In Other Words - SAS Senior VP and CMO Jim Davis talks about business, analytics and technology

I had a busy travel week recently. I attended the SAS Forum Netherlands, a CIO roundtable event and the SAS Forum Belux.

All were great events and it was especially good to see SAS customers participating at these forums. We learn so much from direct interaction with our customers and nothing will ever replace that.

The theme of SAS Forum Netherlands was sustainability. I think a lot of people thought the economic downturn killed sustainability initiatives, but that’s not true at all. That attitude is really more of a reflection of what the media pays attention to.

It turns out sustainability has two kinds of “legs.” The sustainability play when times are good revolves around doing what’s right for the environment and showing that your company cares, with the resource issues important, but secondary.

In a down economy the economic benefit of optimization of resources like power, fuel, etc. moves to the forefront. The focus is different, but the outcome is the same. Companies optimize their activities in ways they might have gotten around to doing anyway, but now they’re doing it under the banner of sustainability, which is different from previous downturns.

As we come out of the downturn, sustainability will become more a part of everyone’s core business. We’re already seeing that in requests for proposals we get from customers. People who are doing business with us want to see what we’re doing ourselves to be more sustainable.

Did the economic downturn slow down your company’s interest in sustainability? Do you see signs of it coming back?

There’s an article in Tuesday’s Wall Street Journal titled “The Economic Recovery: Fast, Slow or Neither,” claiming that we’re pulling out of the economic slump, and giving various predictions on whether the economy will rebound slowly, quickly, or spike and return to a slump.

Another really interesting article in The Guardian lists “Winners and losers in the global recession,” based on a breakdown of GDP numbers for key countries. According to the figures the US is in recession but leveling out and the UK is still in recession and facing a slow recovery. Japan is still in recession and looking forward to one percent growth in the second quarter, which would be its first expansion in five quarters. Germany and France are out of recession, The Guardian concludes, and Australia stayed out of it completely.

What I find most fascinating, based on the theme I seem to have developed in this blog of growth in established and emerging markets, is that China and India are both expanding dramatically. China’s GDP grew 7.9 percent, up from 6.1 percent in the first quarter. India’s rate of growth has slowed a bit, but it’s still looking at 8 percent growth this year, making it one of the fastest-growing economies in the world.

We’re coming out of a trough. We’re headed in the right direction. What do we do differently?

That’s the real question. What do we do differently? It’s one thing to be more efficient doing what we’ve always done, but this market is different. We need to look at what new businesses we should be in – in addition to concentrating on our core. The sooner we recognize the world has changed, the sooner we are likely to be able to see outside our traditional walls.

I just got back from a trip to Singapore for our Premier Business Leadership Series, with a stop in Tokyo. Sometimes I think that if I was blindfolded, put on a plane in Raleigh and let off in Tokyo or Singapore, the only real difference I’d notice would be the time zone.

It was hot, it was humid, people are concerned about the economic downturn and they’re all trying to optimize their businesses.

If I had delivered my presentation two years ago I would have been quoting from Thomas Friedman’s The World is Flat, and talking about how emerging markets have the advantage over mature markets. There’s fiber everywhere and small economies can take advantage of easy access to data. They don’t have the red tape and entrenched attitudes. They’re starting new.

Two years later the world is flat and all those things are true, but the emerging markets are feeling the same pain as we are. We all face the same challenges: how do we do more with less and recognize this economy is changing the game.

We’re facing the same challenges, but that also means mature markets have the same opportunities as emerging markets.

Everybody is dealing with issues related to optimization, whether you’re a young company or an old company. We met with a telco that’s trying to evolve from being a wireless provider to an information provider. We met with a retailer that needs to optimize their inventory and their price points.

We had similar conversations in Mexico, and we know the Indians and Chinese are facing the same problems. The economists we heard from in Singapore are talking about the same issues as economists in the US.

The only difference is I was sleepy.

Oh, and the sushi is better.

In my last post I talked about our analyst conference in Spain and what messages resonated with them. We talked about analytics and how they can help our customers in the downturn. We also talked about making those advantages more accessible through software as a service.

It's part of a larger theme I've been thinking about: what analytics are and what they are not, in terms of being able to predict the future of your business. Let's be honest, analytics is in danger of becoming an overused and abused term, in the same way that “business intelligence” got watered down as more and more companies claimed to offer it.

It's no surprise I think analytics play a key role in helping companies make better decisions, especially now, when it can make a real difference in a tough competitive environment. A lot of companies might be worried about the cost, but cloud computing makes it more affordable for companies that need it right now but can’t afford to bring it on site.

We have to recognize that our customers are at different stages of their evolution. Employing analytics in a software as a service environment lets you see if they have a positive effect on the bottom line. If so, you can go forward with a fuller installation.




I stole this “8 levels of analytics” chart from sascom magazine and use it in presentations. The first four levels, while they are legitimate and relatively commoditized at this point, don’t really show you what’s likely to happen in the future. They support reactive decision making. They’re great at benchmarking, but what about the other four types of analytics? If we think about growing our business in tough economic times, we need to be more proactive in our decision making. Steps 5 through 8 are all about the future: customers, suppliers, sales.

Again, this is where the term “analytics” has been watered down. There’s no doubt that everybody offers reactive capabilities, in spreadsheets, in OLAP cubes, in report writers. But how many people are using the proactive tools around optimization, modeling and forecasting? There’s a misconception that those capabilities are reserved for companies with massive computing power and PhD statisticians. That’s no longer true with the advent of cloud computing and software as a service.

That message appeals, not only to the analysts but to our customers.