Business Analytics and Optimization

by admin on August 16, 2011

Business Analytics and Optimization

In IBM’s first BAO study published in April 2009, they found business leaders to be well aware that they were operating with blind spots. One in three executives told that they frequently lacked information needed to make critical decisions. One-half said they didn’t have access to information required to do their jobs, or close information gaps to reach business objectives. To follow up on IBM’s original findings, in August 2009 IBM surveyed nearly 400 business leaders worldwide about their use of information and the application of business intelligence. By comparing the information practices of top and lower performing organizations, IBM gained insights that they believe they can help organizations achieve their business objectives by BAO.

Recently a trend has started in the industries like Health care, Telecommunication, Banking, Goods Manufacturer, Pharmaceutical, Customer care, Energy sector, US Military department and many other industries to take advantage of business analytics data and take better decision and stay in the market as a top performing organization. An organization can make the best use of analytical data to operationalize decisions and optimize business performance across the enterprise. Analytics describes the use of information to find patterns, identify new possibilities, create scenarios, and make predictions

And prescribe actions. On the other side of the coin is optimization, a process that entails analyzing opportunities and constraints, and then driving decisions about them deep into the organization. But the decisions resulting from those insights bear fruit only when the entire organization gets behind them. By BAO, an organization can get better understanding of their operations and the financial health of their partners, as well as the economic and environmental consequences of both immediate and distant events. The economic and environmental consequence means to predict in an earlier time about the situation of supply chain constraints like the economic condition of partner’s business, how to make economic supply chain purchase, when in the market, there is a lower supply of raw materials, how is the business competitor is moving forward etc. Driven by analytic data rather than basic general knowledge on the subject, organizations can gain speed, agility and timing to execute winning movements. Information makes an organization stay in the front line rather to sit like a back bencher student. The information with quality and trust is the basic of providing analytic information to take a qualitative decision.

Analytical data has a greater impact in the underlying business of the industries. In the Health care industry, the real time analytic data can help in reducing the death of heart surgery patients in the hospitals. The real time BP, Pulse rate, Urine quantity and data from various monitoring device can be stored in the system real time and pattern based analytic data can go to the doctor’s mobile phone immediately when any change happens in the patient’s health condition. By analytic data, a mobile operator company can find the dominant age group’s talk time consumption. The company can select the target market and make effective marketing in the most selling zone. A manufacturing company can make the best arrangement of their distribution centers and reduce the vehicle fuel maintenance cost by getting analytical data. Customer’s desire can be viewed and effective costing can be made to increase sell by the combining the analytical data of product unit price versus product sell rate. The need of raw material, packaging material stock can be forecasted by analyzing the finished product consumption data. In the US Military, they made a strength test on the soldiers at the time of war. They have entered a pill with sensor in the soldier’s body. The electronic sensor in the pill transmits data like the body temperature, heart beat etc to the server. They arranged a dummy combat and the transmitted data were converted into analytical information based on pattern and used to understand the current real time condition of each soldier at the time of combat.

Top performing organizations have achieved the BAO by using several tools. The basic focus of the Business Analytics and Optimization are customer segmentation, demand forecasting, enterprise goal setting, and resource allocation etc. The trend has just started to use the concept of BAO. There are many user groups in an organization. So there are differences in thoughts but the organization will have to implement BAO regardless of economic constraint to get the highest benefit of decision making. The BAO will not only be a strategic improvement, it will also make an organization to achieve higher revenue. Other top-line activities that are likely to receive more attention include: pricing and offer strategies, selecting markets for products and services, lead generation and pipeline management, promotion and offer management, as well as logistics and distribution management. There are programs with greater impact on business objectives. These are: reporting and performance measurement, cost/expense management, risk management, career path and succession management, leadership development, channel management, operational enablement, cost take-out, budgeting and resource allocation. New BAO programs, however, are likely to require that unstructured information – sourced from voice, e-mail and text chats – is gathered, analyzed and integrated to create a continuously updated view of the customer. This view must be current and available whenever and wherever it can support business objectives, whether in sales and marketing, product development, business operations or finance.

At the end I will say that Initially Industries have invested a lot in the ERP or CRM systems where the organizations did not connect with the system properly. Now it is time to implement BAO, become a pioneer in adaption and increase revenue and stay in the list of top performing organization.



1. IBM Global Business Services, Executive Report, IBM Institute for Business Value, Breaking away with business analytics and optimization – New intelligence meets enterprise operations

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