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Welcome!
Matthew J. Liberatore Fall 2009
Introduction
The internet offers customer and market data and the opportunity to experiment with different product, promotion, and pricing plans
RFID devices will be placed on virtually every pallet or carton generating vast amounts of new data
Introduction
These trends are leading firms to use and analyze data to improve business performance and make better decisions
Movie recommendation engine throttling: infrequent-use customers (most profitable) given priority in shipping Paying for distribution rights of DVDs (look at success of related movies)
As consistently make the playoffs despite a low overall payroll New metrics for player selection: on-base percentage and on-base plus slugging percentage Example: Martinez easier for opposing batters after 7 innings or 105 pitches (ALCS 2003)
Customer loyalty card data used in nearreal time to optimize yield, set prices for slots and rooms, and design traffic through the casinos
Which marketing initiatives to move through which channels HR analytics used in recruiting process
Predict the pain point and pull you away from the slot machine
Vanguard
Dashboards have non-financial metrics and line of sight that roll up to a corporate dashboard to drive outcomes Customer analytics is a major focus where data mining is used to score clients and track problems Six sigma and analytics combined to improve business processes
Wyeth
metrics feed strategy and strategy feeds metrics Ten high level enterprise metrics are integrated and reviewed by the CEO and top management Analytics and six sigma help to manage and improve all of their global processes: innovation, sales and marketing, supply chain, management, support
KPMG
Metrics are key and help to understand how strategy is being executed Focusing on electronic data discovery how to build associations across data Examples: bad debt chasing, payroll process, SOX audit controls in vendor sourcing and pricing, fraud discovery
Implementing an executive dashboard Providing business managers with operational metrics Focusing analytics in supply chain, customer relationships, working capital reduction
FTI Consulting
Analytics used in corporate finance, economic consulting, forensic and litigation consulting, as well as brand management and strategic communications in general Focus on leading and predictive metrics
Nordstrom
Analytics used at store level for merchandising (ID trends/styles), and by upper management to track customer interactions Heavy use in determining who should receive emails and catalogs in their multi-channel operation Lots of test versus control uses in the Direct Marketing aspects of their business Scorecards used to measure performance of new predictive models against current ones
Air Products
Extracts value from a single instance SAP system enabling their supply chains via dashboards, data accessibility via business warehouse cubes Analytics integrates with their lean/six sigma and other initiatives to drive customer and shareholder value Make visible data that is strategic such as customer metrics like Perfect Order Fulfillment
Colgate
Use data (financial, sales now R&D, shared services coming) generated from global ERP system to run the company Most managers can drill down into data to answer questions like what did we buy today Measure the back end of sophisticated marketing promotions to see what part worked
Marriott
Marriott Rewards used analytics to predict customer acquisition and retention Realized, expected, and potential customer value is measured Predict each customers likelihood of visiting a location on a weekday or weekend in the next year
Five participating companies: Wyeth, ING, Marriott International, General Electric, Caterpillar Key findings:
Analytics are applied within processes as early warning indicators Value of analytics greatly enhanced when integrated into day to day processes Integrating process analytics with continuous improvement techniques such as Six Sigma and Lean drives action and bottom line results
We are helping clients harness their vast amounts of customer and operational data We cannot find enough new grads with the right quantitative skills We compete on the basis of better knowledge of their customers, using analytics The riskier our business problems the more we rely on analytics After implementing our ERP system we are mining that data, and using data better in different ways
In God we trust, all others bring data Do you think that, or do you know that? Those who succeed with six sigma, and then advance in our company, have the better quantitative skills We are basing our strategy on analytics, especially customer analytics
Some authors view analytics as a subset of business intelligence (BI): a set of technologies and processes that use data to understand and analyze business performance and includes both data access and reporting, and analytics (Davenport and Harris, Competing on Analytics, 2007)
For the purposes of this course, we will not make any distinctions between business analytics and BI We consider business analytics to include the access, reporting, and analysis of data supported by software to drive business performance and decision making
Overview of Business Analytics Data Warehousing Business Analytics and Data Visualization Performance Management Introduction to Data, Text, and Web Mining Data Mining Methods and Applications