Transforming data into insight and awareness

As competition grows fiercer by the day and differentiation becomes even more difficult, information is one of the last untapped sources of strategic advantage.  Yet while most organizations are swimming in a sea of data, they remain thirsty for information and insight.  Analytics can transform data into the knowledge needed to extract every last drop of value out of customers, products, services, and resources.  Analytic tools such as statistical modeling, data mining, and predictive analysis, can help companies better understand the past, make the right decisions in the present, and predict the future.

While most companies understand their customer base as a whole and what products or services they purchase, analytics can take an area such as customer management to the next level.  Data mining can segment customers to reveal what groups are likely to buy in the future and what prices they will be willing to pay.  Statistical modeling and predictive analytics can be used to forecast which customers are at risk of terminating their relationship or to identify which customers are ideal candidates for cross-selling opportunities.  The profit optimizing bundle of customers, products/services, and sales channels can be pinpointed through the use of linear programming and stochastic modeling.  Ultimately, organizations that are able to harness the insight provided by analytics will be able to rapidly improve profitability, increase efficiency, and surpass the competition.

Functional Areas and Analytics Applications

• Pricing – Predict the impact of price changes and identify the price points that maximize profit.
• Customer Management – Forecast customer lifetime value and predict customer retention rates.
• Marketing – Segment customers to understand behavioral patterns and optimize cross-selling and other marketing campaigns to maximize ROI.
• Supply Chain – Forecast inventory needs and predict the likelihood and impact of supply chain disruptions.
• Risk Management – Quantify individual customer risk and predict customer likelihood of nonpayment, fraud, and default.
• Financial Performance – Identify the profit maximizing bundle of customers, products/services, and sales channels and understand nonfinancial drivers of fiscal results.
• Asset Management – Predict asset failure and optimize equipment replacement and maintenance schedules to minimize total cost of ownership.
• Human Capital – Forecast employee turnover, identify optimal compensation and retention plans, and quantify employee profit contribution.
• Information Technology – Predict utilization of and optimize sizing of IT infrastructure.