How do companies move from databases and BI to pervasive, predictive, actionable analytics? This presentation summarizes research conducted with IBM.

1. Analytic Journeys James Taylor, CEO

2. About me Independent consultant working with clients to help automate and improve decisions Researcher and independent analyst in decision management techniques and decisioning technology 20 years experience in all aspects of software including time in PeopleSoft R&D and at Ernst & Young Blogger, speaker, writer james@decisionmanagementsolutions.com

3. The research The end game The journey Critical success factors Related research Next Steps

4. The One Slide You Need Pervasive, predictive, actionable analytics are the goal of the journey Many companies have BI and predictive analytics on separate tracks There are reasonable steps to take from BI to predictive analytics Build an information platform first but… …keep the decision in mind Don’t forget to operationalize, institutionalize

5. The research ©2009 Decision Management Solutions 5

6. ©2009 Decision Management Solutions 6 The Research Sponsored by IBM Reviewed case studies and interviewed customers Various industries: Telecommunications (customer retention) Retail (consumer marketing) Healthcare Providers (patient care) K-12 Education (student achievement) Government agencies (operations) Banking (customer centricity)

7. ©2009 Decision Management Solutions 7 Publishing as a series of white papers

8. The end game ©2009 Decision Management Solutions 8

9. ©2009 Decision Management Solutions 9 The end game for analytics Pervasive Used in every transaction At the point of contact/delivery In operational decision making Actionable Decisions being made, actions being taken Action-support not decision-support Predictive From reporting to prediction and forecasting Predictive analytics and scoring

10. Telecom Provider Business challenge: 100M customers and 3Bn calls / day 200TB of customer information 1.3M Retail partners Rural and urban consumers, large and small companies Solution: Integrated data warehouse across all channels, all products Real-time analytics for micro-segmentation, offer targeting Web, retail, call-center and mobile channels Benefits: Rapid growth with 2-3M new customers/month Growing and accelerating Revenue Market Share

11. The journey ©2009 Decision Management Solutions 11

12. The journey Platform Delivery

13. Platform - Integration ©2009 Decision Management Solutions 13 Collect and integrate information about Customers Students Products Citizens Have a purpose (Decision) Decision <> original motivation Operational benefits

14. Platform - Understanding ©2009 Decision Management Solutions 14 Analysis and reporting still central Analyzing at the group level Facility School Program Not management/financial reporting New users

15. Platform - Targeting ©2009 Decision Management Solutions 15 Segmentation Group analysis Trends and patterns Analytically focus resources Non-intuitive results

16. K-12 School District Business challenge: Unable provide effective intervention for at-risk students 48% drop-out rate Attendance, test, student data disconnected and out of date Solution: Transform compliance, accountability data into a strategic asset Analytics to identify at risk students Intervene early in time to make a difference Benefits: Proactive alerts when students cross at-risk thresholds Identify which programs are likely to work for each student Reduce costs

17. Delivery - Operationalization ©2009 Decision Management Solutions 17 Integration with operational systems, processes Increased granularity of treatment Increasingly prescriptive Action support not just decision support Infrastructure for differentiated treatments Business rules management

18. Delivery - Prediction ©2009 Decision Management Solutions 18 Looking forward Forecast Predict Calculate propensity Fraud detection, targeting, retention Proactive decision-making Micro-segmentation

19. Delivery - Optimization ©2009 Decision Management Solutions 19 Next Best Action Formal trade-off analysis Personalization, markets of one Pervasive Predictive Actionable

20. Retailer Business challenge: Grocery chains are battling for market share Customer loyalty is essential for growth Loyalty to the brand, not a single store format Solution: Highly tailored promotions integrated with loyalty program Integrated system from back office to point of sale Consistently compelling offers across channels Benefits: Increased revenue Deep knowledge of customers across formats More effective promotional campaigns

21. Critical success factors ©2009 Decision Management Solutions 21

22. ©2009 Decision Management Solutions 22 Critical Success Factors

23. 23 Start by focusing on the value Better decision Analytic insight Derived information Available data

24. 24 Start by focusing on the value Better decision Analytic insight Derived information Available data

25. State department of taxation Business challenge: Paper tax returns increased costs and slowed responses Siloed information systems Manual fraud detection and return review Solution: Single central taxpayer database Sophisticated real-time predictive analytics Benefits: Recovered millions of dollars from questionable tax returns Increased collection of unpaid taxes Decreased number of questionable tax returns Increased customer satisfaction

26. Related research ©2009 Decision Management Solutions 26

27. Some other recent work on analytics Analytics at Work Tom Davenport, Jeanne Harris, Robert Morison Harvard Business School Press More than 100 organizations 28 companies in sponsored research Survey on managing analytical talent Breaking away with business analytics and optimization IBM Institute for Business Value 400 respondents, mostly business executives Characteristics of high performers

28. Ladder of analytical applications Analytics at Work: Smarter Decisions, Better ResultsTom Davenport, Jeanne Harris and Robert Morison

29. Business direction Trusted information 2.4x 2.5x 4.4x 2.4x 2.0x 2.7x Analytical and predictive tools Dashboards and visualization Business rules management Content management Master data management Data integration tools Key: Top performers (i.e., 1st quintile relative to industry peers) Lower performers (i.e., 4th and 5th quintile relative to industry peers) Relative difference of top performers to lower performers Source: Breaking Away with Business Analytics and Optimization: New intelligence meets enterprise operations at www.ibm.com/gbs/intelligent-enterprise. Some differences of high performers

30. Next Steps ©2009 Decision Management Solutions 30

31. Action Plan

32. More information White papers http://www-01.ibm.com/software/data/new-intelligence/ Decision Management Solutions decisionmanagementsolutions.com/learnmore Blog http://jtonedm.com ©2009 Decision Management Solutions 32

33. Blog: www.jtonedm.com