Using analytics to 'hit it out of the ballpark': no longer just for the fortune 1000 companies, today's analytics solutions provide access to highly accurate, trustworthy data that helps shape conclusions--making users more agile and better informed about all their market conditions.When a baseball player gets on a hot streak, he can hit any pitch and he'll rarely strike out. Whether hitting singles, doubles or home runs, a player's productivity is as efficient and reliable as a well-run business. When asked to comment on a hot streak, a player might respond: "I'm just seeing the ball so well, it's like swinging at a basketball." [ILLUSTRATION OMITTED] If you follow the analogy, the same scenario applies to CFOs and financial executives when they deploy effective business analytics software. The only difference: success, when achieved, isn't streaky--it's consistent. Analytics solutions empower financial executives to "see the ball," or in this case the data, with a scope and detail previously unattainable. It's the business world's equivalent of "swinging at a basketball." With an integrated analytics solution in place, budgeting becomes more accurate and effective, and planning and forecasting is conducted with dramatically fewer complications. With analytics deployed, you know your business inside-out; you are in complete control, and you can respond to all organizational challenges as they occur. This is a primary reason why corporations across North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. are deploying analytics solutions at a torrid pace. Unquestionably un·ques·tion·a·ble adj. Beyond question or doubt. See Synonyms at authentic. un·ques  tion·a·bil , the
cost-savings and efficiency gains delivered by analytics tools offer a
rapid return on investment (ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). ); productivity gains make this
deployment even more enticing. U.S. analyst firm International Data
Corporation (IDC) recently concluded that the average company realizes a
massive 431 percent ROI on analytics systems over a five-year period.
What Do Analytics Solutions Do? While the future is uncertain, business executives are less tentative if they can circumvent cir·cum·vent tr.v. cir·cum·vent·ed, cir·cum·vent·ing, cir·cum·vents 1. To surround (an enemy, for example); enclose or entrap. 2. To go around; bypass: circumvented the city. uncertainty and quickly adapt to evolving market and customer dynamics. To make this possible, companies must be able to improve their ability to identify, classify and intelligently analyze all available information. To do this, companies need solutions that go beyond conventional query and reporting tools. Analytics solutions provide corporations with the much-needed ability to leverage their existing IT investments, no matter what they are, in a manner that facilitates greater intelligence. If an effective analytics solution is deployed, the financial team can bridge all known and unknown data gaps between all IT systems--including computing platforms See platform. , ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. packages, CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. , HR, financial software and legacy systems. An analytics solution can also be deployed across global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. . As such, analytics will provide the data mining and reporting capabilities executives need to deliver a comprehensive view of their entire organization, in real-time. Better data accessibility, in easy-to-manipulate and easy-to-understand reports delivers better business intelligence. It provides the "why" behind performance questions and alleviates CFO See Chief Financial Officer. pain by bringing business inefficiencies to the forefront and enable better decision-making. 'Hot Player' Scenario One example of analytics in action is Huber+Suhner (H+S), a global leader in developing systems and components for radio frequency, wireless and fiber optic applications. H+S was unable to effectively monitor its key business performance indicators before implementing an analytics solution. Specifically, its IT and finance teams didn't have a means for accessing data from multiple ERP systems at the click of a button. However, after carefully reviewing its needs and deploying an analytics package, it began to view pieces of its operations with more clarity. The result was immediate recognition of hundreds of thousands of dollars in lost revenue (in this case associated with product shipping costs). In hindsight, if the company didn't deploy its analytics solution, it would have continued to overlook this unnecessary profit leak. Instead, H+S was able to leverage its improved data accessibility and better performance into better reporting to facilitate more effective management decisions and real cost savings. This example shows how some organizations are improving their data-gathering capabilities and improving business intelligence through analytics solutions. The possibilities are limitless with analytics, and a good solution will be open and flexible enough to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" specific customization requirements. For example: * Pharmaceuticals can use analytics to review records of cancer patient treatments in a data warehouse to better understand why some treatments receive negative reactions. * Oil and gas companies can deploy analytics to maintain control of their discretionary cash flow Discretionary cash flow Cash flow that is available after the funding of all positive net present value (NPV) capital investment projects; it is available for paying cash dividends, repurchasing common stock, retiring debt, and so on. , efficiently determine and monitor cash operating costs operating costs npl → gastos mpl operacionales and dry-hole costs. * Insurance companies can use analytics to better forecast auto collisions by region, allowing costs to customers to better reflect local driving habits. * Hotels can use analytics to assist with evaluating trends in business ratios, revenues, expenses, occupancies, efficiency ratios, market segments and agents. Leading Your Team to Victory The finance and information technology industries are abuzz with terms like corporate performance management (CPM (1) (Critical Path Method) A project management planning and control technique implemented on computers. The critical path is the series of activities and tasks in the project that have no built-in slack time. ), business intelligence (BI) and analytics. Much of this positioning is causing significant confusion for financial executives--and it doesn't have to. Each of these terms represents a means to an end, and that end culminates in a enterprise-wide analytics capability that empowers the finance team to proactively manage key, but intangible, business indicators. These include: 1. The impact of the falling U.S. dollar on domestic and international sales; 2. The implications of the expanding euro on European business opportunity; 3. The ramifications ramifications npl → Auswirkungen pl of the growing outsourcing markets in India and China. An analytics solution should deliver the ability for better planning and forecasting for business activity based on any variety of factors. Analytics at Work An effective analytics portfolio will address operational reporting, monitoring and notification, business modeling, consolidation, budgeting and forecasting. This allows companies to report on, inquire in·quire also en·quire v. in·quired, in·quir·ing, in·quires v.intr. 1. To seek information by asking a question: inquired about prices. 2. into, monitor, plan and control their business activities. Designed to support the extended enterprise, analytics solutions enable companies to easily share information with employees, customers and suppliers on a secure basis. They ensure that the right information is delivered to the right people, at the right time and in the right format. Analytics allow companies to monitor critical business processes and key performance indicators Key Performance Indicators (KPI) are financial and non-financial metrics used to quantify objectives to reflect strategic performance of an organization. KPIs are used in Business Intelligence to assess the present state of the business and to prescribe a course of action. (KPIs), notifying key personnel of critical events and situations. The portfolio helps to analyze successes and failures and to plan for future events. Analytics offer comprehensive financial inquiry, reporting and analysis capabilities in real time and allow close interaction with other applications. Analytics allow Web-based delivery of information to customers, suppliers and partners, enabling financial information to be easily embedded Inserted into. See embedded system. within intranets or connected to the extended enterprise. Analytic applications Analytic Applications are a type of business application software, used to measure and improve the performance of business operations. More specifically, Analytic Applications are a type of Business Intelligence solution. support a range of performance management functions, including enterprise planning, subsidiary management and consolidation. While analytics solutions have been available, on a reasonably large scale, for a few years, deployments have been limited to the largest companies in the Fortune 1000, primarily due to cost and product execution complexity. Evidence that the marketplace has matured stems from the availability of new, highly customizable analytics solutions that are easy to use. Today's solutions crush common myths associated with the software, such as: companies must spend exorbitant amounts of money to deploy this technology, and hire statisticians Statisticians or people who made notable contributions to the theories of statistics, or related aspects of probability, or machine learning: A to E
If a company selects the right analytics solution for its business structure and environment, decision-makers will have access to highly accurate, trustworthy data that helps shape conclusions and alerts managers to required actions and proposed outcomes. Companies that implement analytics become more agile and better informed about all their market conditions. John Corden is Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , Systems Union Group (www.sunsystemsamericas.com), developers of SunSystems business and financial management solutions and SunSystems Analytics. He can be reached at moreinfo@sunsystems.com. |
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