Though most organisations currently leverage technologies such as enterprise resource planning (ERP) and customer relationship management (CRM) to propel themselves to greater efficiencies and sales volumes, recent studies show that ‘organisations are making important decisions without access to the right information.’ Thus rues Raymond L. Jones, Worldwide Vice President, System z Software, IBM, US (http://bit.ly/F4TRayJones).
Newer approaches to analytics, coupled with advanced business process management capabilities, signal a major opportunity to close gaps and create a new business advantage, he added, during a recent presentation of IBM System z, before a group of invited journalists, academicians and analysts in Singapore. “The organisations that have the vision to apply new business analytics approaches are building intelligent enterprises and will be ready to outperform their peers in the future.”
In the following email interaction with Business Line, Ray elaborates on the analytics theme.
Excerpts from the interview.
First, your observations on the workload increases witnessed by business analytics.
Companies and governments need to be able to analyse and extract intelligence from information, irrespective of where data reside, in real time -- without being bound by a particular system or platform.
To deal with this challenge, technology environments need to be integrated at every level -- from microprocessors to hardware and software -- and have to be highly-tuned for analysing enormous amounts of data in real-time and handling data-intensive transactions.
These so-called ‘optimised systems’ are crucial for companies to be able to handle analytic and transactional workloads especially in industries with high time pressures such as financial markets, smart power grids, health care and telecommunications.
What have been the recent advancements in analytics that have delivered huge value to users?
The application of business analytics and optimisation is opening up important new possibilities for organisations to understand the consequences of any decision and allowing them to operate at a new level of intelligence, far beyond ‘sense and respond.’
For instance, we see the coming together of sophisticated analytics from the research team with market-leading software platforms, deep industry insight and business consulting expertise to help organisations gain greater precision and predictability out of every business decision they make.
This includes applying advanced mathematical modelling, deep computing, simulation, data analytics and optimisation techniques to improve operational efficiency, as well as global access and management of digital assets used for collaborating and sharing information between a company and its customers, suppliers, employees and business partners.
By combining new analytics techniques with expertise in business process management, organisations are able to make decisions in an entirely different way. They are able to extract the precise information they need – highly relevant and contextualised – and predict the most likely outcomes of key decisions and events.
Through advanced analytics, intelligent organisations are able to benefit from the following:
• Intelligent profitable growth: More opportunities for growing customers, improving relationships, identifying new markets and developing new products and services.
• Cost take-out and efficiency: Optimise the allocation and deployment of resources and capital to create more efficiency and manage costs aligned to business strategies and objectives.
• Proactive risk management: Less vulnerability and greater certainty in outcomes as a result of the enhanced ability to predict and identify risk events, coupled with the ability to prepare and respond to them.
Given the nature of today’s business environment, no organisation can choose to leave benefits such as these on the table. Only those enterprises that can skilfully adopt, integrate, and deploy the benefits of enterprise-wide analytics and optimisation will be prepared to shape their own future.
In which sectors do you see the maximum potential for business analytics?
The benefits of business analytics applies across all sectors -- from traffic optimisation systems such as the one we have implemented in Singapore to predict traffic congestion 30 to 60 minutes in advance, to the application of ‘smart grid’ operations for asset monitoring and management across an energy grid.
Here is a sample of client work in analytics across various sectors:
- Retailers using business analytics to forecast consumer buying behaviours.
- Manufacturers optimising management of inventory items with an analytic asset called ‘Dynamic Inventory Optimisation System’ that reduces inventory levels while improving delivery capacity and quality.
- Governments implementing the ‘Fraud and Abuse Management System’ (FAMS) to identify fraudulent claims in healthcare, and another asset called the ‘Tax Collection Optimisation System,’ which does what its name says.
- Healthcare organisations implementing ‘Collaborative Care Solution’ that integrates patient information with advanced analytics so that doctors can deliver more complete and accurate decisions, reduce mistakes, and in the end improve the quality of care.
- Water authorities applying sophisticated sensor networks, smart metering, deep computing and advanced analytics to get smarter about how water resources are managed.
- Law enforcement agencies using data mining capabilities to recognise patterns within crime statistics and using this recognition to modify policing tactics so that resources are directed to where they are most needed.
At what stage of maturity do you find business analytics to be currently in? And where do you see business analytics headed, say, 5 to 10 years from now?
Today, technology and instrumentation for smarter connections are abundantly available, and at a relatively low cost. But to turn this information into new intelligent action, organisations need extraordinary powers of analysis – applied broadly and consistently. With information put into context, and with business process management acumen, leaders can work on issues that matter. But that requires a sea change in how leaders make strategic decisions and how they run their organisations.
The intelligent organisations of the future will have ready access to precise, relevant information, from all sources. Information will be analysed, contextualised and shaped for right-now decision making – and right-timed action.
New levels of intelligence will inform and enable organisations to empower all employees, especially those closest to customers and suppliers, to make decisions. Considering that today’s largely hierarchical organisations are accustomed to equating information with control, they will need to get substantially better at sharing information with partners across the hall, down the street and around the globe.
In terms of guiding and optimising organisations with smarter analytics, we’re already at that inflection point. There is no doubt that organisations have a great deal of work ahead in addressing the impact of their information gaps.
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