A year ago every time "big data" was mentioned, one had to define the term, along with its tag-along partner, analytics.
Now, the terms not only roll off the lips, they've become engrained in business plans, corporate culture, operations, marketing, and any kind of vision for the future. The speed with which big data and, particularly, analytics, has taken hold demonstrates just how rapidly the technological side of business is changing, as well as the very nature of business itself.
A study by Harvard Business Review Analytic Services and SAS makes this point very clearly. Its basic finding is that at least 50% more organizations enjoy improved financial performance from their analytics if they have widely distributed access to those tools. More widespread use of analytics also increases productivity, reduces risks, and helps individuals make faster and better decisions, they say.
"As timely decision-making becomes more important, analytics is improving and changing the way those decisions get made. This survey shows that analytics is not just a tool or a technology as much as a driver of a decision-making discipline that ushers in an era of cultural change, and improved performance," says Angelia Herrin, research and special projects editor at Harvard Business Review.
· Executives and staff members enhance their analytical skills.
· Analytics professionals become trusted internal consultants.
· Business users balance analytical insights with managerial instincts.
· Organizations create an analytics ecosystem that promotes transparent decision making.
Aite Group has analyzed analytics as it applies to banks and now offers a "roadmap" for commercial banks becoming more analytic. It's based on a graph where the advancing use of data runs along one axis, and the return on investment runs on the other axis.
As each value increases, Aite sees the analytics maturity curve for banks going up in these steps: Compliant, insightful, productive, pervasive, and finally, governed.
"As accumulators of vast amounts of data on their customers, loans, and relationships, commercial banks must implement a plan that will enable reporting and analysis capabilities to evolve from compliance-achieving tools to capabilities that improve employees' ability to analyze data and make decisions," says David O'Connell, senior analyst and author of the report.
A close look at the chart reveals an obvious but essential factor-speed. The faster a company accepts and adopts analytics in its business processes, the greater the ROI. It's no wonder then that Big Data has taken hold so quickly.
Not only that, but the actual utilization of Big Data/analytics is seen as needing to accelerate. It's a perfectly appropriate technological solution-a business can get better analytics results, and thus profits, simply from faster and faster machines and systems.
Emulex Corp. surveyed 1,529 IT professionals across the United States and Europe and found their main concern is about how to keep pace with the demand for increased throughput on data center networks. It sees server virtualization, cloud computing, Big Data, and the convergence of storage and data networks all coming together.
Astoundingly, this perfect storm of techno-factors will likely lead to, by 2016, most IT departments being able to support computer speeds of 100 gigabytes per second. More than half say that over the next two years, Big Data applications will cause the amount of storage connected to data center networks to increase by at least 50%.
"The fact that data center networks need to keep getting faster isn't news to anyone. But what is amazing is the rate at which the demand for bandwidth is increasing. Today, 40% have already deployed 10 Gbs, and in another four years, the majority of those networks will be operating at 100 Gbs. It's truly unprecedented," says Shaun Walsh, senior vice president of marketing and corporate development at Emulex.
Faster machines are one thing, though. Keeping up with their implementation, uses, distribution, and other factors requiring managerial and leadership decisions is another. Yet another Aite study, this time asking financial services executives about their appetite for emerging technology, has an interesting conclusion. The No. 1 technology factor that keeps them up at night is "pace of change," cited by 18% of respondents, beating out regulatory burden and cost, each of which was cited by 16%.
In this context, pace of change includes the ability to mobilize a complex organization in the face of fast-moving peers and ways to avoid user fatigue in the midst of constantly evolving technology.
"Financial services institutions are waking up to the fact that they are, in some areas, spending too much on supporting an internally built solution that is available cheaper and better on the commercial market. CIOs who maintain their preference to build internally should do a major cost-benefit comparison against the vendor landscape," says Adam Honoré, research director with Aite Group.
And, hoo-boy, has that vendor landscape stepped up to the plate.
· Oracle Financial Services introduced analytical applications for customer insight, which promises to provide a 360-degree view of customer relationships across finance, risk management, and marketing.
"Financial services organizations seek unprecedented levels of customer insight, understanding that it is the key to growth and profitability in today's environment. Many organizations, however, continue to struggle with achieving a complete view of the customer relationship," says S. Ramakrishnan, group vice president and general manager, Oracle Financial Services Analytical Applications.
· FICO debuted analytics-powered marketing solutions for transforming Big Data into Big Marketing. They link predictive analytics, decision optimization, and Big Data, with interactive customer dialog management.
"Modern consumers are exposed to an estimated 5,000 brand messages daily. Marketers need to be much more thoughtful about their marketing campaigns to cut through the noise and connect with their customers in ways that are meaningful to both parties," says Don Peterson, vice president of marketing solutions at FICO.
· Beyond the Arc launched a predictive analytics service for monetizing digital content. Its solution promises to improve the effectiveness of digital marketing across channels, create data-driven customer profiles, cross-sell products to appropriate segments, and use customer feedback and behavioral data to improve products and services.
"Predictive analytics is at the forefront of driving new and emerging business models. The ability to collect relevant data, analyze it, and then turn a number of factors into automated, real-time actionable results, will provide high tech and media companies with new revenue opportunities while effectively engaging and monetizing their existing users," says Steven Ramirez, CEO of Beyond the Arc.
Sources used in this article include:
A Roadmap for Commercial Banks: Becoming More Analytic
2012 Financial Services IT: Appetites and Expectations
Beyond the Arc Launches Predictive Analytics Service for Monetizing Digital Content
Emulex Survey Reveals I/O "Perfect Storm:" Virtualization, Cloud, Big Data, and Network Convergence Initiatives Pressure IT Organizations to Scale Data Center Networks
FICO Debuts Analytics-Powered Marketing Solutions for Transforming Big Data into Big Marketing
Oracle Financial Services Introduces Oracle Financial Services Analytical Applications for Customer Insight
Global survey: Analytics fuels data-driven culture, innovation
| About the Author John Ginovsky is contributing editor of ABA Banking Journal and editor of the publication's TechTopics e-newsletter. For more than two decades he has written about the commercial banking industry. In particular, he's specialized in the technological side of banking and how it relates to the actual business of banking. He previously was senior editor for Community Banker magazine (which merged with ABA Banking Journal) and was a staff writer for ABA's Bankers News. You can email him at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it |
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