Friday, August 20, 2010

Analytics Drive Business Profitability

BI Profitability Game Changer for Growth

In today's fast moving business world, customer relationship intelligence is everything. CRM technology has promsed for years to enable one to one relationship support and also to tailor organization's marketing and operational programs to drive micro-segmentation capabilities for target marketing.

This has been a long time coming. But finally there is starting to be stronger evidence backed by quality research that we are seeing some game changing realities.

MIT and the Economist, two organizations that drive rigor before they speak have recently written on the experiences of IBM, Cablecom and Walmart.

IBM claims over $1B new revenue from BI insights

IBM is a pioneer in the use of mathematical models. Their analytics challenge was to learn how to maximize revenue per client by analyzing years of sales data. This insight helped them reconfigure their sales account size, industry and service offerings. Their position is that over $1B US in new revenue was generated as a result of a more optimized sales coverage was the outcome from analyzing huge data sets for business insights.

Wallmart Inventory Intelligence World Class Smarts Continue

In the case of Walmart well known for thier legacy in optimizing supply chain practices. They invested heavily in a Retail Link investory management system where they turn information into profit acceleration outcomes. For example, they can offload inventory management to suppliers by not taking any ownership of the products right until the point of sale by the consumer. This new strategy allows them to decrease inventory risk, conserve cash flow and reduce operating loss.

Cablecom Reduces Customer Churn from BI

Cablecom like many cable providers constantly live with the reality of customer churn. In their case by using advanced data analytics, they learned that they can impact customer defection loss by increasing calls by their customer support services with new offers. These offers were new incentive programs to higher risk customers resulting in reducing their customer defection loss from 20% of subscriber defection to 5%.

These examples reinforce that if business analytics are carefully architected with deep gold mining of tera or petabytes of data there is profitability to be found.

SUMMARY

In summary, data analytics has the ability to increase revenue, improve workflow efficiency, increase customer flows and improve customer satisfaction and hopefully achieve increased loyalty outcomes as well.

With the falling costs of high performance and cloud computing, more economical data grunching pathways are now available. the market is growing at about 10% a year, roughtly 2x faster than the rest of the Software industry, so CEO's , COOs, and CFO's and CIO's should be continually inspecting the quality of their CRM and data analytics capabilities.

My real question is how much knowledge do board of directors have on CRM - have you ever seen a Board Director overseeing CRM and BI and asking the tough questions at board meetings on these fronts... ? New ways of thinking are needed.

Is your organization up for the challenge?
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