sascom voices

Fighting crime with data mining

alison.bolen@sas.com (Alison Bolen, sascom Editor-in-Chief) — Fri, 20 Nov 2009 11:28:31 -0500

The recent article, Data-Driven Crime Fighting in Intelligent Enterprise reminded me of the feature we published in sascom earlier this year from Dr. Colleen McCue, a consultant who specializes in the provision of public safety and national security research, analysis and training.

From the Intelligent Enterprise piece:

If there was a time when law enforcement agencies suffered from an information deficit, it's passed. Of the more than 18,000 law enforcement agencies across the United States, the vast majority has some form of technology for collecting crime-related data in digital form. The biggest city agencies have sophisticated data warehouses, and even the most provincial are database savvy.

From the sascom piece, Criminal Justice in the Post-9/11 Era:

While information sharing requires a cultural change and paradigm shift in the larger public safety community, advanced analytical techniques are available now. The same tools that were being used to prevent people from switching their cellular telephone service provider and to stock shelves at our local supermarkets before Sept. 11 can be used to create safer, healthier communities and enhance homeland security.

George Jetson stops pushing the button

alison.bolen@sas.com (Alison Bolen, sascom Editor-in-Chief) — Thu, 19 Nov 2009 12:00:00 -0500

In September, I published a few posts from the Midwest SAS Users Group (MWSUG) conference, including coverage of presentations from SAS VP John Sall, SAS CIO Suzanne Gordon, SAS Consultant Kirk Paul Lafler and JMP Marketing Director Jon Weisz.

Now that the MWSUG organizers have published the conference papers online and announced the best paper winners, I want to highlight my favorite talk from the conference: Revolutionary BI by Charles Kincaid.

Charles, an Engagement Director at COMSYS, describes the ways he thinks analytics and business intelligence will be used and shared inside organizations in the future, and I think even George Jetson's employer Spacely Sprockets could benefit from his ideas.

If you've ever wondered how Web 2.0 will affect reporting and analytics in the future, Charles lays out the most comprehensive predictions I've seen yet. He looks beyond social sharing features like those you find on Facebook and Twitter, and describes intelligent reporting systems that will recognize common users of single data sources and allow report users to favorite or suggest changes to reports that are created by other users.

In addition to the MWSUG talk, Charles has presented his paper at other conferences, including SAS Global Forum 2009 in Washington, DC. In fact, he says his presentation at SAS Global Forum inspired one conference attendee to try some of Charles' ideas in his own banking organization, and that user is now presenting his results at SAS conferences too.

Read the full paper to understand Charles' vision for the future of business intelligence. Maybe you'll be inspired too.

New emphasis for good old Balanced Scorecard?

diane.lennox@sas.com (Diane Lennox, PR Services, SAS) — Tue, 17 Nov 2009 10:17:00 -0500

Performance Management expert (and SAS product marketing manager) Gary Cokins blogs regularly here at SAS on the latest developments in enterprise performance management. We always look forward to his insights and interesting take.

Just back from the Palladium (formerly Balanced Scorecard Initiative) 2009 Americas Summit, Gary noticed three major shifts in balanced scorecard messaging - particularly as articulated by balanced scorecard co-creators Dr. Robert S. Kaplan and Dr. David P. Norton and analyst/advisor Howard Dresner. Gary summarizes them as:

Institutionalize BSC with software automation

Create a culture for alignment of strategy to operations with metrics

Apply business analytics to optimize

Click over to Gary's blog for details, and stay tuned to find out how he feels about the shifting sands.

Communications’ innovation killers

Mon, 16 Nov 2009 08:42:00 -0500

“We’re acting as the post office for Netflix, so why don’t they pay us for movie delivery?”

Think about that quote from a telecom industry exec for a minute. Netflix pays the post office to deliver DVDs to consumers. If the same movie reaches the consumer as streaming video over the Internet, Netflix doesn’t pay the communications service provider for the broadband connection. Executives of leading communications service providers claim this is not fair.

Over barbeque at the CTO Telecom Summit in Scottsdale, AZ, these executives shared a variety of revenue-generating ideas and their frustrations with the status quo that is stifling innovation and revenue growth. Among the innovation killers discussed at dinner and throughout the summit, I will recount only the top five:

1. Network constraints: demand outpacing supply. The most obvious of all strangleholds: We know that the demand for ubiquitous wireless broadband is rising and will continue to increase. Spectrum availability, network capacity and 4G technologies won’t be available to consumers soon enough to meet the insatiable demand. Once these constraints are diminished, convergence can take on new forms – from three screens to one. The growth and complexity of applications and variety of data traffic (including pictures and video) can progress at the will of the consumer unimpeded.

2. Absence of the new revenue model. The uncertainty of future revenue growth can restrain innovation as service providers struggle to cut costs to stay competitive. This Yankee Group chart shown at 4Gworld sent a simple message, with a chilling implication. Data volumes will increase, but associated revenues will not. Voice has the higher profit margin, but the volume of that traffic is not expected to rise (nor is its revenue, I imagine).

How and for what will service providers charge in order to make money? Take a look at the table: Should carriers begin charging “download postage”? No one wants to be the first to begin charging for new and enhanced services, but few options remain. The challenge for providers will be to differentiate on unique value, not price.

3. Business transformations that erode core and distinct competencies. Capital investments often dictate the terms of innovation. Business transformation (outsourcing, mergers, acquisitions, partnerships) is another way to differentiate and compete successfully. Done well, outsourcing can help an organization focus on core competencies and discover opportunities for innovation. Similarly, strategic partnerships and mergers can help build on the strengths of the providers to expand the value proposition for their customer base. But changing the business can negatively affect the value proposition. Selecting only the most appropriate operations to outsource, companies to acquire, etc. is critical. Changes may save money in the short term, but if outsourcing involves releasing control of a core competency, it could undermine the most important provider asset: the customer’s loyalty.

4. Lost leadership and vision amid short-term cost cutting. It’s a critical time for service providers. At the CTO Telecom Summit, we heard many stories of consolidation, virtualization and outsourcing as a means to reduce costs. After attaining a short-term goal of reduced costs and overhead, what is the plan for top-line revenue growth? Leadership is the source creativity and innovation. Leaders articulate and evangelize the company’s vision, spark needed cultural shift and unify amid changes. Lack of leadership can lead to dissatisfaction and uncertainty for all stakeholders. Stability concerns could shift strategies to defensive and commodity positions versus a value-based position designed to differentiate and excel among competitors.

5. Silo-driven approach leading to lack of customer intelligence. Which customers and services yield the most or least profit? Which products and services should I cross-sell to which customer segments? In the peer-led roundtable discussion facilitated by SAS CIO Suzanne Gordon, Kathy Romano, Executive Director of Revenue Assurance and Billing from Verizon Services Operations, shared her vision of a holistic customer view and the challenge of data quality. Other participants lamented the inability to obtain a customer view across departments and service lines (such as between wireless and wireline divisions). Another wished for a view of service use by customer segment. But multiple customer data warehouses, silos of information and competing strategies across service lines and divisions prevent a more strategic, holistic approach to delivering customer value. Without understanding the customer, how can service providers develop and deliver innovative products and services?

Next year around the barbeque, I wonder how much will have changed. Will the promise of ubiquitous broadband be closer to reality? Will there be more market consolidation? Will new leaders have emerged? Will divisions collaborate and share customer information? Will Netflix pay for delivery? Let’s see …

Just in time to stand in line, empty handed

matthew.mikell@sas.com (Matthew Mikell, SMB and SaaS Product Marketing) — Fri, 13 Nov 2009 12:28:00 -0500

The announcer on the radio tells me that we've started the "unofficial" shopping season for Christmas. For many consumers, this news conjures thoughts of vast parking lots filled with cars, longer checkout lines, out of stocks, and reruns of those classic Christmas programs. It's not all bad, though, is it!?

Unrelated to my personal shopping expectations, I was also reviewing research on retail technologies when I came across a 2008 report called "Retailer's Guide: 2008 POS Software for Softgoods Retailers" by IHL Group, based in Franklin, TN. Published on Aug. 8, 2008, the report highlights the point of sale leaders as well as citing other trends impacting the industry. As you might expect, there is a section on key trends effecting retailers, including economic conditions, pricing pressures, rising labor costs, internet use, share-of-wallet and terrorism.

Here is the part that caught my attention. "...consumers asked about things that bug them most about shopping, #1 on the list is standing in line and #2 is frustration caused by not being able to purchase a product the store is expected to have or has promoted in an ad." Retailers, both large and small cannot control economic conditions, rising labor costs, internet adoption, or terrorism. What they can control is the consumer experience within their store and that is what makes the IHL Group findings more unique. There's more.

Continue reading "Just in time to stand in line, empty handed"

Analytic truths or analytic myths?

alison.bolen@sas.com (Alison Bolen, sascom Editor-in-Chief) — Wed, 11 Nov 2009 16:47:00 -0500

Over at The Data Mining Research blog, Sandro posted a link to the presentations from a recent SAS Forum Switzerland. While browsing the presentation slides, I came across this great list of questions from a UBS presentation by Daniel Rüegge, Head of Business and Client Analytics.

Daniel calls these the top 10 paradigms in analytics to be questioned and asks, "Are they true? Are they of help? How do you apply them?"

What do you think? Which of the ten are true, and which are complete myths?

To make analytics successful, the CEO has to have a personal interest in it.
Analytical organizations have to be positioned in a central high-power position.
Every company in a competitive environment needs analytics to be successful.
Analytical expertise can/cannot be out-sourced/in-sourced/off-shored.
Getting data and technology in place is a long and cumbersome process.
Without data and technology you cannot do analytics.
Analytics is a thing mainly insiders and experts understand, and vice versa.
Communication of analytics is more important than analytical people think.
Analytics only should do things which have a measurable impact.
Analytics mainly is applicable in retail/standardized environments.

Mother's Day no longer matters

Tue, 10 Nov 2009 14:35:00 -0500

Yannick Noah was the last Frenchman to win the French Open men’s singles title. That was in 1983. This past summer, that long streak was in jeopardy as Parisian Gaël Monfils advanced to the quarterfinals. His opponent at Roland Garros would be the great Roger Federer on the afternoon of Wednesday the 3^rd of June. Important sporting events usually happen at night or on the weekend to draw the largest television audience. But this match took place in mid-afternoon on a weekday - when most Parisians were miles from their television sets. The parks, restaurants, and coffee shops of Paris filled with people watching the match on iPhones or other smart-phones. France’s Orange network carried more traffic that day than any previous day, thanks to all that streaming video.

That story was told by Vivek Badrinth; EVP Networks, Carriers, Platforms, and Infrastructure for France Telecom Group; at the Wireless Influencers conference in San Diego last month. Mr. Badrinth says we live in a time of “paradise for network planners” because no one with good network planning skills will be without work for many years to come.

Not very long ago, Mother’s Day was the most important day of the year to telecom network planners. Everyone calls Mom, so the number and duration of calls was higher than on any other day. Network planners could forecast the demand and plan to have plenty of capacity so that Moms were not disappointed. If network planners messed up, well they had 365 days to get ready for the next year. Now Mother’s day is just like any other day for network planners. They call their Mom just like everyone else, but their job is not complicated by all these voice calls. Voice calls are now just a fraction of network bandwidth. They are also very predictable compared to data traffic, especially streaming video. Sorry Mom, you are still special - but your day isn’t.

Network bandwidth goes through cycles. Sometimes, technology advances very fast and we have a glut. This happened early in the decade when predictions about Internet demand were overly optimistic and too much fiber optic cable was in the ground. Many firms went bankrupt and customers enjoyed cheap prices. During a glut, it is more economical for customers to add bandwidth than to carefully manage what they’re using. At other times, users demand bandwidth more quickly than network operators can deploy it. Regulators often compound the shortage because things like spectrum reform take a long time to enact. Now, wireless networks are entering a period of capacity constraint. Customers are in love with iPhones and Blackberries, and a steady stream of data-hungry mobile devices and applications are targeted at consumers.
Continue reading "Mother's Day no longer matters"

Marketing ROI in San Francisco

alison.bolen@sas.com (Alison Bolen, sascom Editor-in-Chief) — Mon, 09 Nov 2009 15:42:00 -0500

The customer intelligence event that I attended last month in Boston is making a stop in San Francisco tomorrow. The morning briefing includes a presentation from Forrester Analyst Surresh Vittal, followed by a panel discussion featuring Vittal, HP VP of Customer Intelligence Prasanna Dhore and Stanford University Graduate School of Business Professor James Lattin. Deb Orton, SAS Marketing Director, will be moderating the panel.

In Boston, discussion topics included:

New rules for marketers.
Analytics that start with the customer.
Changing economy = changing priorities.
Engaging the customer online and offline.
Optimizing for success.

The opening talk from Vittal presents relevant statistics that reveal the changing roles of marketers. Vittal has practical advice for how to approach the change strategically and realistically.

At the Boston event, Vittal said marketing is undergoing a massive transformation, but most marketers are still playing by the old rules.

Analytic translation

alison.bolen@sas.com (Alison Bolen, sascom Editor-in-Chief) — Wed, 04 Nov 2009 16:54:00 -0500

I love this idea of the analytics community being the "translation layer" within an organization. Customer Lori Bieda introduced the concept in the fourth quarter 2009 sascom column, Lost in translation:

For large organizations with many lines of business and deep, rich databases, making sense of information has become a business itself. What is needed now is a “translation layer” to ground businesses in fact-based decision making. The analytics community is ideally positioned to become the translation layer.

Bieda, who leads a team of 80 analysts at Canadian bank CIBC, explores this idea further in the new white paper, The Translation Layer.

The paper includes a useful chart defining and describing three roles for analytic workers in the tranlation layer:

Analytics Community as SERVICE PROVIDER: Facilitates execution of analysis and research for the organization and provides analytical support to enable business decisions.
Analytics Community as CONSULTANT: Acts as a centralized hub for all analytics and research knowledge and expertise in the organization and facilitates best practice information exchange related to that expertise.
Analytics Community as BUSINESS DRIVER: Leverages domain expertise in analytics and
research, combined with business knowledge, to filter, challenge and prioritize incoming requests for the benefit of overall business.

Which of these roles sounds familiar to you? Does one of them fit your job description? Or does your organization still need to create a translation layer?

Uneasy bedfellows: analysis and intuition?

Fri, 30 Oct 2009 14:46:00 -0400

Yesterday at The Premier Business Leadership Series, I had the tremendous pleasure of attending the panel debate Balancing Intuition and Analytics in Decision Making. The panelists were: Malcolm Gladwell - Best-selling author of Outliers: The Story of Success, Blink and The Tipping Point; Tom Davenport - Best-selling author of Competing on Analytics: The New Science of Winning and President's Distinguished Professor at Babson College; and Thornton May - Futurist, Executive Director and Dean of the IT Leadership Academy .

The panel continued a discussion that Malcolm had introduced in his keynote address earlier about Judgment - the ability to make decisions in seconds based on the acquired experience of years of practical application (or the 10,000 hour rule - the amount of time it takes to be truly great at something). As an aside, I really wonder about this - why are there so many young successful people if you need a minimum of 10 years of experience; are they drawing on something more than just experience or raw talent?

At first glance, you would expect the panel to split pretty firmly into two camps: The "experience is king" camp led by Malcolm and the "you can't get enough data" camp led by Tom and Thornton. But what struck me as interesting was actually how close the two camps were: Malcolm admitted that experience needs feedback to be valuable (feedback from objective business analytics for example) and Tom and Thornton acknowledged that Analytics needs interpretation and judgment to put information into context and to formulate an appropriate response. As I paraphrased in Thornton's lunch, business analytics is the most powerful form of business decision-support not decision-making. In my opinion, when you get the mix of education, experience and (reliable) information right, you release executive creativity, not constrain it.

What they all agreed upon was that there has to be a greater understanding of the power and limitations of analytics in the boardroom - there are too many executives who are woefully underestimating or overestimating what can be done with these powerful tools. As the panel agreed, models don't kill businesses; fools with models kill businesses. On the other hand, what can't experts with models achieve?

Anyway, the panel was incredibly stimulating, all three panelists were insightful, funny, engaging story-tellers who could really get their points across and set us up for the afternoon Executive Workshops (I was in Thornton's). Although I must admit to some bias (Malcolm would pick me up on that anyway). I have to admit that, all things considered, this has been the best PBLS so far. If you were one of the unfortunate people who missed the conference (shame on you), I strongly recommend you visit the main site - the keynote sessions and panels were filmed and will be available as streaming video.It's not the same, but you would do yourself a disservice by not taking advantage of it.

Here's looking forward to the next event in the series in mid-2010 in Europe. I hope to see you there.

You become the hunter and they become the prey

alison.bolen@sas.com (Alison Bolen, sascom Editor-in-Chief) — Fri, 30 Oct 2009 07:17:00 -0400

Is it even possible to reduce fraud? This pointed question was asked Tuesday at the SAS Media Day fraud panel. After all, today’s fraudsters are smart, global, networked and hi-tech. As soon as you catch one, another steps in. And once you put a system in place to combat a certain type of fraud, a whole different type of fraud appears that you probably never anticipated.

“Fraudsters are very much like a pack of wolves,” says Chris Swecker, corporate security expert and former Assistant Director of the FBI. “And the financial institutions are the prey: They’re really trying not to be the next victim, and they’re trying to outrun each other or hide the best they can.”

But it doesn’t have to be that way. “I think those roles can be reversed,” says Chris. “With the help of analytics designed to look at ring-related network activity, you become the hunter and the fraudsters become the prey.”

Rex Pruitt, a Business Analyst at PREMIER Bankcard LLC, agrees that it is possible to reduce fraud, and he has the numbers to prove it. Using predictive models to anticipate fraud activity before it occurs, his organization reduced the rate of application fraud in its portfolio from an estimated 4 percent down to an estimated 3 percent.

“That equates to about $9 million in total revenue to the company,” says Rex. “You gain a lot by being able to identify those fraudsters.”

How does it work? The predictive model identifies fraudsters with a score during the application process. Applicants identified as fraudulent are eliminated from the portfolio before the bank has even incurred the cost of fraud. Rex says early identification can also free up volume capacity, so the bank can bring on more good applicants.

To build on the type of analysis PREMIER is already doing, Chris Swecker suggests banks use network analysis to identify rings of fraudsters that can be observed in the bank’s data. “You’re not going to eliminate fraud – but you can create better deterrents and a much higher risk environment for fraud,” he says. ” What I advocate, and the record is very clear: the way to get at financial crimes is to look at them, address them and detect them as a network.”

Chris worked with a large, international bank on a networked fraud detection project using SAS and was able to identify 40 new fraud rings almost instantly. “We had billions of transactions, hundreds of thousands of customer accounts, and myriad of products and services. SAS provided a way to look at the data and see the broad network activity that’s going on using our own data.”

Chris says there’s a clear supply chain that you can see when investigating networked crimes, especially with Internet crime: You have individuals that steal and sell the data, buyers who usually resell it, and eventually the data makes its way to the people who exploit it by manufacturing credit cards and debit cards, which then pop up somewhere in the hands of someone committing the detectable fraud act.

“I’m careful not to use the word ‘organized crime,’ because it’s ‘network crime,'’’ says Chris, and there's a difference. “It’s not like a hierarchy with a crime boss on top and layers below him in an org chart. Fraud networks are spidered out. It is a network, and we ignore the network at our own peril.”

Hear more from Chris and Rex – and learn about SAS fraud solutions by visiting the Media Day press kit or watching video snippets of the panel discussion by topic area:
Continue reading "You become the hunter and they become the prey"

James Taylor's take on why analytics matters

diane.lennox@sas.com (Diane Lennox, PR Services, SAS) — Fri, 30 Oct 2009 00:55:00 -0400

Decision management expert James Taylor wins the prize for most prolific blogger from The Series.

James gives us thorough summaries of great presentations on:

Balancing Intuition and Analytics in Decision Making.
Analytics & Innovation, Analytics in the Executive Suite.
SAS Media Day customer panels on fraud detection. and optimization.

By the time you read this, there will likely be more.

Fun with Fraud? TK George makes it tasty, sharing highlights from SAS Media Day and expert panels on fraud

diane.lennox@sas.com (Diane Lennox, PR Services, SAS) — Thu, 29 Oct 2009 16:39:00 -0400

Analytics maven (and SAS product marketing manager) Tammi Kay George hosted the panel on optimization that Anne-Lindsay Beall wrote about from Monday’s international SAS Media Day, which preceded The Series in Las Vegas (as it does every year). If you read TK's blog, you know that Tammi Kay's insights on analytics have a flavor of their own that spices up any topic.

Don't miss her post, Optimization, Fraud and a fun SAS Media Day, which includes videos of her panel and the subsequent discussion on fraud detection and prevention between Rex Pruitt from PREMIER Bankcard and Chris Swecker, former G-man and corporate security expert.

Behind the scenes at PBLS

kelly.levoyer@sas.com (Kelly LeVoyer, sascom Editorial Director) — Thu, 29 Oct 2009 16:33:00 -0400

One of my favorite opportunities at business conferences hosted by SAS, like The Premier Business Leadership Series, is when I get to take a break from the crowds and spend some one-on-one time with a customer.

We escape into a quiet room to discuss, on video, their trials and tribulations with applying business analytics to address challenges in their organizations. Whether they're trying to find better ways to retain their best customers, improve their marketing campaign results or prevent fraud, each customer has a unique story to tell.

For Glenn Snyder of Visa, the story is all about profitability--how to apply analytic models to help identify the cost drivers that impact Visa's bottom line. He also spent some time with us at a focus group where we discussed ideas about networking and how to take advantage of media opportunities that SAS brings their way.

Snyder was a real pro in front of the camera, he's obviously very passionate about profitability--a good thing for Visa. His story will appear later this year on the SAS success stories site.

From Customer Intelligence to Penn & Teller-gence: amazing secrets revealed at M2009, The Series – Las Vegas

diane.lennox@sas.com (Diane Lennox, PR Services, SAS) — Thu, 29 Oct 2009 16:16:00 -0400

I’m jumping in here to keep the blog balls in the air. With The Premiere Business Leadership Series in Las Vegas in full swing, there’s so much great material to share. We’ve tasked communication team members at the event with capturing and sharing as much of the great insights, advice and best practices we can with those who couldn’t attend.

But let’s not overlook what others are finding interesting enough to share. Stacey Hamilton has been providing day-by-day highlights from M2009, and The Series. Her reports and reflections are on the SAS Publishing blog. M2009 is the world's largest data mining conference.

When not busy giving away books, having her photo taken with Penn, and pitting Bobby Flay against Joe’s Seafood and Prime Steak, Stacey writes about some of the really smart people sharing their expertise, including SAS Press authors Randy Collica and Bobby Hull (not the hockey player, the optimization expert). Take a minute to check her videos, photos and other links.