The 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?
When projecting the value of analytics, traditional IT business case methods won’t cut it. Most IT business cases project savings and deliver a hard ROI based on reduced staff or less cost as benefits. Even when the benefits are easy to see, projecting ROI is less straight forward when you're looking at:
- Ensuring that profitable customers stay loyal and buy more.
- Putting the right products on the right shelves at the right time around the globe.
- Determining which transactions are high risk and too costly to recover from.
- Identifying where there is revenue leakage due to fraud.
Quantifying these types of projects to validate the need for an analytics solution takes a special skill. Part of that skill set is knowing where and how analytics has been used successfully in similar businesses and scenarios and then projecting the benefits close to home.
At SAS we have thousands of stories to tell – case studies and successes – to help business leaders know what ROI to expect from their analytics endeavors. This helps our IT brethren, because it’s not just about input and output from technology. It’s about knowing the business’s strategic goals, and about understanding how better decision making based on data can really drive those goals to fruition.
The “Everyone understands the value of analytics” myth is the third myth covered in a new webcast series that busts four analytics myths. The series features Keith Collins SAS CIO and James Dallas, former CIO of Medtronic. It also features interview clips from IT peers in multiple industries. As Dallas says when busting this myth, IT leaders need to understand that the implementation of analytics capabilities is not the goal, but rather the means to the end. And every IT leader needs a buddy in Finance to help “frame up” the value in tangible business results.
Analytics can drive success for IT – and help the CIO gain a seat at the strategic table for the business. Understanding the value of making better decisions based on advanced and predictive analytics opens the door to being more than a cost center that spends money on hardware and software for the corporation. It leads the IT leaders through the door and helps them become business leaders that only use technology as a tool in their toolbox to enable business results.
Watch the full Webcast to learn more from Dallas, Collins and fellow IT pros.