SPSS Predictive Analytics Software (PASW)

Transcription

1 Reference Code: TA001679BIN Publication Date: June 2009 Author: Michael Thompson TECHNOLOGY AUDIT SPSS Predictive Analytics Software (PASW) SPSS, Inc. BUTLER GROUP VIEW ABSTRACT SPSS, Inc. s Predictive Analytics Software (PASW) helps organisations drive the widespread use of data in decision making. SPSS PASW allows organisations to better understand and predict future customer behaviour by analysing, modelling, and scoring demographic data (attributes) and transactional data (actions) from operational systems, as well as attitudinal data (attitudes) gathered through customer feedback and surveys. Organisations that incorporate Predictive Analytics across their enterprises and into daily operations can change operational process dynamically in real time to enhance decision making. SPSS offers a full suite of Predictive Analytics products (statistical, data mining, and enterprise feedback management) and enterprise solutions that give organisations forward visibility for decisions made every day. SPSS technology encapsulates advanced mathematical and statistical expertise to extract predictive knowledge that, when deployed into existing processes, makes them adaptive to improve outcomes. KEY FINDINGS Supports and manages the complete analytical process. Uses attitudinal data to improve analytical decision making. A wide-ranging and fully integrated product set that can be deployed in a modular fashion. Has been in the Predictive Analytics market for over 40 years. Is completely technology agnostic through implementation of SOA. A proven ROI model within many vertical markets. Does not have a completely hosted or Software-as-a-Service (SaaS) solution. SPSS, Inc. provides a detailed deployment methodology. LOOK AHEAD Not surprisingly, given the length of time SPSS, Inc. has been in the market, the major emphasis is on maintaining strong analytical models. Butler Group. This Technology Audit is a licensed product and is not to be photocopied Page 1

2 FUNCTIONALITY Product Analysis SPSS, Inc. s Predictive Analytics Software (PASW) helps organisations drive the widespread use of data in decision making. PASW allows organisations to better understand and predict future customer behaviour by analysing, modelling, and scoring demographic data (attributes) and transactional data (actions) from operational systems, as well as attitudinal data (attitudes) gathered through customer feedback and surveys. Organisations that incorporate Predictive Analytics across their enterprises and into daily operations can change business processes dynamically, in real time, to enhance decision making and begin the journey to become a Predictive Enterprise. SPSS offers a full suite of Predictive Analytics products (statistical, data mining, and enterprise feedback management) and enterprise solutions that give organisations forward visibility for decisions made every day. SPSS technology encapsulates advanced mathematical and statistical expertise to extract predictive knowledge that when deployed into existing processes makes them adaptive to improve outcomes. SPSS splits its offerings into four distinct but related areas, using an integrated platform approach to ensure that the solutions can build into a fully extensible analytical system: Data collection - which delivers an accurate view of customer attitudes and opinions. Modelling - that brings repeatability to ongoing decision making. Statistics to drive confidence in results and decisions. Deployment - maximises the impact of analytics in a company s operation. Although not limited to customer-based analytical solutions, such as customer acquisition, cross-selling and retention, etc., this is a major use of the PASW solutions especially when one considers the attitudinal aspect of the offering. It is the full end-to-end aspect, that SPSS details as Capture Predict Act, which helps differentiate it from other solutions. Again, the integrated nature of the solution comes to the fore here, which has advantages over disparate tools that need to be integrated. Organisations can develop in-depth customer understanding by using all customer information together: both traditional structured data and unstructured data such as call-centre notes, responses to open-ended survey questions, and Web logs. PASW offers a complete software portfolio for data mining, text mining, Web mining, enterprise feedback management (surveying), and statistical analysis. Such a comprehensive solution requires structured deployment, and SPSS provides this with a detailed methodology for deploying Predictive Analytics across the enterprise, which uses an incremental approach of bringing together analytics, architecture, and business processes. This latter point is worth further consideration. Butler Group has long held that the use of analytics within business processes will form a strong differentiator for many organisations. Although most Business Process Management Systems (BPMSs) have analytical capabilities (for instance to tune up existing processes or report on specific activities, allowing users to be ultra reactive), few (if any) could provide the depth and breadth that is available with the PASW solutions. This is hardly surprising as the latter is a dedicated system. However, when one comes to consider how the use of analytical data can be incorporated into running processes to modify their behaviour then one can see how PASW could be incorporated into a BPM solution to provide a truly proactive and predictive solution. Butler Group. This Technology Audit is a licensed product and is not to be photocopied Page 2

3 As Predictive Analytics becomes an integral and automated part of operational business processes, procedures are likely to change too, as organisations begin to fully benefit from the solution. Decision making will be streamlined and supported by automated recommendations, which will result in improved quality and efficiency. For instance, when deploying Predictive Analytics in any real-time environment such as the call centre, the Web site, or the branch office, the software will automatically generate recommendations for the customer-facing agent which will anticipate customer behaviour and advise on the most appropriate action to take with that particular customer at that particular moment. This does not mean that users will lose control over their actions, but it will actually strongly assist them in taking the right decisions based on all available information in the shortest possible time, thus speeding up decision processes considerably. That is the overall benefit of implementing Predictive Analytics Software across the enterprise: it improves business processes by making more decisions data driven, and delivers recommended actions on demand to the people and systems that can take effective action. Product Operation SPSS has a platform-centric portfolio. The platform embraces all of the capabilities and services needed to implement the Predictive Enterprise. It provides the open, granular, technical foundation to evolve an organisation regardless of the starting point to broader, deeper enterprise Predictive Analytics solutions. Figure 1: Architectural Overview Source: SPSS, Inc. D A T A M O N I T O R Butler Group. This Technology Audit is a licensed product and is not to be photocopied Page 3

4 The technology can be used for very large data volumes (according to SPSS some customers are scoring several billion records per day), for channels requiring high performance such as the call centre and the Web (again with some customers scoring hundreds of thousands of customers per hour), and in complex IT environments. The software is typically used by medium-sized and large organisations in data-rich industries (often in Business to Consumer (B2C), with large numbers of customers), which have, or want to have, a direct, one-to-one relationship with their customers. SPSS has also patented specific analytics and deployment capabilities such as Pass (ability to build a model by passing the data once) Stream (ability to update an existing model using a stream of new data) Merge (combining existing models into one model), which is aimed at considerably accelerating the deployment of analytics within business processes. SPSS solutions do not replace previously made investments, but instead rely on the existing environment and system management policies to handle fault tolerance, and this underlying technology agnosticism is carried out throughout all the solutions utilising a Service Oriented Architecture (SOA). Product Emphasis Although clearly rooted in ensuring strong customer interactions to achieve business goals, the solutions are not limited to this. With a large number of proprietary algorithms, the analytical capabilities have been used successfully in several industries and have been instrumental in analysing large data volumes; for example, finding cures for diseases and improving medical treatment, micro-targeting potential voters in political campaigns, identifying delinquent tax payers, predicting equipment failures, improving inventory management, detecting fraud and predicting crime to name a few applications. DEPLOYMENT SPSS has an extensive Global Services organisation with expert consultants including statisticians, data miners, project managers, implementation experts, and Web technologists, with experience in high-profile corporate and public-sector organisations. SPSS can supply the (Technical) Consultant(s) and a Project Manager for the implementation, or these services can be provided by third-party Systems Integrators (SIs); SPSS has partnership agreements with all leading SIs. At the customer organisation, an implementation typically requires involvement from users with specific organisational expertise in one or more of the following: Marketing intelligence. Database marketing. Data analysis. Additional user support is also required from business management and IT departments. Deployment across the enterprise has a business face and an IT face; planning and implementation require multiple skill sets and support from multiple roles both inside SPSS and from the customer side. Figure 2 gives a graphical representation of the areas that require covering for a successful deployment, which typically takes between three and six months (although this is highly dependent on the scope of the project and the preparedness of the implementing organisation). Butler Group. This Technology Audit is a licensed product and is not to be photocopied Page 4

5 SPSS stresses convergence as the key principle for successful enterprise deployment of Predictive Analytics. This refers to the intersection of analytics, architecture and business process; maximum value is obtained by deploying analytics to directly improve business processes, integrated with the operational systems that support them. SPSS follows an enterprise methodology that puts planning at the forefront of implementation. SPSS sees that the basic principle of deploying PASW and becoming a Predictive Enterprise, is to implement the technology in phases and follow a modular approach. Companies typically start with a well-defined and smaller-scale project (e.g., modelling customer behaviour to improve cross-sell marketing campaigns), and will in the next phases expand the use of PASW for broader use in the organisation such as different channels (e.g., the call centre or the Internet) or different purposes (e.g., reducing fraud or risk). SPSS methodology balances quick wins and incremental ROI with progress towards full infrastructural adoption of Predictive Analytics. Figure 2: The Predictive Enterprise Source: SPSS, Inc. D A T A M O N I T O R Once implemented there is very limited overhead required for administration. The software is running within existing business processes and in the existing infrastructure. It can be used by expert analysts as well as business users. Additionally, limited resources from IT are needed for backup and system management. SPSS provides a comprehensive range of classroom and Web-based training. Classroom training is usually provided at SPSS, though can also be held on site at the customer organisation, when requested. This can include technical training for the more advanced power user, business training for the users with less analytical/statistical skills, customised training, in-depth workshops, or technical training for system management. The required training course(s) naturally depend(s) on the product and project. PASW is completely technology agnostic. Integration into the underlying technical infrastructure is nonintrusive due to its SOA nature. Butler Group. This Technology Audit is a licensed product and is not to be photocopied Page 5

6 PRODUCT STRATEGY PASW has both a vertical and horizontal impact. Key target verticals are: Financial Services and Insurance. Retail. Telecommunications. Travel & Leisure. Education/Academic. Government. Healthcare. Charities. ROI is an important consideration for any new deployment, and in this respect the PASW solution scores well with the expected ROI achieved within the first year of deploying the software. Nucleus Research undertook an independent and impartial ROI analysis for PASW implementations, and the findings are impressive. Nucleus Research found that 94% of SPSS customers achieved a positive ROI with an average payback period of 10.7 months, over 90% of users attributed an increase in productivity to SPSS, and 81% of projects were deployed on time with 75% on or under budget. They also found that Text Analytics from SPSS could reduce customer churn by more than 50% when properly implemented as part of an overall customer satisfaction strategy. Furthermore they found that text mining functionality increased analyst productivity also by up to 50%. Perhaps the most impressive figures came from FBTO, a Dutch insurance company, where it was calculated the software enabled it to significantly reduce its promotional mailings while increasing customer conversions. ROI was 448%, with payback in 2.6 months. All this research was carried out between 2005 and SPSS sees a key market opportunity in this time of economic uncertainty by streamlining business processes to find new revenue and decrease costs, with some specifics being: Reduction of marketing spend whilst increasing campaign profitability. Reduction of CRM expenditure, but still growing customer value. Increasing efficiency with reduced resources. Reducing churn whilst cutting associated costs. Streamlining claims processes whilst reaching higher levels of fraud detection. Reduction of fraud losses with fewer resources. SPSS operates a dual market strategy utilising both direct and channel sales. It operates a field sales team for strategic accounts alongside an inside sales operation for core accounts. In addition, it has about 50 franchises and/or distributors worldwide. In order to extend its global presence it also has a strong partner network. SPSS has key business and technology partnerships with leading vendors such as SAP, IBM, Oracle, Microsoft, Language Weaver, CallMiner, MicroStrategy, HP, Netezza, Teradata, and Accenture among others. Butler Group. This Technology Audit is a licensed product and is not to be photocopied Page 6

7 SPSS offers a perpetual (permanent licence) and an annual licence model, and pricing for licences and implementation depends on the actual implementation. On the user level, it offers pricing for both concurrent and named users. The cost of annual maintenance and support is 20% of the net deal size. Owners of registered products who purchase a Support Maintenance Plan get the following support: Unlimited telephone support with trained personnel (during local business hours). Telephone response within four business hours. Free patch downloads and free product upgrades. Standard, proactive notifications. Online problem status. Beta Program eligibility. Unlimited problem submissions (via Web or ). Web database (with text search). User forums. Frequently used resolutions. Each PASW product has its own release strategy. Generally speaking, there will be one major release for each of the products per year, with several minor releases or updates following throughout the year. COMPANY PROFILE SPSS, Inc. is a public company (NASDAQ:SPSS) founded in 1968 and headquartered in Chicago, Illinois in the United States. The company has 17 direct offices worldwide, as well as an international network of approximately 50 franchises and/or distributors covering nearly 90 countries, which offer SPSS software and solutions, technical support, training, and consulting services to expand the global reach in emerging markets. SPSS was formed out of the need to quickly analyse volumes of survey data gathered through various methods of research. SPSS technology, from its early beginnings, has enabled organisations to learn from the past, understand what is happening today, and anticipate the future and change outcomes. From the inception of the company 40 years ago to today, SPSS has always been focused on people data. The software was originally created to conduct a study into political polling and voting behaviour prior to the 1968 US Presidential Election - the founders were trying to predict the outcome of the election based on statistical models. Over the years, the company has expanded its capabilities and enhanced its software functionality, but the focus has always been on people data. As of 31 December 2008, SPSS had 1,203 full-time employees worldwide (590 in the US and 613 internationally). Of these 1,203 employees, there were 534 in sales, marketing, and professional services, 456 in research and development, and 213 in general and administrative. Some of SPSS clients include: Cablecom, a Swiss cable television operator. Tesco Mobile, a UK Telco provider. Butler Group. This Technology Audit is a licensed product and is not to be photocopied Page 7

8 Kingfisher Group plc, the third largest DIY retailer in the world. Infinity Property and Casualty Corporation, a national car insurance provider in the US. KPN Mobile, the leading Telco provider in the Netherlands. The company has more than 250,000 customers, with 95% of the FORTUNE 1000 companies, the top ten global commercial banks, eight of the top ten telecommunication services companies, 21 of the top 25 retailers worldwide, 24 of the top 25 market research firms, all major national governments, every branch of the US military, and every US state government, and is the number one statistical software on university campuses. SUMMARY Clearly, analytics is an important weapon in the battle to keep customers satisfied and to attract new clients. The major issue that Butler Group sees is that by implementing point solutions which address a single specific area the ROI is reduced and the functionality is less than optimal. As one example, most BPM solutions incorporate elements of analysis within their products, but these fall far short of the capabilities of a dedicated solution such as offered by SPSS. By having the integrated capabilities from data capture through modelling and statistical analysis all the way to deployment, organisations can start to really become predictive enterprises and enhance decision making to build profitable customer relationships. As SPSS products are marketed and used as Predictive Analytics Software, the underlying power has to come from the algorithms used, and the only real test of these comes in real-world implementations. In this respect SPSS, Inc. has any number of proven implementations. This, alongside the fact that it has operated in the Predictive Analytics market for over 40 years, makes it a solution that should come under serious consideration. Table 1: Contact Details SPSS, Inc. 233 S. Wacker Drive, 11 th Floor Chicago, IL USA Tel: +1 (312) Fax: +1 (312) sales@spss.com SPSS UK Ltd 1 st Floor, St. Andrew s House West Street, Woking, Surrey GU21 6EB, UK Tel: +44 (0) Fax: +44 (0) Source: SPSS, Inc. D A T A M O N I T O R Headquarters Shirethorn House, 37/43 Prospect Street, Kingston upon Hull, HU2 8PX, UK Tel: +44 (0) Fax: +44 (0) For Butler Gr Butler Direct Pty Ltd. Level 46, Citigroup Building, 2 Park Street, Sydney, NSW, 2000, Australia Tel: + 61 (02) Fax: + 61 (02) Butler Group 245 Fifth Avenue, 4th Floor, New York, NY 10016, USA Tel: Fax: more information on Butler Group s Subscription Services please contact one of the local offices above. Important Notice This report contains data and information upto-date and correct to the best of our knowledge at the time of preparation. The data and information comes from a variety of sources outside our direct control, therefore Butler Direct Limited cannot give any guarantees relating to the content of this report. Ultimate responsibility for all interpretations of, and use of, data, information and commentary in this report remains with you. Butler Direct Limited will not be liable for any interpretations or decisions made by you. oup. This Technology Audit is a licensed product and is not to be photocopied Page 8