What can big data analytics do for you?
Five ways analytics fuels innovation and improvement
Are you convinced you should be using analytics but don’t know where to start? In this article, we outline five broad ways that analytics is being used to meet business goals. And we include examples from organizations who are already seeing real results. From commercial businesses to government agencies, each of these organizations has learned valuable lessons along the way while implementing analytics.
1. Optimize your business operations
The advent of “big data analytics” – advanced analytics applied in a high-performance computing infrastructure – redefines the art of the possible. Problems that were difficult or impossible to solve before are now manageable. Organizations can analyze all their data – not just a subset of it – more extensively, iteratively and frequently. Analytics-savvy organizations are exploiting this capability to answer new questions about their business operations.
Bernd Bütow, Chief Operating Officer for Creditreform, offers an example from his company, the German market leader for business reports. “Recently we ran a very interesting project – very inspiring for me personally – where we analyzed 650 million transaction data records in our system, which were produced by our skilled researchers in our 130 offices. We analyzed this jungle of 650 million transactions to find the best-in-class processes – which process is the fastest, the strongest in quality aspects and so on.”
By implementing those best practices in each office, the company accelerated some processes up to 30 times over, said Bütow. “Since our business is to provide customers with timely, accurate knowledge, this internal analysis was a very effective approach for us.”
Ten percent quality improvement means we saved our customers from ... potentially losing 20 million to 40 million euros.
Chief Operating Officer
2. Deliver faster answers
One of the big selling points for big data analytics is its ability to deliver better business decisions in a fraction of the time. Consider this example from the UK mobile commerce company Weve. “We will be serving real-time advertisements across the mobile spectrum – across those 17 million customers – in 300 milliseconds as they’re surfing mobile websites,” says David Sear, CEO of Weve. Moreover, those ads will be backed by deep information about each customer.
“If you have opted into the program, we will know about you as a unique person – your habits and how you typically respond to ads – so we can give you something that’s not only relevant to you as a person, but also relevant to your situation right now,” explains Sear. “It’s real-time marketing in a way I don’t think the industry has seen, but certainly will going forward.” Weve essentially constructs a relevant campaign within fragments of a second.
For Creditreform, speed means fast answers to customer inquiries, says Bütow. “Our customers like us to answer credit approvals within one second. We need to be able to query the database with 150 million customers’ information, including the payment process, and on the basis of that information, give back the answer within one second, because the customer shouldn’t have to wait for us.”
For Telepass, the provider of electronic toll collection systems on Italy’s motorways, speed means rapid detection of system problems, to avoid lost revenue – as well as having rapid processes to make faster decisions about operations.
3. Improve the quality of services
Better analysis + better data + faster processing = real business value. The ability to include more data, run deeper analysis on it and deliver faster answers has significantly improved Creditreform’s services, says Bütow. “Business reports or commercial reports usually consist of making predictions about the solvency of a company in the next 12 months, for instance. The quality of this prediction determines the quality of the report. Of course we are very interested in refining this prediction, and so we added some real-time data to our database. By doing so, we raised the predictive quality of our business reports by an average of 10 percent.
“In our business, that is huge growth in quality. To put it in perspective, I did a little calculation. I found out that a 10 percent quality improvement means we saved our customers from 20,000 to 30,000 payment failures – payments of perhaps 5,000 to 10,000 euros each, which means we prevented our customers from potentially losing 20 million to 40 million euros. That is a huge benefit. ”
4. Deliver relevant, targeted customer communications
Smart marketers will realize what we all know from personal experience: We get our information from PCs, television and mobile devices. Rather than fragmenting the audience, these screen experiences offer complementary ways to reach the same audience, if you coordinate among them.
“The most intelligent marketers will bring those things together,” says Sear. “We are already seeing companies serving tailored messaging to their customers across our opted-in base of consumers, in concert with TV advertising or outdoor campaigns. They’re trying to create a marketing mix that puts mobile more at the center of their whole approach – and that includes social networks, mobile messaging and display advertising targeted to somebody using a particular device.” Marketers also have a new and powerful source of information to inform just a sample of people who responded to an ad in the past, not just a survey about how somebody reports they responded. Mobile payment platforms will offer up actual data as customers move through the purchase funnel and pay. “As we move more and more toward mobile payments – something the mobile industry has always wanted but not achieved – the marketing industry gains the ability to really understand return on investment in real time,” said Sear.
5. Deliver new services never before possible
Big data analytics helps organizations capitalize on a wider array of new data sources, capture data in flight, analyze all the data instead of sample subsets, apply more sophisticated analytics to it, and get answers in minutes that formerly took hours or days. Mobile technologies tell you where your customers are right now and, if they’re surfing mobile websites, what they’re looking at or buying.
Who couldn’t spot some new business opportunities in that mix?
“The better we can reach customers and give them services, or accept their payments wherever they are, the better we can grow,” said Ugo de Carolis, CEO of Telepass. “We have customers traveling the highways with their mobile devices, and the information we have could help partners or other companies provide services to these travelers. The more you can imagine what customers will need and provide relevant services, the more value you will bring to them, to your organization and to business partners.” Sear mentions a supermarket chain in the UK that is casting geofenced nets around their stores, and then making targeted offers to selected customer segments outside that fence to entice them into the store. “It’s conceptually simple, yet complex to do, and it represents a fundamental shift away from how marketing has been done in the last 30 years,” said Sear.
Big data analytics allows marketers to move from what Sear called “everyday low value” – we all get the same offer regardless of who we are – to personalized value, where we get discounts, offers and incentives specific to us as individuals. Customized marketing is by nature more relevant and compelling. “In a bizarre way, these digital technologies may save retail, after the digital world nearly destroyed retail in the last 10 years,” said Sears.