The Business Analytics Value Proposition

Eric StephensAssociate Director, Research & Analysis

SESAC

Presented to the NTC Analytics Peer NetworkMay 30, 2013

The extensive use of data, statistical and quantitative analysis, explanatory and predictive models,

and fact-based management to drive decisions and actions.

— Thomas Davenport, Competing on Analytics

Business Analytics Defined

The extensive use of data, statistical and quantitative analysis, explanatory and predictive models,

and fact-based management to drive decisions and actions.

— Thomas Davenport, Competing on Analytics

Business Analytics Defined

You face complex decisions.

You’re having problems with processes.

You’re troubled by risk.

Your organization is not making the most use of its data.

You need to beat stiff competition.

You need analytics if…

Source: Adapted from INFORMS.

Greater overall efficiency based on more informed

decision making

The Value Proposition

How Analytics Can Help

Increasing Revenue Reducing Costs

Increasing sales to existing customers

(cross-selling, up-selling)Minimizing risk

Identifying new customers or markets

Improving productivity

Optimizing prices Reducing churn

Problem: Too many advances were not being fully recouped

Examined 10+ years’ worth of recoupment data combined with affiliate-specific attribute data

Identified areas of concern

Short-term result: Revise advance policies

Long-term goal: Predict likelihood of recoupment (e.g., a propensity score)

Example: Royalty Advances

Problem: Declining student performance and graduation rates

Examined large sets of performance data

Identified Algebra I as strongest predictor of graduation success• Then found 8th grade creative writing → Algebra I

Result: Focus on success in 8th grade creative writing ultimately helped increase graduation rates

Example: Gwinnett County Schools

Start from where you are—organizational analytics is an evolutionary process

Identify business problems that could benefit from analytics

Approach analytics is a combination of technology and people

Obtain executive support!

A Few Recommendations

INFORMS (www.informs.org)

Thomas Davenport (www.tomdavenport.com)

All Analytics (www.allanalytics.com) (sponsored by SAS)

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