“Why is big data critical? It comes down to competitive differentiation,” says Craig Stires, research director, Business Analytics and Channels, IDC Asia Pacific. “Are you going to be making the changes to give you competitive differentiation?” he asks.
Stires says organisations that have made strategic moves to pick the right projects are starting to see real gains.
He says there could be a lag of 12 to 18 months from approval to getting the results.
“Picking the right project now can make a difference,” says Stires, who was speaking at the recent IDC Asia Pacific Business Analytics Conference in Auckland.
Business analytics play right into the priorities of organisations today. Stires says a recent survey of IDC among 1000 organisations reveals the top three things driving businesses today are acquiring new customers and reducing customer churn; finding ways to expand to new markets; and identifying new innovations for competitive advantage.
“Every organisation is under competitive pressure,” says Stires. “All want to get new customers, keep very specific customers.”
He says analytics initiatives that have the most traction can be tied back to financial KPIs (key performance indicators). If the project is not tied to revenue, it will be hard to get budget approval.
He uses the orange as a metaphor. All oranges start with the same colour. The differentiator will be having a blue fruit inside an orange. “Be the multicoloured orange, and not just the squeezed orange.”
Organisations can decide whether to do things differently from their competitors, or wait and start to take action because they are being forced to, says Stires. “They are the squeezed orange.”
He lists some steps enterprises can take:
- Rather than looking at big data as big cloud, take set of competitive goals you want to drive forward and focus on that.
- Look at your infrastructure and what staffing changes you need, now.
He also cites sectors applying analytics in “interesting areas”.
One of these is agoda.com, a website for booking hotels. Agoda needs to give a reason for people to act, and to create a sense of need. So when two people are looking at the site, it will indicate that, and how many number of rooms are available.
Another is dynamic pricing. If a plane has 450 seats, it can change per seat pricing to get “absolute optimal amount” for that flight.
In manufacturing, analytics are used for preventive maintenance of equipment. It can also provide integrated security in the manufacturing floor. He cites a logistics video analysis in one company which foresees when a problem is starting to form, like alerting staff if an object is blocking the security exit, or there is congestion in an area that can prevent a delivery truck from moving through.
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