CASRO Annual Conference October 12 2010 Pacemaker: How Data Analysis and Synthesis Manages the Lifeblood of Business Deepak Advani VP Predictive Analytics, IBM Editable Text Editable Text Editable Text Business Analytics software
The world is changing, enabling organizations to make faster, better-informed decisions INSTRUMENTED Instrumented INTERCONNECTED Interconnected INTELLIGENT Intelligent This is an opportunity to develop a new kind of intelligence on a Smarter Planet. 2
With this change comes an explosion in information Yet organizations are operating with blind spots Volume of Digital Data Lack of Insight 1 in 3 managers frequently make critical decisions without the information they need Inefficient Access 1 in 2 don t have access to the information across their organization needed to do their jobs Variety of Information Inability to Predict 3 in 4 business leaders say more predictive information would drive better decisions Velocity of Decision Making Source: IBM Institute for Business Value 3
On a Smarter Planet, new business challenges and conditions have placed a renewed urgency on business analytics and optimization Traditional Approach New Approach Volume Lack of Insight Velocity Inefficient Access Sense and respond Instinct and intuition Skilled analytics experts Predict and act Real-time, fact-driven Everyone Inability to Predict Variety Back office Automated Point of impact Optimized 4
July 28, 2009, Headline News.. IBM acquire SPSS Inc,a leader in predictive analytics and statistics 40+ year heritage, 1300 employees with a single aim: Optimize outcomes through Predictive Analytics Strong Customer Base 22 of the top 24 global banks 18 of the top 22 telecommunication companies 11 of the top 12 US specialty retailers 24 of the top 25 global market research firms Top 26 P&C and domestic life and health insurance companies Top 12 global pharmaceutical companies 5
SPSS software and solutions enable customers to predict future events and proactively act upon that insight to drive better business outcomes Capture Predict Act Data Collection Text Mining Data Statistics Mining Platform Deployment Technologies Pre-built Content Attract Up-sell Retain 6 Page 6
SPSS Customer Examples Smarter Environmental Protection Marwell Wildlife prevents the extinction of an endangered species - understand the main threats against the Grevy s zebra - introduced surveys to understand critical ecosystem interactions threatening zebra s survival in the wild - implemented survival conservation measures Smarter Law Enforcement The City of Richmond Police Department prevents crime before it happens - optimized deployment of police forces - lowered homicides by 35% year over year - robberies down by 20%. Smarter Healthcare Sequoia Hospital reaches record survival rates - reduced mortality rate for cardiac surgery to 1.7% in 2008 from 3.8% in 2003. - best record nationally for survival from valve replacement over the past six consecutive years. - reduced doctors diagnostics requests from several weeks to near real-time speed. Smarter Insurance Infinity Insurance dramatically reduced the cost of claims - reduced time to refer suspicious claims for investigation from 14 days to under 24 hours. - achieved an ROI of 403% (payback in 3 months). 7
Getting closer to the customer is THE Top Priority Dimensions to focus on over the next 5 years Getting closer to customers Getting closer to customer People skills Insight and intelligence 88% 81% 76% 83% 95% 14 % more Enterprise model changes Risk management Industry model changes Revenue model changes 57% 55% 54% 51% To surprise customers requires unexpected ideas through interactions of people with diverse perspectives. Shukuo Ishikawa President and CEO, Representative Director, NAMCO BANDAI Holdings, Inc. Japan Others Standouts Our customers want personalization of services and products. It is all about the market of one. Tony Tyler CEO, Cathay Pacific Airways, Hong Kong Source: Q13 Which of the following dimensions will you focus on more to realize your strategy in the new economic environment over the next 5 years? n=1,523, n=303 Source: IBM s 2010 Global CEO Study Capitalizing on Complexity (1,541 CEOs, 60 nations, 33 industries) 8
Reaching Customers at the Moments That Most Influence Their Purchases Source: Mckinsey Quarterly 2009 Number 3 Consumer decision journey 9
The Shift in Customer Power
Customers are the New Intellectual Property (Keep the promise) Customer Intimacy (Make the promise) Product Leadership (Deliver the promise) Operational Excellence 11
Beyond 1 to 1 Marketing is replacing Mass Marketing Influencer Consumer User Participant Which One Is it? Customer Comedian (MySpace) VP (IBM) Netizen (Second Life) Apocalypto (WoW) Chef (Amazon) Friends & Family 12
The End of the Averaged Customer 78% Of consumers trust other consumers versus 13% for mobile text ads and 63% for newspaper ads
Customer Experience Management Framework Brand/Reputation Marketing Social Intelligence Dialog Research Product Selection Loyalty/Advocacy Advocate Product Up/Cross Sold Extension Purchase Product Acquisition Quality Sales Feedback Feedback Management Get Customer Service Use Product Retention 14 CEM Main measure groups Support Customer Satisfaction Support/Services
Customer Experience Management Framework Marketing Social Intelligence Research Product Advocate Product Up/Cross Sold Purchase Product Feedback Management Get Customer Service Use Product Support/Services 15
Attitudinal Quantify and Monitor Social Medias Business Analytics Leading Promoters Interactions Social Leaders Leading Detractors Online Surveys Descriptive Scoring against Social Leader levels Scoring for propensity to buy Behavior Execute Campaigns Predict and monitor ROI Points of 16 Interactions Special offers for Social Leaders Viral marketing offers to customer
This reliance on insight is a huge OPPORTUNITY for the Market Research Industry Harness ALL data types Moving towards continuous engagement rather than adhoc research Help clients make sense of all the data and build the bigger picture Delivering Insight and Foresight Provide Strategic and Actionable insight! MARKET RESEARCH INDUSRTY = THE STRATEGIC INSIGHT PARTNER! 17
Making the leap: Strong Data Foundation You Already have Understand and report on what people, think and do Data and insight expertise Objectivity Methodology Trusted data partner Extend this with.. Delivery of Insight and Foresight Holistic approach to data 18
Making the leap: Expertise You already have Strong people skills Professional staff Working with end clients Analytical experts Data experts Creative and inspired individuals Extend this with Modeling and Predictive analytics Access to more data Advice on strategy and execution 19
"The rate of change is not going to slow down anytime soon. If anything, competition in most industries will probably speed up even more in the next few decades." John P. Kotter Leading Change 20