Analyze This, That & Everything In Between

NASHVILLE: The 23rd edition of Teradata’s annual customer conference, Partners 2014, appears to coincide with a major change in how business is being perceived. For the first time the majority of the 4,000-plus attendees came from the business, and not IT professions. To paraphrase, ‘analytics is too important to be left to the techies’.

“The world is becoming increasingly digital,” said Eric Schmidt, Google Chairman, in a recent interview. “Every major corporation needs a software strategy, needs a data strategy. If not, then you have no real strategy.”

During a panel session on the customer engagement model, Teradata CMO Lisa Arthur said Schmidt’s comments are particularly appropriate as there is a “real inflection point for marketers to solve this problem. Not only is a data strategy an imperative, it needs to be shared.”

There is no shortage of evidence to support the conclusion that data analytics is a — if not the — critical tool required for success in the emerging digital economy. Companies that make data-driven decisions are more effective — 5% more productive and 6% more profitable — said Teradata President and CEO Mike Koehler. “The competitive battle field can be won or lost by analytics”.

That’s according to a 2011 MIT study, and while dated, its findings represent an “enormous” advantage, said Bob Fair, EVP and Chief Marketing and Information Officer, Teradata. “You can’t survive long if your competitors are beating you by 5-6% on the bottom line.”

Robert McClarin, Sr. Mgr., 7-Eleven Stores, a co-panelist with Arthur, said data-driven business is an innovation and a “key part of differentiation.” If you’re not doing data-driven marketing within the next four years, you’re at risk of falling behind, he stated.

Another panelist, Gartner Research VP Adam Sarner, said the majority of the market, 80%, are trying to make analytics work, driven in part by fear of falling behind their competitors. “Customers are knocking on our doors right now. The demand is absolutely there.”

Analytics is table stakes, agreed panelist Ray Bodkin, Founder and President, Think Big, Teradata’s services business. If you’re not doing it you’re in danger of falling behind, he cautioned.

There are a number of new surveys that reinforce the changing analytics landscape. Gartner just reported that advanced analytics is a top business priority, fuelled by the need to make advanced analysis accessible to more users and broaden the insight into the business.

“While advanced analytics have existed for over 20 years, has accelerated interest in the market and its position in the business,” said Alexander Linden, research director at Gartner. “Rather than being the domain of a few select groups (for example, marketing, risk), many more business functions now have a legitimate interest in this capability to help foster better decision making and improved business outcomes.”

Gartner breaks analytics down into four categories: Descriptive (what happened); Diagnostic (why did it happen); Predictive (what will happen); and, Prescriptive (what should I do). It stated that advanced analytics is the fastest-growing segment of the business intelligence (BI) and analytics software market, which surpassed $1 billion in 2013.

The No. 1 use case for Big Data initiatives is enhancing customer experience (68% of respondents), reported Gartner. This is the third year customer experience has been a top business problem to address.

Another new survey from Accenture/General Electric states that 84% of enterprises believe Big Data analytics will change  their industries’ competitive landscapes in the next year, and 87% believe they will redefine the competitive landscape of their industries within the next three years. The great majority — 89% — believe that companies that do not adopt a Big Data analytics strategy in the next year risk losing market share and momentum.

The study found many enterprises are investing the majority of their time in analysis (36%), with just 13% using Big Data analytics to predict outcomes, and only 16% using analytics to optimize processes and strategies. Most (73%) companies are already investing more than 20% of their overall technology budget on Big Data analytics, and just over 20% are investing more than 30%, with 76% of executives expecting spending levels to increase.

Although infrastructure was the stated theme of IBM Enterprise2014 earlier this month, analytics was given a lot of attention. “Analytics is what clients need to grow their business,” said Cindy Grossman, VP, Business Analytics & Optimization, IBM Systems & Technology Group. “It’s all about business outcomes.”

STG SVP Tom Rosamilia echoed that thought. Customers have been telling him that they are swimming in data. “I don’t need more information, I need more insight,” they said.

According to the Accenture/General Electric study, it appears to be a case of analyze or die: 74% of enterprises say that their main competitors are already using Big Data analytics to successfully differentiate their competitive strengths with clients, the media, and investors, and a staggering 93% are seeing new competitors in their market using Big Data analytics as a key differentiation strategy. The three biggest challenges to implementing Big Data are: system barriers between departments (36%); security concerns (35%); and consolidation of disparate data and being able to use the resulting data store (29%).

The Teradata panel agreed that culture — organizational alignment — is the biggest analytics road bump. “You have to agree to win,” said McClarin. “Can we work together?”

Implementing the technology is a challenge, but underneath that is the organizational challenge, said Bodkin, “even around changing business as usual.”  To combat that, you have to counteract siloing. “That’s a profound thing and the timing is now.”

While he agreed with the panel that culture is the number one challenge, in a separate interview Teradata CTO Stephen Brobst said there is another critical issue that hasn’t been mentioned, competition. In extremely competitive markets like the North American retail sector, they’re all doing analytics. “When you’re a monopoly you have no incentive to invest.”

Part of the organization challenge are the conflicting agendas of IT and marketing, said Wes Moore, VP Solutions Marketing, Teradata Applications. “Marketing and IT look at things in different ways; IT looks at cost and efficiency; marketing looks at driving revenues and fail fast — or learn fast … how to get the most value out of my data. Organizationally, how do these two entities together get together…

-as they learn to create the better relationship, then there’s more value… and more investment.”

That will change over the near future, but, at least from a marketing perspective, Moore said business analytics is still very immature. That future will include a move to what he calls “individualized insights” that marketers will use to create more personalized engagement. “That means really knowing your customers…taking insights and driving value to that customer.”

Size does matter when it comes to data-driven business analytics, said Brobst. The required costs and skillsets make them impractical for smaller organizations, although there is hope for them.

“You need to have a certain scale to make the investment in analytics,” he said. “What reduces the barrier to entry is the cloud” and analytics as a service.

He said Teradata tends to focus on the Global 5000, most of whom have at least basic reporting in place. “But they don’t have true analytics in place.”

That should change. In the past, data was really the result of business process automation and it was a cost. “Today data is an asset.” Brobst said the economy is being driven by “who makes better decisions with data wins.”

The future, courtesy of the Internet of Things, looks even brighter, from an analytics perspective, he added. The availability of sensor data is exciting.

“I think everything will be sensor enabled. You can’t even imagine the things sensors will be on.”

DISCLAIMER: Teradata looked after airfare and accommodations.

Author: Steve Wexler

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