Competing through analytics

09.08.2006
Business intelligence is defined in many different ways. In most cases

today, it takes the form of either basic reporting or data analysis via

the use of online analytical processing (OLAP) tools. Such tools are

essential in gathering a consolidated view of the business, but in some

cases they serve only a backward looking role, providing the cause and

effect on any given business situation or strategy.

Many argue that businesses increasingly want help in gaining a

forward-looking view of their business and a solid roadmap for future

success.

Ernest Wong, director of professional services at SAS Institute, notes

that using BI in its traditionally understood form of reporting and

analysis tools is comparable to looking in the car mirror to get a

better view of what has passed. The addition of advanced analytics tools

was likened to having the full-front windscreen view of what was coming

towards you, as well as having the mirror for reference. With businesses

increasingly looking for any possible edge over the competition, any

tool that can give them the ability to predict or forecast scenarios is

highly desirable.

During an introduction at a recent CIO panel discussion hosted by SAS

Institute, Wong highlighted a report from the Harvard Business Review in

January 2006.

"Organizations are competing on analytics not just because they can, but

also because they should," the report noted. The report's author, Thomas

H Davenport further added, "At a time when firms in many industries

offer similar products and use comparable technologies, business

processes are among the last remaining points of differentiation...and

analytics competitors wring every last drop of value from those processes."

Wong suggested that good use of analytics will help generate new revenue

opportunities, help save costs and optimize profits as users will find

more accurate data helps improve internal efficiencies and develop

better processes.

CIO challenges

The panel of CIOs, IT managers and an IDC analyst discussed today's

business challenges and the potential role and need for analytics tools.

Raymond Lee, CIO at local logistics firm BALtrans Holdings, noted that

staying competitive in his industry involved simply keeping the

customers happy by delivering on expected service levels and providing

accurate information to them as needed.

He noted that in the past providing the latest information on a delivery

or shipment was very difficult with today's technology providing clear

and accurate data is much easier. Lee noted that BalTrans is a current

user of BI tools which helps the business analyze shipment data to

measure performance of processes and provide historical analysis of

shipment data to establish if processes can be improved or where problem

areas can be addressed.

"Whatever tools we can use to help us move that cargo in a better way

and in a way our customers want is valuable to us," he said.

At Sun Life Financial, the challenge is to stay focused on delivering

customer service in a way that matches the ongoing but changing needs of

people during the whole of their lifetime, said Michael Ma, CIO for Asia

at the financial services company. "Our attention is focused on helping

people with lifetime protection and services that benefit clients at the

right time," added Ma.

Joseph Leung, IT manager of Bio-Informatics Center, Hong Kong & Science

& Tech Parks Corp also noted that provision of better services and

support was the key to competing better in his market. Science Park is a

service provider and supports businesses with infrastructure and office

space. He noted technologies like BI can help the company maximize the

use of resources to provide the best possible service to its tenants.

At Cathay the use of BI tools is currently focused on tracking customer

needs. Two areas in particular has shown how BI is proving useful, noted

Anna Or, CIS & CRM Program, Cathay Pacific Airways. One is that staff

can now profile customers and package services based on specific user

preferences.

Second is being able to recognize each and every customer when they

contact the airline via any channel. "Being able to identify the

customer immediately gives the agent valuable information in serving the

customer in the best possible way," said Or. "Technologies that bring

together the information into a single pool and then help to analyze the

data gives us a clear picture for the customer, from head to toe, and

start to finish of each journey they take with us."

Market heats up

The market for BI tools right now is very active, according to Antony

Lee, market analyst, IDC Asia Pacific. "There is major pickup in BI and

analytics tools, even in mature markets like Hong Kong," said Lee.

The IDC analyst believes that Asia Pacific enterprises are being driven

by three factors to adopt BI and analytics tools. The first: data

intensive industries are facing a need to extract more information with

growing transactions and further business expansion, they need new tools

to help them gather, manage and analyze the growing pools of data.

Second is the rising competitive pressure in markets with a limited

amount of new customers and the constantly changing market conditions

such as the telecom industries. "Even with a team of experienced

business analysts, companies cannot simply rely on their skills and

experience alone to analyze the masses of data to aid the formation of

ongoing business strategy," said Lee. "New technology is a must to help

firms consolidate information and model it to allow for better decision

making and forward planning."

The third factor is the push in the manufacturing space where

globalization has driven firms to become leaner and more efficient.

Industry consolidation has created the challenge to manage multiple

products, multiple markets, more locations and production facilities.

Ensuring products are manufactured at the right time in the most

efficient way and then supplied to the right markets is critical and

firms are demanding ways to conduct forward-looking analysis and

predictive modeling, according to Lee.

Core role

Sun Life's Ma agrees that analytics and similar tools do play a

critical role today in helping his company better tailor products for

its customers. "Today's challenge centers on understanding the customer

better-knowing when they might call, why and what to expect from them,"

he said. "How can we create new opportunities and also improve products

to match the changing needs of the customer?"

At Science Park, analysis is applied to find how competitors such as in

the commercial sector serve their customers. Leung notes that his tools

help identify areas that the company needs to work on to improve its

offering to existing and potential customers.

Ma also noted how the average person today is likely to receive between

five and 20 unsolicited calls a day, and maybe even more junk e-mail.

"All consumers want better and more relevant services, we don't want our

time wasted by unrelated calls-we want tailored pitches and services,"

he stressed. "The more a company understands my needs the more time I

have for that company."

Extending capabilities

"Right from the start we were conscious of customers seeing us as one

company and not separate entities," said Cathay's Or.

Over the last five years, Cathay has tried to ensure that consistent

customer information is always available to agents so they are aware of

the customers' background and profile. "This is not easy because of

information integration challenges and the amount of training for staff

to make use of the information and bringing it all together," said Or.

Wong at SAS also observed that when companies start looking at

analytics, most will start by looking at data readiness and ensuring

it's clean. "Company data must be ready for deeper analysis, but that

process is happening much quicker now," noted Wong.

Many companies still see customers through separate departments which

creates differing profiles of the same customer. "So to enable better

information, to use analytics properly you must first consolidate

customer information to get that single view of data-that's when you are

ready to apply analytics."

Cathay's Or stresses the need for tools such as BI to be pilot-tested

before doing wider rollouts. They should also be built into the business

processes to ensure that the tools are optimized for the business and

not the other way 'round.

Another thing Or noted: as users at Cathay became familiar with certain

BI tools they also found other areas that the tools could be applied to.

"Initially our staff were focused on customer management and how to

handle customer data but later they applied to internal processes to

improve productivity."