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Realizing the transformative power of analytics requires a new, holistic approach that turns information into insight and insight into business impact. In this context, AbsolutData, a leading, consulting-oriented, analytics and research firm, in partnership with Alteryx, a leading analytics software provider, conducted a survey of thought leaders across multiple industries to understand the current status of analytics across their organizations. The findings were quite interesting.
Yes
82%
No
18%
Customer acquisition/retention
Increased loyalty
Optimize marketing/channel
CHALLENGE #1: Organizations struggle with integrating large volumes of disparate data
Challenges faced during implementation of analytics
Siloed departments, each with separate data resources Integrating massive amounts of data Integrating disparate customer data types Converting data into actionable insight Collecting relevant customer data 23% 43% 39% 38% 37%
Implications:
No single source of truth: Marketing, Product Management, Operations, and other departments use different data sources to answer similar questions. Lack of adequate tools: Time is wasted using tools that cannot process TBs (1000 GBs) of data. New Data sources are difficult to integrate: Unstructured, but valuable data such as social media and call center logs cannot be used.
Case Study
A building is only as good as its foundation; and insight is only as good as the data. Hence, before looking to build a strategy, before getting that actionable insight out, it is of prime importance to get all the right data. Clients face these challenges day in and day out and one recent instance is of a $4B retail giant who wanted to understand the impact of various marketing activities across various media TV, radio, print, direct mail, digital, emails, etc. Most of this data was available in silos across various internal departments, industry stakeholders as well as media vendors. A substantial amount of time was initially spent to educate the various stakeholders about the desired outcome from this exercise and hence get them on-board. After data collation and creation of a data-mart, predictive models were created which improved the ROI from their marketing spend.
AbsolutData and Alteryx 2013 Proprietary and Confidential
IDCs Digital Universe Study (sponsored by EMC), December 2012 estimates that between 2010 and 2020, data stored is expected to grow by ~50X to 40K Exabytes
CHALLENGE #2: Organizations lack industry leading skills to execute their analytics strategy
Current Skill-set to execute analytics strategy
1% 8% 12% Industry leading, with a mastery of advanced analytics and business domain knowledge Advanced, for creating workflows using all sorts of predictive and spatial analytics Basic, for reporting and modification of existing analytic workflows 38% Limited, for generating reports only None
42%
Implications:
Line-of-business users must do their analytics: Limited availability of IT staff/resources with specialized skill sets can cause delays. Users in the various departments must learn analytics tools in order to get the answers they need. Scaling up of analytics operations is difficult: Skilled resource shortages, access to data, and overly complex analytics remain a barrier to greater usage.
Case Study
While setting up an insights hub at a worlds leading genealogy company, the analytics director asked, Where do I get trained statisticians who understand my business and can make business decisions? She soon realized that it was easier to find separate professionals to provide each of the three above mentioned needs rather than trying to find people who would meet all three needs at once. With analytics tools in the hands of the subject matter experts in the individual departments, a culture of rapid organization decision making was created. This approach also allowed the analytics center to be scaled at wish, and is also considerably more cost-effective.
CHALLENGE #3: Organizations struggle with defining and calculating ROI for analytics
Estimated Return on Investment
Don't know
Implications:
Careful planning is required to maximize ROI: An organization needs to carefully plot its analytics journey to derive the maximum benefit. A customized approach is required based on the analytics maturity of the organization and its current analytics capabilities.
Case Study
Organizations today have increasingly complex business models with unique value propositions, strengths and weaknesses. To apply a one size fits all approach to analytics is sub-optimal. A recent example is of a client who went on a three-year analytics journey to identify the right analytics operating model for itself. The client started with ad-hoc analytics projects, gradually developed campaign execution capabilities (high volumes, and extremely sensitive to accuracy), and evolved to managing complex strategic projects for a global audience. Today the organization considers analytics indispensable to its marketing and strategy functions. Tailored approaches to analytics are required depending on the current analytics maturity of the organization and the types of problems that analytics needs to solve.
Transformation is a constant process of optimizing and refining data sources, learning from the previous outcomes, and applying that learning to transform how the organization achieves future goals. In an era of relentless competition, organizational leaders realize that investment in analytics technology, employee training, and external resources must continue.
4% 1%
Technology
95%
Average Decrease: 10% Average Increase: 25%
People
75%
12% 13%
External Resources
71%
22%
7%
Summary
There is no doubt in anyones mind (or databases) that there is access to more data than ever before, and this is on a rapidly increasing curve. Organizations are fighting hard to utilize this data in the best way possible to have an impact on their bottom line, but are facing big challenges in doing so. These challenges vary, from: struggling with volumes of data not having the right skill sets to devise and implement an effective analytics strategy not being able to measure the return-on-investment on analytics
However, the companies that have implemented analytics with moderate success and shown superior business performance continue to inspire others to transform through analytics. Successful implementation of analytics is now the holy-grail to management, and requires continued effort and investment to gain a competitive advantage. For more information, please visit:
www.absolutdata.com
www.alteryx.com
Authors
Abhishek Bansal
Associate Director, Customer Analytics, AbsolutData Research and Analytics
Abhishek leads the customer analytics practice at AbsolutData, a team of 100+ marketing analytics professionals. Previously, he spent seven years with Citibank in consumer banking analytics, and two years with Accenture in financial services consulting. In his current role, he is responsible for analytics delivery, capability development and client management. Abhishek holds an MBA by education. He can be reached at abhishek.bansal@absolutdata.com.
Mohit Agarwal
Consultant, Solutions Team, AbsolutData Research and Analytics
Mohit is a part of AbsolutData solutions team which pioneers in assessing analytics prowess of leading organizations and devising the analytics roadmap ahead. He specializes in designing analytics solutions and processes that help deliver impact through analytics. Mohit has five years of experience in marketing research and marketing analytics, and he holds an MBA by education. He can be reached at mohit.agarwal@absolutdata.com.
Bob Laurent
Director of Industry Marketing, Alteryx
Bob has over 20 years of analytics, marketing, media relations, and engineering experience, including management positions at New York Telephone/NYNEX (now Verizon) and Fujitsu Network Communications. As Director of Industry Marketing at Alteryx, he is leading the development of strategic marketing and lead generation programs to expand the companys presence in current accounts, penetrate new markets, and build a loyal customer base. Bob holds a BSEE and an MBA by education. He can be reached at blaurent@alteryx.com.
Appendix
Data was gathered from a diverse set of professionals across a range of industries:
Products/Services Offered
33%
25%
42%
Consumers Other businesses Both
Industry
Services Retail, wholesale Banking, Finance, Insurance Telecom CPG Hospitality Manufacturing Nonprofit Government Construction Transportation Other 6% 4% 3% 3% 3% 1% 1% 1% 24% 24% 16% 15%
Number of Employees
Department 4% 6% 7% 9% 41%
25%
28%
32%
1-100 1,001-5,000
101-500 5,000+
501-1,000
23%
I develop customer analytics solutions for my company I do not develop applications, but I use their output I give directions to a team on how to use customer analytics I am not involved in customer analytics Other
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