Organizations have massive amounts of data at their disposal, yet they often fail to utilize it in any meaningful way. But analytics is enabling many firms to aggressively use their data in key business processes with impressive results. You have more information at hand about your business than ever before, but if you aren’t using it to outthink your rivals you are missing out on a unique competitive tool.
The "Competing on Analytics" panel at The Premier Business Leadership Series today discussed how to effectively deploy analytics in daily operations, put the right assets in place, understand what analytical leaders do, and manage and coordinate data, people and technology at an enterprise level. Panelists included David Eisendrath from Harrah’s Entertainment, Joe Megibow from Expedia, Gary King from Chico’s and Thomas H Davenport, Author, President’s Distinguished Professor at Babson College and Co-Founder of the International Institute for Analytics. Carl Farrell from SAS was the panel host.
As an online business, Expedia has no shortage of data and, as Joe Megibow of Expedia explained, it is a great resource for optimizing their business. For example, they can optimize the sort order of results to a customer’s search for hotels using "to the minute" analysis, and that has resulted in more sales. They can also analyze the way customers interact with their Web site, and in one case of resolving one simple design glitch resulted in millions of dollars incremental revenue.
Fashion retailer Chico’s use business analytics to maintain a 360-degree view of their customer across their portfolio of brands. In what Gary King of Chico’s calls "crossover analysis" they can serve their customers’ needs better by helping them make purchasing decisions for all their ranges, not just those within a single brand. Perhaps just as importantly, Chico’s can use this same information to align and optimize their business.
Optimal allocation of resources and attention was also picked up by Gary King of Harrah’s Entertainment; for the casino it’s about providing a great customer experience that is both effective and efficient in driving revenue. In essence, Harrah’s has developed a sophisticated capability to treat different customers differently – vital when managing as many properties and offers as Harrah’s. Respected author, Tom Davenport went even further, explaining how business analytics can help a business address both the problems they can see and those they can’t. As Davenport said, "those unseen problems hold new opportunities to innnovate." But, he pointed out: "Too often businesses are focusing on dealing with the known challenges to spend time looking for new ones." I believe that this is a crucial point for business in the current climate. We all have to become better at looking for new opportunities and finding further competitive differentiation.
Discussing social media, all the panelists were aware of its contribution as a source of insight but Gary King from Chico's went further. He sees social media as "just another channel in the marketing mix’"and a way to engage the customer in a dialogue. Gary said that by analyzing all the data available to Chico’s they can also engage with those commentators who are most influential and have the greatest potential impact on their brand. Tom Davenport echoed the sentiment about social media as just another channel but encouraged the audience to take the integration even further by merging the data from that channel with the data from the other channels and analyzing it all together.
David Eisendrath addressed the thorny issue of how to attract, train and retain analytics talent. As well as going to the ‘usual places’ to find recruits, he said you should be thinking about what you want your analysts to do before you even start the recruitment process. Another key tip was to be open to recruiting from within your organization. There are likely to some members of staff who, although not obvious candidates, can bring a wealth of knowledge and experience to the role of analyst. Joe Megibow from Expedia also noted that you have to offer analysts the opportunity to "build something" to see their work turned into concrete results.
When working with the C-suite, having one set of believable data that all the people can work from can build rapport with executives. In the experience of Gary, there is a growing cadre of executives who now demand and expect good quality analysis to support decision-making (although there are still a few hold-outs who need to be convinced). Anticipating a point that will be made later in the session, he suggested that you need to be able to tell a story that illustrates the value analytics brings when solving real-life problems.
According to Tom, the education system is partly to blame for the lack of business-savvy analysts. In his view, courses on analytics have historically been too narrow in focus and in the future need to broaden the curriculum to include business knowledge and communications skills. Tom says that "we need to be able to tell stories with data." However, he also said that business has a role to play in offering challenging and rewarding career opportunities for potential analysts.
Addressing a question from the floor, Joe said that, in order to address concerns about the role and function of analytics within a business you need to be "totally transparent about your data and facts – good and bad." He also said to engage analytics early – before too much has been committed – and to continue analyzing throughout the project. Gary also recommended using all the methods that are employed by change managers: be direct, be stealthy, be whatever you need to be to get the job done. Tom agrees and adds ‘it is not just about the math, it’s also about the relationships’.
As a marketer, I completely agreed with Gary’s comments about letting the customer control the dialogue. In his words, “The customer should be able to opt-up and opt-down, as well as opt-in and opt-out.” When the customer is in control of the dialogue, they also have a larger role and stake in managing their experience. Analytics provides the insights into what options and methods to make available for that customer.
Finally, the panel shared what is making them excited right now. For Joe at Expedia it’s the ability to bring together so many disparate sources of data for analysis. For Gary at Chico's it’s the raw processing power that now allows analysts to hold data in memory and do real time analysis and optimization. And for Tom it’s the potential of business analytics to make a difference. He cited healthcare as being an excellent example of a sector that’s ripe for innovation. Indeed analytics will be vital for building effective and sustainable healthcare in the future.