Business Analytics and the Nexus of Information

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1 Business Analytics and the Nexus of Information 2 The Impact of the Nexus of Forces 4 From the Gartner Files: Information and the Nexus of Forces: Delivering and Analyzing Data 6 About IBM Business Analytics Introduction Every day, the world creates 2.5 quintillion bytes of data and the pace at which it is being created has escalated to the point that 90 percent of the data in the world today did not exist three years ago. This data comes from everywhere: sensors used to gather climate information, posts to social media sites, digital pictures and videos, purchase transaction records and mobile phone GPS signals to name a few. Several technology trends are key contributors to this explosion of data: The mobile revolution is instantly connecting businesses, consumers and governments. Social media has emerged as a primary means for communication and collaboration. Hyper digitization is a fact of life. What were once mainly analog and paper artifacts (videos, education and forms, for example) are now increasingly being produced in digital formats. Cloud computing has become a practical alternative for providing IT services and storing data. Although the size and velocity of today s data is daunting, it also provides an opportunity to find insights, to make businesses more agile and to answer questions that were previously considered too difficult to address. In Information and the Nexus of Forces: Delivering and Analyzing Data, Gartner states that the confluence of information generated by new technologies and sources will create a nexus of forces that could be even more disruptive than the dot-com and e-business booms of the 1990s. To take advantage of this nexus, companies will need to innovate through information. Featuring research from

2 The Impact of the Nexus of Forces Gartner posits that exploiting the nexus of forces for better business results will be a critical business and IT skill. In addition, companies will need to prioritize the areas of greatest potential impact, adjust IT strategies and adopt emerging technologies and IT capabilities to capitalize on opportunities. The research states that emerging technologies offer a chance to exploit these trends to meet the continual demand for better data for analysis and fact-based decisions. Gartner identifies business analytics and information management as the two IT strategy areas for these technologies. In the area of business analytics, the research identifies content analytics and social analytics as technologies that can provide better access to more varieties of information at lower costs and support new business models that yield competitive advantages. Success, says Gartner, depends on how well organizations respond to their enterprise business intelligence (BI) and analytics needs. Gartner also adds that proper preparation for innovation through information includes three main activities. Enterprises should analyze their business needs and the impact of better information on business outcomes. They should help the business understand what is possible with technologies that analyze new information types. They should then adopt a strategy that includes these technologies. To use business analytics as part of a strategy to exploit the nexus of forces, IBM believes enterprises can combine expanded analysis capabilities (analytical reporting, predictive analytics and statistical analytics) with analytics technologies (for example, customer analytics) to comprehensively analyze the information coming in and make the right decisions as a result. Analytics for traditional and new forms of information Innovation through information includes using analysis capabilities in new ways and exploiting customer analytics. The full spectrum of analysis To meet the growing demand for solutions that analyze traditional and new forms of data, organizations now want analysis solutions that promote self-discovery, provide the ability to manipulate information and use data modeling to create scenarios. These solutions should also span the full spectrum of analysis to include: Analytical reporting. Analytical reporting helps enterprises find the answers to business questions fast with guided report analysis, dashboards, navigable reports and mobile business intelligence. Trend analysis. Trend analysis is used to fully explore data and track business developments with capabilities for tracking patterns and adding them to charts and graphs. What-if analysis. What-if analysis enables enterprises to model scenarios with capabilities for reorganizing, reshaping and recalculating data so you can identify the optimal solutions to business problems. Advanced analytics. With advanced analytics, enterprises can uncover patterns in the business and apply algorithms to BI data to predict outcomes. IBM Cognos Enterprise software includes analysis capabilities that span the spectrum of analysis. With analytical reporting that includes dashboards, navigable reports and mobile BI, it is possible to have at-a-glance views of the business and to go into more detail. Users can sort from top to bottom and back, be guided through to additional relevant reports and analyze data on demand. A common metadata layer helps users ask for more information about anything they see. For example, they can call up the lineage of a piece of information to see where it was sourced from to increase their confidence in that information. Or, if someone is reviewing a report or dashboard about customers who are purchasing less merchandise than usual, they can link to a report of open support requests for a given customer to see if the lack of purchasing is based on an open service issue. This is guided analysis; the system helps people find what they need to know. For trending analysis, Cognos Enterprise includes features for fully exploring data, comparing and contrasting different business areas, analyzing trends over time and rotating and nesting information Business Analytics and the Nexus of Information is published by IBM. Editorial supplied by IBM is independent of Gartner analysis. All Gartner research is 2012 by Gartner, Inc. All rights reserved. All Gartner materials are used with Gartner s permission. The use or publication of Gartner research does not indicate Gartner s endorsement of IBM s products and/or strategies. Reproduction or distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see Guiding Principles on Independence and Objectivity on its website, 2

3 to gain fresh insights. You can also add trends right in your charts and graphs. If you prefer comparing and contrasting information in Microsoft Excel, you can do so with another Cognos Enterprise feature. In addition, anyone involved in analysis can benefit from the ability to add relevant pieces of reports to Microsoft Office applications, such as PowerPoint, and watch them automatically refresh each time they access them. This helps you pool your personal sources with those of other interested users without affecting enterprise data sources so that you can confirm what you are seeing in the trends. To help finance and business users analyze their key performance drivers and use the results of this analysis to make faster and better decisions, Cognos Enterprise includes an analytics server to power what-if analysis solutions. Finance and business users can compare the value and cost of alternative courses of action to the status quo to help build strong business recommendations and make strategy change grounded in facts. In addition, your company can respond more quickly to internal and external business drivers and optimize business performance. And, to provide advanced analysis features, Cognos Enterprise integrates with IBM SPSS predictive analytics and statistics solutions that help uncover patterns in the business and can apply algorithms to BI data to predict outcomes. The foundational technology of these IBM advanced analysis solutions uses sophisticated mathematics to help researchers validate assumptions and test hypotheses. By testing opinions about the latest product feature ideas, the efficacy of a new drug treatment or prospective supply chain allocation, your organization can look at what it believes and validate whether those views are based in fact. In addition, statistics will make you confident in the results and the final outcomes of the decisions you make. Together, the features and solutions of Cognos Enterprise provide the expanded, flexible data analysis businesses need to find the answers to any business question from large, complex and structured datasets. Customer analytics Customer analytics uses customer behavior to determine better ways to satisfy, acquire and retain customers. Customer analytics solutions from IBM minimize the difficulty of understanding what customers want by uncovering hidden insights in customer data. With these insights, businesses can design personalized experiences for their customers to help them win more business and increase customer loyalty. Predictive, smarter and social media analytics help businesses: Identify and target the best customers for marketing. Improve sales forecasting and minimize sales cycles. Predict which customers are at risk of leaving and retain them. Maximize customer lifetime value through personalized up-sell and cross-sell. Customer acquisition uses smarter analytics to attract more valuable customers. Customer lifetime value helps businesses use analytics and BI to design cross-sell and up-sell opportunities. Customer loyalty uses churn management and other analytics techniques to improve loyalty and satisfaction. Social analytics (or social media analytics) uncover customer sentiment dispersed over numerous online sources. Because of the impact social media has on consumer opinions and buying behavior, IBM offers a robust social media analytics solution called IBM Cognos Consumer Insight. Cognos Consumer Insight is an analytics application designed specifically for social media. It uses sophisticated software to assess the volume, sentiment and trends in consumer conversations that span different social media. You can use this information to guide your organization s marketing strategies to be more precise, agile and responsive to consumer demands, allowing you to target or calibrate marketing campaigns to grow market share, enhance reputation and improve customer experience. In addition, marketers can evaluate dimensional relationships between terms to look for trends, such as the affinity between products and media channel a feature currently unique to IBM. They can assess related and relevant topic associations above and beyond an initial search, such as clustering of purchasing preferences around a key word. Using the information and insights uncovered, businesses can design targeted marketing and promotional programs and marketing segmentation that can lead to more sales and greater profitability. Conclusion Are you prepared to take advantage of the nexus of forces? How do you plan to make the most of the terabytes of data your company generates every day? IBM Business Analytics software can help you answer those questions. With a comprehensive, unified portfolio of business intelligence that includes new and expanded analysis capabilities and business analytics solutions that include customer analytics, deep, complex or unstructured data sources are no longer obstacles. People in your company can spot trends, patterns and anomalies, compare what if scenarios and predict potential opportunities to better understand, anticipate and shape business outcomes and innovate through information. Source: IBM 3

4 From the Gartner Files: Information and the Nexus of Forces: Delivering and Analyzing Data Analyze how to adjust your business and IT strategies to take advantage of the ways that new information driven by cloud, social and mobile will be critical to the successful exploitation of the Nexus of Forces. Analysis A new era is emerging in which information will play an increasingly central and critical role in business success and competitive advantage. Advances in technology are creating new types of information from external sources. Data volume, variety and velocity are growing exponentially, lending prominence to the populist term big data. Finally, emerging technology is giving CIOs and other IT leaders the chance to deliver on the longstanding demand from the business for better data with which to support factbased decisions that lead to better business outcomes. However, there is more to the successful exploitation of information by today s organizations than just better analytics and technology. Understanding the sources and nature of these new types of information and how they can lead to better business outcomes will be a critical business and IT skill. Equally important is the ability to prioritize the areas of greatest potential impact, adjust IT strategies, and adopt emerging technologies and IT capabilities to capitalize on opportunities. The growing strategic nature of information Individually, each of these forces is disruptive; however, when taken together, they interact, amplify and accelerate to form a Nexus of Forces that will rival the disruption and magnitude of change caused by the dot-com and e-business boom of the late 1990s. Of particular importance for taking advantage of the Nexus is the enterprise s ability to innovate through information (see Figure 2). New ideas and opportunities represented by these forces are widespread, but they are often confined to specific industries or business domains. Understanding and communicating the art of the possible will spawn creativity that can support new business outcomes. The opportunities that new approaches toward information offer organizations are many and varied, but they FIGURE 1 The Nexus of Forces Social Mobile are all about gaining competitive advantage and exploiting new markets to deliver growth. Transformational is not a word to be used lightly, but there is no doubt that the information revolution in which we are enmeshed will be disruptive to incumbents and transformational in its impact on organizations, processes and jobs across practically all industry sectors, governments and even society itself. These forces serve as primary feeders for the new types of information, exploited by business and resulting in new use cases. Current information infrastructures are poorly positioned to deal with use cases inspired by the flood of data from these external sources. Understanding the new use cases and how to respond to them will be critical to the effective use of these new types of information. The Nexus of Forces Puts Information in the Spotlight Gartner sees the confluence of several high-level forces (see Figure 1) combining to reshape the business and technological landscape during the next five years: Cloud-based business The rise of mobile usage and commerce Growth in the use of social media and casual computing by consumers Cloud Information Source: Gartner (June 2012) 4

5 5 FIGURE 2 Information Innovation Source: Gartner (June 2012) Emerging technologies offer a chance to exploit these trends to meet the business s long-standing demand for better data with which to make fact-based decisions. Content analytics, social analytics, in-memory databases, Hadoop and other technologies can deliver better access to more varieties of information at lower costs, and they can support new business models that yield competitive advantages. Hadoop and MapReduce: Big Data Analytics describes how these new techniques and technologies can rapidly process data (including semistructured information) in parallel on large clusters of computer nodes. Innovation Insight: Invest in In-Memory Computing for Breakthrough Competitive Advantage explores how falling costs associated with memory are enabling radical improvements in performance that are relevant to many analytical challenges. Success requires IT organizations to understand the business requirements for new information and how it can affect measurable business outcomes and help drive innovation. IT should also understand that information demand can quickly outstrip the IT organization s ability to deliver. The increasing volume, variety and velocity of information will overwhelm familiar disciplines for accessing, storing, managing, analyzing, governing, presenting, collaborating on and sharing information. As a result, the IT organization must develop an information strategy to guide its response to business requirements for information. The first step in building an information strategy is understanding how to be an information leader. Two areas that will have a significant impact on IT strategy are business intelligence (BI)/ analytics and information management. In the case of analytics, success depends on the organization s ability to adopt consistently and to respond to the enterprise s BI and analytics needs. Management of the information will also require a consistent model to frame information and information capabilities. Consider These Factors to Determine Your Readiness Innovation through information can give the enterprise an enduring competitive advantage if enterprises properly prepare. Enterprises should: Analyze business needs and the impact of better information on business outcomes Help the business understand what is possible with less-expensive technologies, and technologies that manage and analyze new information types (such as text and video) Revise information disciplines to keep up with the new pace and scope of information demands Create an information strategy to guide continuous improvement Strategic Planning Assumptions Through 2015, 85% of Fortune 500 organizations will be unable to exploit big data for competitive advantage. By 2015, the 20% of enterprises employing social media beyond marketing will lead their industries in revenue growth. At year-end 2016, more than 50% of Global 1000 companies will have stored customer-sensitive data in the public cloud. By 2015, mobile application development projects targeting smartphones and tablets will outnumber native PC projects by a 4:1 ratio. Source: Gartner Research G , Y. Genovese 26 June

6 About IBM Business Analytics IBM Business Analytics software delivers actionable insights decision-makers need to achieve better business performance. IBM offers a comprehensive, unified portfolio of business intelligence, predictive and advanced analytics, financial performance and strategy management, governance, risk and compliance and analytic applications. With IBM software, companies can spot trends, patterns and anomalies, compare what if scenarios, predict potential threats and opportunities, identify and manage key business risks and plan, budget and forecast resources. With these deep analytic capabilities our customers around the world can better understand, anticipate and shape business outcomes. For more information For further information please visit ibm.com/business-analytics. Request a call To request a call or to ask a question, go to ibm.com/businessanalytics/contactus. An IBM representative will respond to your inquiry within two business days. 6

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