Study: Enterprises Shift Analytics Focus to Back Office

Companies have shifted their analytics efforts from consumer-focused processes to operations, according to the results of a survey released last week byCapgemini.

Seventy percent of 600 executives at companies in the United States, Europe and China said they focused more on operational analysis, and more than 80 percent said analytics in operations plays a pivotal role in driving profits or creating competitive advantage, according to the survey.

Organizations have begun using the improved efficiency and performance of operations resulting from operational analysis to create a better customer experience, Capgemini noted.

For example,Tesco uses its supply chain statistical model, which incorporates various external indexes such as weather, to predict customer behavior and stocks products based on the data, ensuring a 97 percent chance that customers in-store and online are able to buy what they want.

However, only 39 percent of the organizations surveyed have integrated their operational analytics initiatives extensively with their business processes, only 29 percent said they’d achieved the desired objectives from their operational analytics initiatives, and 40 percent reported moderate success.

Only 18 percent — firms Capgemini calls “game changers” — had extensively integrated their analytics initiatives across most business process and adopted a data-driven approach to decision-making.

Why the Shift

“Many firms find that the consumer analytics deliver some value, but it’s the ability to provide the end-to-end operational view that drives greater value today,” said Steve Jones, global vice president for big data at Capgemini.

“In terms of bang for the buck right now, the value is more around operational analytics in most firms,” he told CRM Buyer. “Linking the whole chain, for instance, in the demand-driven supply chain is the ultimate goal for data-driven decision-making firms — but this must be delivered iteratively.”

This doesn’t mean companies are throwing away customer analytics, Jones said.

Instead, “it’s about the road map to be able to drive all decisions in a firm based on accurate analytics and delivering that road map iteratively based on best ROI at each stage,” he noted.

Where the Game Changers Are

Heavy manufacturing is a “massive innovator in this space” as the costs and margins need to be tightly managed, Jones said. Global supply chains are the second key area. In healthcare, collaboration among hospitals, patients, clinicians, pharmaceutical companies and countries needs greater analytical effectiveness.

Meanwhile, automotive and the connected car “are driving a new era of predictive and prescriptive maintenance.,” he said.

The final area is finance, “which is continually looking to improve and optimize the mid- and back offices, particularly around regulatory compliance and cybercrime, areas which are engaged in a technical arms race around analytics,” Jones said.

Getting Better All The Time

Companies always have recognized the value of operational analytics, observed Rebecca Wettemann, VP of research atNucleus Research. “The challenge has been in actually making them operational.”

Analytics toolsets that required experts to implement and tune on an ongoing basis and interpret the results made it difficult for companies, even those with a lot of resources, to use analytics in an operational fashion, she told CRM Buyer.

However, investments that vendors such as IBM have made in operational analytics platforms and usability, and the cloud analytics players that are making the tools more accessible, “are making operational analytics a practical reality,” Wettemann added.

The Other Side of the Issue

“Analyzing operational metrics only gives insight once it’s too late to do something,” argued Denis Pombriant, principal atBeagle Research Group. “Other measures worth considering include revenue and leads per program against costs, time for programs to yield measurable results, and number of marketing-qualified and sales-accepted leads generated per time unit per unit of expenditure.”

Companies can compete on operations — “a kind of low-cost producer niche” — or on personal relationships in a more high-end approach to the market, he told CRM Buyer.

“This wasn’t the way it used to be,” Pombriant mused. “These days the customer base looks more like a two-humped camel — one hump at operational excellence and well-priced adequacy, the other at a more luxurious end.”

Richard Adhikari

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

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