Gartner research director Lisa Kart believes true analytic businesses are concerned with more than just transaction data.
Instead, they use correlations and patterns from disparate, linked data sources to yield the greatest insights and transformative opportunities
“The biggest opportunities are with connecting the data you already have,” she says. For example, getting a cross channel view of your customer means digging deeper and connecting the silos together to transform the data into something consumable.
Kart points to a lack of direction in data collection as the first barrier to analytics in many organisations. Even when people know where to find data, they often don’t know what to do with it once they have it, she said. Data often gets siloed and becomes “dark” data. Their data strategy is not tied to the business problems they are trying to solve.
Gartner identifies four main types of business analytics: descriptive (what is happening), diagnostic (why did it happen), predictive (what will happen) and prescriptive (how can we make it happen). These things need to be used together.
“Think of them as your analytics portfolio,” says Kart.
The first step in transforming data is tying it to an actual business need. People tend to get overwhelmed by all the hype around big data. The real question they need to be asking is ‘what is your business trying to accomplish? Are you looking to improve marketing, lower risk, make operational changes, or increase revenue?’.
Gartner predicts that by 2020, 50% of organisations will actively measure and assess return on analytics initiatives, so it will pay to know exactly what you are measuring.
Kart said it’s time for organisations to move “from using business analytics to being an analytics business”. Here are some examples of analytic businesses that you can emulate.
Marketing departments are using analytics to engage and interact with their customers.
International fashion house Burberry used analytics to create a high end, in-store customer experience that gave customers greater intimacy and interaction. They leveraged and analysed data from customer purchases, surveys and social media and used the information to identify and greet their customers when they walked in the store.
“Burberry was able to blend the in-store and online experience for their customers,” says Kart.
Australian bank Westpac launched its “Know Me” programme to engage with customers. Capturing data activity from 12-million customers, including web browsing history, ATM usage and even calls to the bank, Westpac was able to actively engage their customers.
The services were so personalised that ATMs would recommend a list of ATMs closer to the customer’s home or work that didn’t charge fees. As a result, Westpac’s customer engagement score grew from less than 1% to more than 25%.
Operations and finance departments are improving performance using analytics.
Coca-Cola is squeezing every drop of data to ensure they provide product consistency. “Many people think Coca-Cola’s best kept secret is their formula for Coke. It’s actually the formula for their Minute Maid orange juice,” Kart says.
The company detected inconsistencies in the juice due to variations in orange crops, sourcing and seasonality.
“Using satellite images, weather patterns, expected crop yields and even variables in flavour such as acidity and sweetness, Coca-Cola was able to fine-tune their formula to such a point that they could respond and change within five to 10 minutes of a hurricane or frost.”
Mexican oil refinery Pemex needed to reduce the time lost on unplanned maintenance. The company monitored water levels, pressure, temperature, flow, PH and conductivity, and used chemical analysis to calculate the efficiency of the cooling towers.
“In speaking to employees, they discovered that many of the parts emitted a noise right before they stopped working. Pemex installed sensors on those parts that carefully monitored vibrations and alerted maintenance before a breakdown occurred. It saved the company 960 hours per year in maintenance.”
Companies are also using analytics to innovate.
Analytics can help drive business forward, but it’s up to the individual to use the available data to create new business opportunities. Putting data in the hands of all employees allows innovation to occur.
