Enterprise needs 'predictive analytics' to survive
- 12 August, 2010 14:33
Organsations that want to survive in an ever-changing marketplace must supplement their business intelligence activities with business analytics, according to SAS senior vice-president and chief marketing officer, Jim Davis.
Speaking at the SAS Forum in Sydney, Davis told delegates the past couple of years have provided a global challenge for enterprise that was unlikely to dissipate.
“We have seen incredible change in the last couple of years and we have been retooling for the future,” he said of SAS which, despite the GFC, grew during 2009 with revenue of $2.3 billion. In the first half of 2010, SAS Australia and New Zealand achieved 20 per cent total software revenue growth.
Businesses are facing several issues, such as making businesses more effective. But they must also understand and focus on their competencies, and drop things that are mediocre.
“And probably the most important thing we need to be dealing with from a management perspective is taking the business and turning it into a new business for a very new the future,” Davis said.
“The message is what was core to your business in the past may not be going forward. So don't rely on the past.”
Enterprise must think about balancing optimisation and innovation, and be willing to accept the inherent risks of innovating.
“If we talk about innovation, we are talking about new ways of thinking. We're not talking about best practices, we talking about next practices.”
Driving this is the explosion of data. Not only is it doubling every 18 months, new data sources have made their way into the mainstream. And while 95 per cent of the data is unstructured, most enterprise level decision making is based on structured data from organisational databases.
“There is a lot of rich information out there that we can use and incorporate in our decision making. Look at social media – what would happen if we married that with our structured data and used that to support decision making.”
Yet Davis considers the term ‘analytics’ to be “the most used and abused term in the marketplace today”. Nonetheless, he said it plays a very important role, particular when it is predictive in nature.
Analytics, he told delegates, combines traditional business intelligence such as standard and ad hoc reports, online analytic processing and alerts with business analytics — statistical analysis, forecasts, predictive modelling and optimisation. One is descriptive while the other is more predictive.
“I think the term BI is overused as well,” he said. “We really need to move beyond BI and talk about business analytics. BI is too much of a catchall.”