, companies have the opportunity to explore vast opportunities. Get the siloed groups to understand why they should be involved, he told the crowd, and as an entire organization, jointly find a better answer.

Related Articles: Predictive Analytics Foresees Change in the Future SPSS Directions '07: The keynote speaker at the company's North American Conference talks about gaining a competitive edge by doing the math. Analyzing Business Turnaround Companies that embrace predictive analytics can gain a competitive edge, according to Tom Davenport. SPSS Refreshes Its Data Mining Software Clementine is equipped with nearly 50 major enhancements: data preparation, graphs, security, performance, and more. SPSS Offers Another Dimension Version 4.0 of SPSS's EFM solution, when tied to other applications, provides the enterprise with EFM suite. Secret of My Success: Minimizing Customer Guesswork A Swiss telecom provider uses SPSS's analytics to gain foresight into its customers and keep retention rates high. Better Info Leads to Better Campaigns SPSS Software provides quick analysis and answers. SPSS Highlights Customers' Future Needs Predictive analytics helps companies realize how to see customers' value both now and in the long term. Feature: Predicting Profitability Enterprises are finally developing strategies to allow them to identify -- and sell to -- their most profitable customers. Feature: Analytics Brought to Bear How strength in numbers -- in this case, the analytics of customer data -- transforms sales teams into sales forces. Feature: Avoiding Analysis Paralysis Single-view. Real-time. Predictive. The variety of analytics applications can be overwhelming. Here are the key trends in analytics to help sort through the clutter. The Tipping Point: Analytics Is the Answer What do contact center managers need to generate revenue? New tools and technologies. Siebel Takes CRM Analytics Apps Market Share The company is 'positioning' itself as offering enterprise analytics. CRM Analytics: Opportunities and Challenges Frost & Sullivan presents a what's-hot discussion; financial services, retail, and telecommunications are active cross-selling areas now. On the Scene: BI Does Not Equal PA SPSS Predictive Analytics Summit '05: Underscoring the difference between analyzing the past and predicting the future. Viewpoint: Gain Pareto Thinking in CRM Intelligent predictive analytics helps enterprises find the vital few. Viewpoint: Driven with Business Expertise, Analytics Produces Actionable Predictions Run data mining as a business activity to generate customer predictions that will have a business impact. Feature: Get Smart! Enterprises are relying more and more on analytics to derive added value from their CRM systems. Market Watch: Analytics Analytics has taken a secure place in the big picture of CRM.
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