How to dilute the value of analytics

Business Intelligence (BI) can mean many things to many people, but generally BI is associated with business reports. When you fold business analytics (BA), especially advanced analytics that are predictive or prescriptive, under the BI umbrella you inherently dilute the value proposition that analytics can provide to an organization.

Why is this important? Because everyone knows analytics is hot, so everyone today is selling some kind of analytics. When we allow business analytics to be synonymous with BI, we allow everyone's claims that they can "do analytics" appear to ring true.

Let's look at some typical BI terms and measurements:

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What is a better decision worth?

loginThe word “analytics” is widely misused and misunderstood.  While SAS arguably invented the advanced analytics and predictive analytics categories more than 38 years ago, other software vendors have used the term to describe things like reporting, monitoring, and tracking what happened.  The value of these more simple capabilities are easily understood and quantified – learning what is happening in near real time helps corrective action – reducing cost or increasing profitability. Knowing what happened historically can help plan resource needs and project profitability – thus optimizing the cost of doing business. 

Advanced and predictive analytics, however, tell a brand new value story. These technologies help answer the questions of “What is likely to happen?” and “What is the best thing that can happen?”  But, how do you communicate the value of making better decisions?

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Series: BCBS 239 - Principle 14

Principle 14Principle 14:
Home and host cooperation - Supervisors should cooperate with relevant supervisors in other jurisdictions regarding the supervision and review of the Principles, and the implementation of any remedial action if necessary.

The financial crisis underscored the importance of data quality and data latency in the area of risk management. Regulators were quick to react by enacting regulations around data quality in most jurisdictions. For example, US regulators enacted the Comprehensive Capital Analysis and Review (CCAR) monthly and quarterly data reporting and the regulators in Europe enacted changes to the capital requirements directive (CRD) and capital requirements regulation (CRR).  The BCBS 239 principles (see SAS’ series on the Principles of BCBS 239) can provide an overarching framework for many of these regulations from a risk data perspective. However, a key factor for success is appropriate cooperation between home and host regulators.

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Elementary my dear Watson….. Analytics and digital policing

Advanced analytics has been used by commercial organisations for a number of years now. It may be a bank making better lending decisions, a credit card company protecting customers from fraud, a mobile phone operator making the right marketing offers to its customers or a retailer making sure it has the right products in stock.

However, what we’re starting to see are other types of organisations taking advantage of analytics. One exciting example is a new partnership between  SAS UK & Ireland and British Rowing. We will use the data they collect and analytics to maximise performance of the GB Rowing Team. This will "make the boat go faster" and ensure that the Olympic Games in Rio 2016 will be as successful as London 2012.

I came across another example this week when I attended a workshop with the Metropolitan Police in London. They are embarking on a Big Data programme and will use analytics to make them more efficient and deliver a better service to Londoners. The whole initiative is called “Digital Policing” – making full use of data, being truly mobile and being able to act in real-time. So what do they plan to do?

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Achieve your goooooooal!!! ... with strategy

World Cup 2014Like many people around the world, Americans have caught World Cup fever. The early success of the USA national team has contributed greatly to this spike in interest, but so too have the high level of competition, the intense passion of the teams and their fans, the drama of pressure-filled games, and the strategy deployed by the coaches.

I see strong parallels between the importance of strategy on the football (or soccer) field and in the corporate board room.

Whether USA coach Jurgen Klinsmann selecting the right players and determining the correct approach for each match or business executives developing a plan to achieve their organization’s objectives, the right strategy is crucial.

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Overcoming forecasting challenges in pharmaceutical benefits management

I recently took some time to appreciate and celebrate the SAS Professional Services division’s 25th anniversary. I find it impressive that SAS professional services has been collaborating with customers across many different industries for 25 years to solve business problems, increase profitability and improve customer service levels.

With so much industry domain knowledge available, I thought it might be useful to create a new blog series that will focus on exploring specific challenges and approaches in the area of demand forecasting.

Forecasting challenges for pharmacy benefit management organizations

Pete Dillman Advisory Analytical Consultant at SAS has penned a preliminary white paper on demand forecasting in the Pharmacy Benefit Management domain. Much of what follows has been extracted from his material and provides a summarized view of forecasting processes, challenges and improvements for pharmacy benefit management (PBM) companies.

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Series: BCBS 239 – Principle 13

Principle 13Principle 13:
Remedial actions and supervisory measures - Supervisors should have and use the appropriate tools and resources to require effective and timely remedial action by a bank to address deficiencies in its risk data aggregation capabilities and risk reporting practices. Supervisors should have the ability to use a range of tools, including Pillar 2.

The goal of the Principles of BCBS 239 is to provide banks with guidelines for effective risk data aggregation and reporting. In this SAS series on the Principles of BCBS 239, my colleagues have pointed out that regulators and supervisors have an important role to play. For one, ensuring compliance may help avert a future global financial crisis. In this post, I’ll talk about three requisite powers and capabilities they need to successfully evaluate compliance and identify possible deficiencies – freedom, knowledge and advanced analytics.

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Technology can’t hold a candle to the challenges of change

loginI wish James Dallas was the leader of my organization when I started leading analytics initiatives in IT years ago.  He would have been a great coach and mentor – to help me learn the things I believe today about the roles of technology and culture change in this space, instead of me having to learn the hard way.

Ultimately I learned on my own that culture shift and change management are the most important success factors in analytics projects where IT plays a big role.

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Enhance first principles of engineering with analytics

In the energy industry, oil and gas companies as well as utilities are struggling with many changes at once.  First, they're facing what the oil and gas industry has coined "the big crew change," meaning the retirement of those with the most skills and experience on how to run their current systems, processes and more. At the same time, energy companies must introduce the "relatively new" concept  that remaining competitive in the future will require more than adhering to first principles (of engineering or of physics) alone.

In physics and other sciences, theoretical work is said to be from first principles if it starts directly at the level of established science and does not make assumptions such as empirical model and fitting parameters.  Since analytics is all about empirical modeling and fitting parameters, there sometimes is resistance to using analytics along with first principles in the energy industry.  In real world situations, however, where past performance does not necessarily guarantee a known future state, combining analytic modeling to enhance first principle modeling can provide you with possible outcomes with different degrees of confidence. The resulting information will help you make decisions pro-actively verses reacting to an event that just happened.

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CSPs: Don't get left in the dust by warp speed technology

Software defined networking (SDN) and Network functions virtualization (NFV) = IT meets network operations. Google is ready but where does that leave the rest of the communications ecosystem?

It is an ugly situation for communications service providers (CSPs) right now. Internet traffic continues to grow due to the increasing volume of connected devices and media consumption on tablets and smartphones. Competition is only getting worse as more "over-the-top" providers enter the market, and current networks are not ready to support this growth.

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