sascom voices

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.”

Even if you aren't in San Francisco tomorrow you can learn about these new rules by following the Twitter hash tag #SASHPCI.

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 fraud in its portfolio from 6.7 percent down to 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. Accounts 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.

The great debate: analytics vs. instinct

kelly.levoyer@sas.com (Kelly LeVoyer, sascom Editorial Director) — Thu, 29 Oct 2009 14:33:00 -0400

Malcolm Gladwell, author of Outliers and Blink, and Tom Davenport, Babson College professor and author of Competing on Analytics, engaged this morning in a debate on a live Webcast onsite at The Premier Business Leadership Series at Caesars Palace, Las Vegas. The theme of the debate is analytics vs. instinct: which works best for strategic decision-making.

I’ll share a few highlights here, captured from our position among the production crew in the control room. (You can view the archive here):
Gladwell’s worry with analytics, though he does value them, is that there is a tendency for people to use them in areas where they don’t belong, and often say that there’s no room for gut instinct. But that doesn’t mean he’s squarely in the “gut instinct” camp. Gladwell says that intuition is most useful in the context of a great deal of expertise, and that expertise is most often grounded in data.

Davenport still countered, however, by stating that analytical decisions have been proven in academic studies as more likely to be correct. Davenport elaborated on the types of decisions or situations that are appropriate for an analytic approach:

When the time demand of the decision at hand is appropriate: you have to have time to gather data, which you can’t do in a rapid-fire situation.
For particularly important problems. It’s overkill to use analytics to decide what flavor of ice cream you want to buy.
When you think the past is a good guide to the future. If for some reason you think it isn’t, analytics are not a very good tool.
If you have to repeat a decision frequently, as in insurance underwriting, you can get accuracy and speed by automating your approach.

Even so, Gladwell challenges that there are applications where analytics simply should not be the exclusive approach. Davenport believes that analytics support better answers to problems. But in the final round, Gladwell offers a one-two punch: Financial. Crisis. Gladwell says that if ever there was an industry in the throes of analytics it was Wall Street last year, where analytics permitted a level of confidence that wasn’t warranted. It was a situation that could have benefitted from someone with some common sense who may have observed that something was very wrong, and they need to depart from what the models were saying.

All in all, a fair fight. But this writer lands in Gladwell’s corner, because how many times has a pediatrician told a mother, when faced with those “mystery” symptoms, to trust herself to know when her child is really sick.

Is it all about the data? What does your gut tell you?

What do hockey and textiles have in common?

Thu, 29 Oct 2009 13:46:00 -0400

More than you think, as reporters at SAS Media Day discovered this week when they attended a panel featuring Bill Nowicki, Director of Ticket Operations for the National Hockey League’s Carolina Hurricanes, and Bobby Hull, Corporate Systems Analyst for textiles giant BGF.

While the aim of the two organizations is wildly different, both use SAS for optimization. The Carolina Hurricanes (2006 Stanley Cup Champions) play in a 18,680 seat venue and use optimization software to calculate the optimal ticket price. While BGF, a leading manufacturer of high-end, high-tech textiles such as the woven fiberglass, Kevlar and carbon used to build planes, uses SAS to determine the best combination of equipment, raw materials and processes to yield the best quality products.

Nowicki explains: "On an annual basis, the Hurricanes’ executive team gets together and tries to determine, based on the previous sales cycle, what the optimal base price will be. We've looked at our promotions we've run previously, and seen how well they fared. But the team lacked a scientific model that could look at those past sales, analyze them and come up with a price that would allow us to maximize revenue, maximize utilization and also keep the team competitive with other entertainment options,” he said.

“We wanted to do that based on more than gut instinct,” Nowicki added.

Similarly, at BGF, optimization software gives the company a scientific way to look at data to determine the best placement of equipment, people and materials. “The raw materials we use are incredibly expensive and we manufacture products at a high rate of speed, so when something goes wrong, it goes wrong really fast and causes a great deal of financial damage,” said Hull. “We can’t afford make a mistake.”

“Optimization has helped us with the utilization of people and resources,” says Hull.

So, what is optimization?
Continue reading "What do hockey and textiles have in common?"

Practical advice for growing an analytics-based culture

Anna.Brown@sas.com (Anna Brown, SAS Communications Specialist) — Wed, 28 Oct 2009 22:26:00 -0400

After attending the "Analytics in the Executive Suite" panel at The Premier Business Leadership Series in Las Vegas, I came away with solid advice for companies looking to grow an analytics-based culture. Guidance came from representatives of companies with a strong analytics infrastructure: Eric Webster, State Farm Insurance; Barbara Pindar, Aeropostale; and Cameron Davies, Disney.

Pindar discussed the need to establish a long-range plan - e.g., what is your end goal, where do you want to be in the next several years? Aeropostale created a three-year plan and is on track. Of course you'll need to tweak it, refine it along the way - but have a compass to set the direction of what you're trying to accomplish.

Also, partner with your technology team. The Aeropostale tech team is very business savvy, and this is critical to its success.

Davies admits that Disney is still learning how to incorporate analytics more heavily across the organization but adds that you need to invest in the right people. Don't cheap out on hiring or the technology for that matter. You need to right tools to make it happen.

Go after the low-hanging fruit, Davies continues. See where you can spend the least and get to market the fastest and build credibility with these wins. They will loosen funding and integrate analytics into the culture steadily.

Webster says to make sure you give the analytics team time to pursue directions that are not driven by the client, because sometimes clients don’t know what to ask for. People on the front lines of analytics will see things that others won’t. They might ask, for example, why doesn’t anyone use this data or look at this? The most interesting projects that had impact were never asked for by clients. An added benefit is that it increases credibility and boosts morale of the analytics group.

The panel then talked about what's next on the docket for their analytics plans.

Davies would like to get a better measurement of creative efforts. He wants to know how to measure whether or not this movie is going to be a hit. Will this creative work? Polyphonics tells you what to tweak to create a hit song, is there a way to do that for Internet content, movies?

Pindar looks forward to delving deeper into predicting the future versus focusing on past events. And Webster would like to optimize marketing spend. He'd like to know how much to put into radio, TV, etc. - one can never get too good at that.

The mother of innovation

kelly.levoyer@sas.com (Kelly LeVoyer, sascom Editorial Director) — Wed, 28 Oct 2009 19:34:00 -0400

At The Premier Business Leadership Series in Las Vegas, Jim Davis, SAS Chief Marketing Officer, opened his presentation with an opportunistic spin: "A good crisis is a terrible thing to waste. Necessity might be the mother of invention, but recession is the mother of innovation."

In November of this year, Peter Drucker would have turned 100, yet his timeless advice still rings true:

Now more than ever, executives must focus concurrently on 3 time horizons:

Make the present business effective.
Identify and realize the potential of the business.
Make the present business into a different business for a different future.

Davis pulls back the covers for the audience to discuss SAS' experience with change and reinvention. "SAS has seen more change in the past 12-24 months than last 30 years. We're in the third phase of this evolution. In our first phase, we were focused on tools and products. From 1976-1995 we were all about creating tools for data access, data mining, operations research. We developed about 200 prods. If we continued along that path, we wouldn’t be here today. In 1995 we recognized the future is in solving business problems so we moved into developing horizontal solutions for CRM, human capital management and IT performance management. Then in 2000, we said this isn't going to last either—this isn't good enough. People need to more fully understand the value of their solutions, which meant going to industry solutions. It took three times longer and a lot more money than we thought, but we did it. So the question becomes: Are you asking yourself whether what you’re doing today is going to take you forward to the next five years?"

That’s where the importance of data and, specifically, business analytics comes into play. Davis harkens back to the conference theme, Innovate and Optimize: "It's not just about best practices, it's about creating new practices, and dealing with the disruption. Business analytics can help create transparency around your risk, and help you minimize it. Many people say optimization is all about cost cutting and reallocating resources. But it’s also about focusing on core competencies." Davis cautions the audience, however, that balance is important:

"Too much optimization may challenge your long-term viability. Don’t strip yourselves down to the point that you can’t sustain your operations or resource the innovation. It's important to maintain a balance between innovation and optimization."

In the context of the economic climate, Davis shares McKinsey research that indicates that businesses are feeling more optimistic in their future planning.
Continue reading "The mother of innovation"

Reporting from the PBLS global economic panel

Wed, 28 Oct 2009 16:18:00 -0400

I just attended the opening sessions of the Premier Business Leadership Series (PBLS) conference in Las Vegas. As with each of the conferences in this series it feels like this is a community that is coming together to seek answers to the tough issues facing business leaders today.

In the first main stage session, a panel of economists, consisting of David Hale, global economic advisor to FORTUNE 500® companies, Gerard Lyons, PhD, Chief Economist and Group Head of Global Research at Standard Chartered and Joseph Quinlan, Managing Director and Chief Market Strategist of Bank of America Global Wealth and Investment Management, was particularly thought-provoking; especially as we continue to work our way through the current economic climate - the first in which we have seen government policy responses at this level.

The panel was bullish for the long term: Within a decade the global economy will have recovered and be in better shape than ever before, but it's going to take time and patience to get there. It will also be a more truly 'globalised' economy.

In the short term, the dollar will continue to be weak, but that isn't going to hurt USA manufacturing and exports, and the medium term may well see export-led growth for the USA for the first time in years. The longer term will continue to see a shift in economic power to those countries with financial and natural resources and the ability to adapt. In any case, whether it is individual companies or whole countries - we should all be preparing now for the recovery that is on its way.

Of course, we will also have to address the issue about how we wean ourselves off the level of public sector spending that has become the 'new normal.' Deficits will have to be cut and that is going to need us all to share a little of the pain of restructuring. Regulation will also have to adapt if we are to avoid falling into the same trap again.

Looks like it is going to be a very interesting couple of days.

Follow SAS events online

alison.bolen@sas.com (Alison Bolen, sascom Editor-in-Chief) — Tue, 27 Oct 2009 15:10:00 -0400

SAS is hosting three big events this week, and you can follow along from your computer through video, photos, blog posts and more. Quickly, the three events are:

SAS Media Day in Cary.
The M2009 data mining conference in Las Vegas.
The Premier Business Leadership Series in Las Vegas.

For SAS Media Day today, my colleagues in external communications are hosting 20 journalists and bloggers from six different countries. Attendees heard presentations this morning from SAS CEO Jim Goodnight and SAS CMO Jim Davis. Customer panels were part of the event too, with panel topics on optimization and fraud detection. You can follow journalist commentary from the event live on Twitter by searching for SAS Media Day. Current interesting tidbits include:

JohnGallant1: From #SAS Media Day. Former G-man describes networked (vs organized) crime. Supply chain of folks involved, from stealing info to using it.
MendezABC11: Discussing business optimization and fraud prevention at #SAS media day. Interesting technological applications.
ESLundquist: #SAS 2009 revenues will be close or surpass 2008 $2.26billion says #businessanalytics SAS boss Jim Goodnight at media day at HQ

The media day panels are being recorded, and I'm told video will be available tomorrow, so come back for that later this week. James Taylor, blogger and decision management consultant, has already posted three entries from SAS Media Day, including this one about SAS customers using optimization.

M2009 is taking place in Vegas today, where hundreds of analysts, statisticians and managers in the data mining field have been discussing business uses of data mining. My colleagues Kelly LeVoyer and Anna Brown will also be recording interviews with the winning poster presentations, which will be available after the event.

Kelly and Anna will be staying in Vegas for The Premier Business Leadership Series later this week, where they'll be semi-live blogging the keynote talks and interviewing some of the customer presenters. Watch for those posts to appear here Wednesday and Thursday. You can also track this event on Twitter and see who's attending on Crowdvine.