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MANAGED ANALYTICS AN OVERVIEW PRESENTATION 8 th March 2010, The Strand, London
All organizations say that they want to serve their customers better, all organizations claim to have a robust strategy, Many state that they are aiming for market leadership. Very few actually achieve it. The ones that do are the clever ones. They are driven by decisive leadership achieved through a deep understanding of demand for their products and services. They leverage the value of their data assets. They engage and excite their customers by understanding and responding to their value agendas KNOWLEDGE : LEADERSHIP : CHANGE
DATA IS STRATEGIC (IT SHOULD BE RECOGNISED AS A CORE ASSET OF ANY ORGANISATION OR BUSINESS) THE FUNDAMENTAL QUESTIONS ARE WHAT DOES IT TELL US ?, AND HOW DO WE ENABLE THE ORGANISATION TO ACT UPON THOSE INSIGHTS ?
1. SETTING THE CONTEXT: THE NEED AND THE OPPORTUNITY FOR ANALYTICS
Manufacturing Service Support (Distrbn) Sales & Marketing GM Procure IT Finance & Admin FUNCTIONS RANKED BY PROXIMITY TO THE CONSUMER NUMBER (COST) OF EMPLOYEES Current 1980s/90s MA Context & the need for change ….The Challenge …. ACROSS LARGE CORPORATES THE LAST TWENTY YEARS HAS SEEN A SIGNIFICANT SHIFT IN DISTRIBUTION OF MANPOWER AWAY FROM CONSUMERS INTO “BACK OFFICE” FUNCTIONS. Many large companies have “lost touch and sight of” their consumer, becoming increasingly reliant of brand and distributive legacies to sustain revenue streams. The question is how can they address the imbalance?.
FUNCTIONS RANKED BY PROXIMITY TO THE CITIZEN NUMBER (COST) OF EMPLOYEES Current 1980s/90s MA Context & the need for change …. AS A RESULT MANY FACE THE REALITY OF TWO GAPS. THIS IS THE CHALLENGE, THE OPPORTUNITY AND THE NEED FOR CHANGE GAP 1 GAP 2 GAP 1 – Should be understood as the failure of historic investment in technology to deliver expected benefits GAP 2 – Should be understood as the potential shortfall in front end engagement, resulting in product and service provision failing to meet consumers needs, the increasing likely hood of consumer migration (loss), and the opportunity for “new entrants” to exploit those gaps acquiring new consumers .
THE CHANNEL EXPLOSION THE INFORMATION REVOLUTION THE NEW DECISION MAKING HEIRARCHIES In the last decade there has been an exponential growth in the number and significance of both conventional and new media channels, with an accompanying shift to a pull (on demand) rather than a push environment The economics of information have changed. The more information there is to filter the more expensive finding the right information becomes. The central challenge is not to provide more information to consumers, but how to ensure that they get the relevant information in the appropriate format at the right time. There are new and emergent consumer decision making hierarchies. Alongside conventional media advertising and editorial parallel hierarchies are emerging around search and technology enabled word of mouth. When it comes to purchasing decisions these services can provide customers with the most important and relevant information far more efficiently. Characterising market development…. THE WORLD HAS CHANGED - COMPANIES ARE FACING PROFOUND CHALLENGES AND CHANGES IN THE WAY THEY ATTRACT, RETAIN, DEVELOP THEIR CUSTOMERS
• SELLER CENTRIC • * SUPPLY AGENDA • • CONSUMER CENTRIC • * DEMAND AGENDA • 1. 2. <ul><li>These companies believe in the audience paradigm which can be expressed in three simple steps: </li></ul><ul><li>Advertisers (companies) send out messages to consumers </li></ul><ul><li>These messages get (somehow, sometime) into consumers heads (awareness) </li></ul><ul><li>Consumers act on these messages. Some of this results in conversion to purchase. </li></ul><ul><li>These companies believe in the search and filter paradigm which can be expressed in three simple steps: </li></ul><ul><li>Consumers are always searching for better value from a different range of choices at different stages of their consumer lifecycle. </li></ul><ul><li>Consumers shift through the information they come across (proactive & reactive) They keep the bits that help them in their search for value, and discard the rest. </li></ul><ul><li>Consumers act on these on those retained bits of information that they find the most useful and relevant to their needs at act on them when appropriate to their need state. </li></ul>AUDIENCE PARADIGM SEARCH & FILTER PARADIGM Characterising market development…. CONSISTENT WITH SUCH DYNAMICS WE CAN DETERMINE TWO DIVERGENT PARADIGMS THE OLD SCHOOL THE NEW SCHOOL
NEW CO COLLECTS OFFERS ACROSS COMPANIES A TO E, WHO ARE WORKING FROM A SUPPLY AGENDA NEW CO UNDERSTANDS THE SEARCH & FILTER PARADIGM NEW CO GROUPS CONSUMERS AND ACTIVELY ENGAGES IN ACCORDANCE TO THEIR VALUE AGENDAS “ New Entrants” exploit the weakness of “Supply Agenda” Product Manufacturers capturing incremental value that should have been available to them by developing strong relationships (ownership) of their customer base Recent examples of this trend range from the Car Phone Warehouse, to Confused.com & Compare the market.com, to Ocado, Expedia, Nesspresso Club, and Net a Porter (now acquired by Richmont) COMPANIES “MANUFACTURING” SIMILAR OR SUBSTITUTE PRODUCTS RESULT: Falling SVA RESULT: Increasing SVA Characterising market development… ACROSS MOST VERTICALS WE CAN IDENTIFY EXAMPLES WHERE THOSE RESPONDING TO SEARCH & FILTER ARE MAKING SUBSTANTIVE GAINS IN VALUE. COMPANY A “ THE OLD SCHOOL” COMPANY B “ THE OLD SCHOOL” COMPANY C “ THE OLD SCHOOL” COMPANY D “ THE OLD SCHOOL” COMPANY E “ THE OLD SCHOOL”
DATA WAREHOUSE (Focused on Compliance) MANUFACTURING TECHNOLOGY FINANCE GENERAL MGNT PRODUCT MARKETING SALES transaction focused (CRM Systems) BRAND (event occasion) MARKETING SALES Opportunity focused (integrated systems) DATA ANALYTICS (Focused on the consumer) Characterising market development…. SYPMTOMATIC WITH SUCH SITUATIONS ARE LOW LEVELS OF DATA UTILIZATION Realigning the business pulling it into a consumer facing organization MANUFACTURING TECHNOLOGY FINANCE GENERAL MGNT In such cases data is simply stored as evidence of a historic transaction, in other cases it may just be discarded 1. 2. SUCCESSFUL DEPLOYMENT OF ANALYTICS CAN DRIVE REALIGNMENT
MANAGING CUSTOMER DATA INTEGRITY INTELLIGENCE INSIGHT Characterising market development…. BY BRINGING THE RIGHT TOOLS AND COMPETENCIES ORGANIZATIONS CAN START TO ACT ON FACT BASED INSIGHTS Capture Cleanse Suppress Discover Enhance Generate Provide Demonst rate Deliver ANALYZING CUSTOMER DATA APPLYING CUSTOMER DATA
% Change in Shareholder Value (Increase in ROIC) Degree of Customer Focus Market leadership position Industry norm/average Sub standard performers INTEGRITY INTELLIGENCE INSIGHT Embedding Customer Intelligence: Realizing Competitive Advantage Characterising market development…. BY EMBEDDING AN ANALYTICS COMPETENCY COMPANIES CAN START TO MAKE SUBSTANTIVE GAINS IN VALUE (FULFILLING THEIR CONSUMER PROMISE) Demand based strategies driven by solid (fact based) insights derived from actual data create energy, drive practical application, and enable leadership decisiveness. (and they get better – learning as the competence builds!)
Characterising market development…. TO SUMMARIZE THE NEED AND THE OPPORTUNITY FOR ANALYTICS Consumers have been quicker to understand and to adapt to the benefits that technology and new on demand environments can deliver to them Companies and organizations have been slower and in may cases have yet to harness the full potential of consumer centric (demand driven) business models. Traditionally in corporate environments technological transformation has focused on cost and control (systems & servers) Many large companies have “lost touch and sight of” their consumer, becoming over reliant on in bound traffic (brand & distributive legacies) As a result “new entrants” have taken the impetus. Technologically savvy and consumer focused they have taken the lead it developing and realizing new business models These companies have discovered and taken ownership of profit streams that traditionally were available (or could be controlled) by product manufacturers. CONCLUSION Many companies are more aware of the opportunity that analytics may offer in supporting the realignment of the business toward a more demand based operating model.
Characterising market development…. BUT COMPANIES SEEKING TO BECOME CONSUMER CENTRIC AND CAPTURE VALUE FACE A PROBLEM – WHERE TO GO FOR ADVICE Technology Companies delivering “product” solutions Agency Data Management Companies “batch” mining Generalist Consultants “ change” models Strategy Consultants “strategic” frameworks Marketing Services brand strategies Data Sales Companies “external” variables Creative Agencies “image” platforms Consumer Research Companies panel & focus Studies THE GAP
2. ESTABLISHING AN ANALYTICS FRAMEWORK: DISCIPLINES & TOOLS REQUIRED
WHAT IS MANAGED ANALYTICS : AND HOW CAN IT HELP? Managed Analytics enables transformation by delivering fact based decision making through data driven insights. It combines advisory services, advanced quantitative analysis, proprietary algorithms and methods, and actionable strategic frameworks in a way that is focused on the delivery of outcome based action. The major challenge facing companies (organizations) today is that they have the data, but not the insight (or the framework or methodology to act upon it). Managed Analytics bridges this gap by allowing companies to leverage their data assets – with actions centered around the right insight companies can transform and create competitive advantage. It recognizes that at a given time a customer’s needs relate to a customer’s circumstance. A change in those circumstances triggers a change in customer behaviour, which is reflected in demand for different (new) products or services. OUTTURN By determining and tracking those Demand Triggers, and learning how they combine and interact, customer specific needs can be fed to the front end of the organization and acted on in the appropriate way. In this way organizations become demand driven, by being able to understand and respond to a customers needs for product and services at a particular point in time. Rather than needing organizational change to implement the approach, it delivers change across the organization as a result of its implementation.
MA Capabilities…. An Analytics approach does three things - It is consumer focused transformation A DATA AGNOSTIC & BLENDER Provide and utilize over 1,700 external data variables for consumers, 37 for businesses AN INSIGHT GENERATOR & REALIZER We provide a logical and sequential series of software tools, balanced with conventional consumer research processes A BUSINESS ENABLER & TRANSFORMER Provide and embed actionable outcomes that enable enhanced service delivery ( better service delivery for customers at greater efficiency) Managed Analytics delivers rock solid insights that enable actionable outcomes, that generate energy, activation, and leadership decisiveness within the client organization. It drives change from the point of customer interaction A total solution to customer transformation
AND IMPORTANTLY WHAT IT IS NOT An Analytics methodology does not seek to sell a prescriptive “black box” (technology product) to the client on a limited understanding of the business issue. Instead it works with the client to define and understand the business issue and then to bring the appropriate bespoke technology to its complete solution. Use of External Data The approach does deploy external (commercially traded) data variables. At present, there are some 17,000 data variables available from a range of suppliers (utilization subject to limitation in accordance with the Data Protection Act). MA is data (supplier) agnostic: it works with the client to determine which external data sets are most important for the client’s business need. Once this is determined it can advise and support through negotiations on data purchase (ensuring value) and supply. Differentiation versus other suppliers We don’t consider ourselves to be a technology company – that would be too narrow. We consider ourselves unique both in the holistic nature of the disciplines employed and the compelling outcomes we can deliver. The extension of the application into delivery and display of outcomes at the point of need, and the integration of a communications platform further differentiate the “end to end” solution that Managed Analytics offers.
MA Framework …..3 Stages…… The Analytics proposition works with the client to provide, demonstrate and deliver strategic business solutions DETERMINE the Business Case DRIVE delivery of Opportunity EMBED T he Strategic Solution THE MANAGED ANALYTICS PROCESS PROVIDE DEMONSTRATE DELIVER This the Proof of Concept Preliminary Phase which provides the Business case for implementation. It establishes a “working” scorecard, prototype application and workflow This demonstrator secondary phase actively engages with the front end of the organization. By going live and delivering tangible results it facilitates calibration of the application Having proven the case and established credentials, the business is now in a position to “roll out” a scalable solution. The three-step methodology enables fast realization of benefits within minimal disruption to existing systems architecture and ongoing operational processes and workflows. Fit for purpose solutions are realized and delivered as web based applications to the front end of the organization. Results and outcomes are delivered in an easy to understand easy to act on manner that supports and enables change in working practise.
DATA BLENDING (combining) Functional Tasks PROVIDE DEMONSTRATE DELIVER MA Frame work … It involves 5 core and interrelated tasks – the focus is always on quality and applicability of the intelligence DATA MATCHING (External Data Variables) Functional Tasks CAPTURE CLEANSE SUPPRESS CONSULTING SKILLS Organizational Development Financial Analysis (ABC) Competitive Frameworks Strategy Development Operational Improvement