Buildingananalyticscoeworkshop2013 07-20-130723121104 Phpapp01

Building an Analytics CoE
Rahul Saxena
Workshop at IIM Bangalore

July 20, 2013
This presentation is based on the material available in the book:

Business Analytics: A Practitioner's Guide by Rahul Saxena & Anand Srinivasan
Springer International Series in Operations Research & Management Science
http://www.amazon.com/dp/1461460794
Agenda
Introductions about the group, about me. What is "analytics"?

What is an "Analytics CoE"?
What does the organization want to do with analytics? What is the
role of the CoE that they envision?
What is the organizational context? Current providers of analytics?
Leadership support?
What will the Analytics CoE need to be like (now and in the future,
up to the planning horizon)?
Where do we stand with analytics capabilities now, compared to
what we need?
How will we evolve the CoE? Set expectations, drive the evolution,
establish the value.
Confidential CobotSystems.com 2
About the group
Demographics STUDENT WORKING TEACHING Perspectives PROVIDER CONSUMER
Full-time Currently Currently Consumed
Provided analytics
student, 0-5 working, 0-5 teaching, 0-5 analytics from
0-5 Years years of years of years of
ANALYTICS as an analytics
professional
professional
experience experience experience analytics provider
Consumed
IT Provided analytics
5-10 Years as part of an IT role
analytics from IT
(BI, DW) provider
Provided analytics Consumed

10-20 Years BUSINESS as part of a analytics from
business role business provider
OTHER Provided analytics

Consumed
as part of an
>20 Years (Academic, academic or other
analytics from
etc.) other provider
role
Business
Analytics
4
Now Cobot Systems

Management
2013 Cisco
Analytics
2012 Cisco
2011 Cisco
2010 Cisco
2009 Cisco
2008 McAfee
2007 McAfee
2006 Epiance
2005 Epiance
2004 IBM
Management
ERP, e-Biz,
2003 IBM
Consulting
2002 IBM
US based
CRM
2001 IBM
2000 IBM
Architecture
Business
1999 IBM
1998 IBM
1997 IBM
1996 Laitram Corp
1995 Laitram Corp CobotSystems.com
1994 Tulane MBA
1993 Tulane MBA MBA
1992 Indian Railways
Mgmt
Engineering

1987 SCRA Jamalpur
1986 SCRA Jamalpur
1985 SCRA Jamalpur
1984 SCRA Jamalpur
1983 IIT Kanpur
1982
1981
1980
1979
1978
1977
1976
A timeline diagram
1975
1974
About me
1973
1972
1971
1970
1969
Confidential
1968
1967
1966
1965
What is analytics?
Strategy &
Biz Ops Planning Finance
(SCM, CRM, Planning &
Svc, etc.) Analysis
Industrial
Engineering 6 sigma,
Quality, Lean
Operations
Research ANALYTICS
Statistics
Business diverse
Strategy Business antecedents
Intelligence
Computer Management
Psychology Information
Science
Systems
What is analytics used for?
Frame
Inform
Forecast
Deliberate
Recommend
create value by
driving decisions from
idea to execution
What methods/techniques does analytics use?
ILLUMINATE DIAGNOSE FORECAST OPTIMIZE MCDM, etc.
Charts & Tables in Reports & Dashboards

Alerts, Visualizations, and Simulations
Analysis, Interpretation & Recommendations
Multi-Criteria Decision Models (MCDM), etc.
use any method

that helps to drive
from idea to execution
What data does analytics use?
TRANSACTIONS CONVERSATIONS OBSERVATIONS
Structured Unstructured Sensors & Signals (M2M)

ERP Documents Scans (Bar-codes, RFID,
CRM Websites proximity, etc.)
HRMS Social Media sites like SCADA (Control Systems)
Facebook, Twitter, Temperature, pressure,
LinkedIn, YouTube, illumination, etc.
Blogs Location (GPS, etc.)
Smart-phone data feeds
use any data as Network monitors
needed, internal & Video feeds
external
What domains is analytics used in?
Verticals
Telecom, High-Tech, BF&S, Oil &
Gas, Healthcare, Government, etc.
Decision Layers
Strategy, Capacity, Scheduling, Execution
use wherever there

Functions
Marketing, Sales, e-Commerce, Fulfillment, is a need for making
Supply Chain, Product Lifecycle, Strategy, rational decisions
Finance, etc.
What systems/tools does analytics use?
IT
Data Warehouses, ETL (Extract, Transform, & Load)
Business Intelligence (Dashboards, Reports, Self-service)
Big Data
Business
EPM, Collaborative
Decision Making,
Decision-Support,
Alerts & Feedback use whatever
Analytics
Innovation: from idea to value tools are needed
Operations: continuous value realization
a working definition
Analytics is used to
create value by driving
decisions from idea to
execution
use any method use any data as use wherever there use whatever
that helps to drive needed, internal & is a need for making tools are needed
from idea to execution external rational decisions
Applies insights to data to produce analytics deliverables and drive business value
Drive
Business
Value
Variety Variety of
of Data Deliverables
Sources Process
for various Business
System Decision Decision Contexts &
&Errors Data
Support Processes
Skills
New Knowledge
sources New
& errors Opportunities
& Issues
New
insights
Variety of Analytical Insights

Agenda

Leadership support?
what we need?
What do leaders talk about when they talk of analytics?
Current Supply Demand
How should we manage Why do we need so many

State
analytics investments to reports? Why does it take

gain efficiency? so long or cost so much?
How can we develop What can analytics do to

Future
State
analytics capabilities to improve our business

meet demands? My peer results? Beat the
has this, I want one too! competition?
What do the leaders want to do with analytics?
FOR WHOM?
The CEO asked for it for whom will you
The CIO has plans for it create value?
XYZ business leader wants it what decisions will
Strategy & you drive?
Planning
Biz Ops do the current
(SCM, CRM, Finance decision-owners think
Planning &
Svc, etc.)
Analysis youre helping?
What decisions will you drive with analytics?
Analyze contract renewal Finance

Planning &
data to find opportunities Analysis
Feed the workload (renewal

opportunities) to Sales Sales Ops
Schedule follow-ups by the

Call Center
Sales Call Center Ops
Get the renewals, improve

Call Center
renewal rate Ops
Answer the what, enlist the who
Strategic Bookings Talent & Revenue
Account Trend Skills Gap
Analytics Analytics Analytics Analytics
Opportunity
Bookings Backlog Delivery Revenue
Pipeline
Deal P&L Resource Delivery Revenue &

Impact Planning Optimization Cost
Analytics Analytics Analytics Alignment
get clients by offering business value

Deal P&L Protect margin using deal analysis
PROJECT Impact
Analytics Improve quality of business by targeting deals
Analyze each deal for timing of costs (COGS Q1 Q2

& PCOGS), revenues (milestones), & risks M1 M2 M3 M4 M5 M6
COGS $33 $33 $33 $33 $33 $33
(e.g., pay per SLA); assess FMV and VSOE PCOGS $21 $21 $21 $21 $21 $21
impacts; calculate deal impact on the P&L COSTS $54 $54 $54 $54 $54 $54
Plug-in deals pipeline into the P&L projections, DELIVERY HLD LLD NRFU
METHOD provide updates based on actual deals and REVENUE $50 $270 $310
run-rate
Q1 Q2 Q3 Q4 Full Year
Work with Geo leaders to drive decisions to PROJECT MARGIN ($8) $34 $56 $43 $125
improve the Sales P&L P&L IMPACT -1% 4% 7% 5% 4%
Approve or modify deals based on insight Improved

into P&L impact
Deals
P&L P&L
DECISION Deal targeting to actively manage and Analysis Control
improve the Geo P&L
Geo P&L Owner Geo Finance Lead

OWNERS Geo Vertical Leads Geo Sales Ops Lead
also track costs & value keep clients by delivering business value
What is the role of the CoE that they envision?
provide us the analysis, help us throughout the idea

we promise to use it to to execution cycle to deliver
create business value business value
provide us decision advice
based on analytics
Agenda

Leadership support?
what we need?
What is the organizational context?
Analytics Relevant
Suppliers DRIVE
Providers True (data is DECISIONS
correct, models
are verified)
Actionable
(provides the
Substitutes
basis for
specific action)
Meetings (with customers, suppliers,
project teams, colleagues, etc.) apply the noise filter
Walking around, observing
Mass media (Newspapers, TV, etc.)
Internet, Books, Gut Feel, etc.
What do analytics deliverables look like?
Deliverable Communication
Messages (email, SMS) to

Inform & Recommend
Documents (Reports,
Dashboards) to Inform,
Forecast, & Recommend
Decision Explorers to
Frame & Deliberate
Where will we find Analytics Providers?
Analytics providers are

found in many places, it
helps to cluster them
into these five domains
1. Business: managers
and their assistants
2. Analytics: analysts in
analytics teams
3. IT: in the BI, DW, or
Reporting teams
4. External BI Providers
5. External Analytics
Providers
Who are the current providers of analytics?
Leader & Data Providers Noise Filter Analytics

Department Providers
Tom, VP, Sales IT, BizA-CoE, Jack, Director Sales Jack, Director Sales
MktDudes.com Ops Ops, MktDudes.com
Jim, VP, Engineering IT, PLM-Specialists.com PLM-Specialists.com Mary, PLM Manager
Harry, CFO BizA-CoE BizA-CoE BizA-CoE
Leadership support?
More
0% to
than Reduce
Learn & +10%
10%
Ingrain
The size of the bubble
Decision denotes $ funding
Models Jim The color of the
DEMAND
bubble denotes growth

Data
Oriented Harry
Consistent
& Disciplined Tom
Inconsistent
Decisions
SUPPLY
Not Data Trusted & Decision Decision
Used Provider Relevant Modelers Advisors
Agenda

Leadership support?
what we need?
Analytics Provider Network
The analytics function

cannot be the locus of
all the analytics assets
(and talent) for the
organization it is,
instead, a capability that
enables the effective
use of analytics
understand the
network, figure out your
partnering strategy
Enable the Analytics Network for the organization
CRM Sales
(IT) Ops
BizA D2
DRIVE
BICC CoE
(IT)
DECISIONS
Dir
FP&A
SAS
ERP
(IT)
IIM B
Is analytics
everyones job?
PLM Isnt it?
PLM.com Mgr
Zoom out of the centralized / distributed / hybrid debate its a network

Enable the Analytics Network for the organization
Shared Data in an Agile Data Platform, Rapidly Extensible Data, in context
Relevance & Trust built into Deliverables via a Rules-base Relevance
Decision Models built and provided where Relevant Data-driven Decisions
Learn & Ingrain, rapidly adapt/evolve all layers Adapt & evolve
Provide the analytics platform to enable everyone in the network

make analytics work for your organization
Where is the bottleneck? Demand or Supply?
Demand is a function of leadership
& imagination: stimulate the
imagination, deliver successes,
make analytics accessible with a
clear business value proposition
transform the organization
culture to use analytics
Actual demand = Low
Potential demand = High
Actual supply = High
Potential supply = Low
... align supply to demand

Align supply to demand, and also stimulate demand
Not Data Trusted & Decision Decision
Used Provider Relevant Modelers Advisors
stimulate demand:
Tom Tom in-house successes,
industry examples,
Jim Jim conferences, peer-to-
peer networks,
Harry Harry decision advisors
SUPPLY: Processes, Skills & Systems
Shared Data, Agile Data Platform
Relevance & Trust

provide the
analytics platform
Decision Models
Learn & Ingrain

Analytics Network dynamics
Nodes Evolve: Mature, Add, Re-organize, Disappear

Deliverables Evolve: Innovation Operation
Data Evolves: Federate the data to keep pace
Platforms Evolve: Avoid obsolescence, embrace agility
Talent Flows: Enable people with career paths
Funds Flow: Manage funding for nodes & the platform
Develop new insights & concepts

Drive from Idea to Execution
INNOVATE
Assess value & need
Explore and Fail-fast
INNOVATION: TALENT-DRIVEN
OPERATIONS: PROCESS-DRIVEN
Work with data providers to improve data
Drive value realization through analytics usage
CULTIVATE Ensure ongoing validity of the analytics
Provide analytics deliverables per SLA
Continual creation of Analytics Deliverables

Continual assessment of Data & Model Validity
EXECUTE Continual governance of Policies
Continual monitoring of Usage
100% Innovation
The suppliers dilemma: the more useful analytics

1-time Always you produce, the more you get mired in repeat delivery
Junk which is valuable repeat business but boring work
Useful Useful
Total Repeat Capacity New Delivery
Capacity Delivery for New Junk 1-time Useful
TIME
1 100% 0% 100% 80% 16% 4%

Repeat 2 100% 4% 96% 77% 15% 4%
3 100% 8% 92% 74% 15% 4%
Operations 4 100% 12% 88% 71% 14% 4%
5 100% 15% 85% 68% 14% 3%
6 100% 18% 82% 65% 13% 3%
7 100% 22% 78% 63% 13% 3%
Repeat 8 100% 25% 75% 60% 12% 3%
9 100% 28% 72% 58% 12% 3%
Operations 10 100% 31% 69% 55% 11% 3%
11 100% 34% 66% 53% 11% 3%
12 100% 36% 64% 51% 10% 3%
13 100% 39% 61% 49% 10% 2%
14 100% 41% 59% 47% 9% 2%
over time, the operations workloads pile up 15
16
100%
100%
44%
46%
56%
54%
45%
43%
9%
9%
2%
2%
this is a mark of success: your stuff is useful! 17 100% 48% 52% 42% 8% 2%
18 100% 50% 50% 40% 8% 2%
manage it with automation
Agenda

Leadership support?
what we need?
Analytics roles and functions
Agile & Production Analytics: Innovation & Operation
Workloads: what do your "Analytics" people do?
Strategic Scorecards, Metrics Portfolios, & Scenarios
Reports & Commentaries; including Forecasts
Consultative Analysis Projects (Stats, Optimization, Simulation, etc.)
Enterprise Modeling, Business Modeling, Industry/Market Analysis
Data Stewardship (Assess, Cleanse, Enrich)
Business Case Modeling, Business Value Analysis, Valuation (Financial)
Dashboards
Governance Meetings & Follow-ups
Target, Actual, Outlook, and Revision
Alerts & Follow-ups
Communication & Driving Adoption of Data-driven Management
o Frame the Decision Need

o Generate Ideas
o Support Decision Making
o Monitor Execution
o Drive Results
Techniques: what methods & techniques do you use?
Regression & Correlation
Propensity Models (Logistic Regressions, Multinomial Models)
Statistical Hypothesis Testing
Forecasting
Clustering and Segmentation
Optimization (LP, NLP, etc.)
Sampling & Surveys
Benchmarking
Pricing Optimization & Revenue Management
Design of Experiments
Financial & Risk Management
Search & Search Optimization
Queuing, Simulation
Statistical Process Control (R Charts, P Charts, etc.) o Frame the Decision Need
Planning, Scheduling, & Dispatch; Campaign Tracking
Decision Analysis, Multi-Criteria Decision Making, Game Theory o Generate Ideas
Project & Program Management, PERT, CPM o Support Decision Making
Quality Management (TQM, 6Sigma, ZeroDefect, etc.)
Business Architecture & Systems Modeling o Monitor Execution
Controls & Compliance (SOX, Basel, ISACA, etc.) o Drive Results
Organizational Behavior, Organization Theory, and Strategic Mgmt
Systems: what tools do you use? the BI view
Data Loading & Processing
Batch
Stream
Data Sourcing
Transactions
Conversations
Observations
Data Marts & Warehouses
Closed Access (only via IT)
Open Access
Offline Analytics Tools
Reporting
Dashboards
Self Service, Slice/Dice, Drill-down
Data Quality
In-line Analytics
Surveying & Feedback
Systems: what tools do you use? the Analytics gap
Innovation
Frame decision needs in an enterprise model
Manage idea-to-execution pipeline

Visualize, Explore, Cluster, Segment, Forecast,
Optimize, Simulate, Machine Learning, etc.

Decision support (AHP, MCDM, Bayes, etc.)
Operations
Execution (Trusted, Actionable, Responsive)
Learn & Ingrain
Data Provisioning
Agility, Reliability & Serviceability
Traceability & Fidelity
Data Assessment & Scrubbing

Manage Data Problems
Manage Data Dictionary
Master Data & Hierarchies
Enterprise Ontology Model

Shared Ontology & Enrichments
Privacy, Security and Availability
Capability: does the analytics team leverage the
spectrum of analytics techniques
1. Get/provide data, measure and improve data quality
2. Observe, understand and explain business issues create analyses,
generate insights, monitor execution, guide value realization
Statistics
OR
3. Forecast trends, predict outcomes and behaviors (assess
possibilities)
4. Formulate, simulate, and assess scenarios, develop ideas and
courses of action (develop ideas)
Decision Advice
5. Recommend courses of action (select the best ideas: feasible and
optimal or Pareto optimal)
Culture: how readily do business people use the
analytics?
1. Unaware of how analytics can be used
2. Aware of analytics but do not use it for various reasons
Trusted
Actionable
3. Use analytics for specific decisions and actions Responsive
4. Support the creation and usage of analytics, metrics and decision

rules in an organizational model, can assess the value of analytics
Learn
Ingrain
5. Leader in using analytics, recognize applicability, & demand the best
analytics; innovate, learn, & ingrain analytics in business processes
Technology: do the analytics teams get the systems,
tools and infrastructure support they need?
1. Unable to provide analytics systems (data, tools & infrastructure)
2. Partially provides the analytics systems and data required and
refreshes the data periodically for off-line analyses Shared data
Trusted, Actionable,
& Responsive
3. Fully provides analytics systems and refreshes the data periodically
for off-line analyses Fast decisions
Closed loop
4. Enables analytics to be executed in-line, i.e., used seamlessly within
business processes
5. Delivers enterprise-wide in-line analytics, so the organization can use
analytics at scale and without delay
Agenda

Leadership support?
what we need?
How will we evolve the CoE?
What does the
organization want to
do with analytics?
TARGET
What is the role of
STATE
the CoE that they
What is the organizational envision?
context? Current providers of
analytics? Leadership support?
What will the Analytics CoE need
Where do we stand with CURRENT to be like (now and in the future,
analytics capabilities now, STATE up to the planning horizon)?
compared to what we need?
How will we evolve the CoE? Set
expectations, drive the evolution,
establish the value
Establish the value
Experimentation (A/B Compare) Before/After Compare
The model is used in an The model is deployed

experimental setting, globally
against the current gold Compare the results before
standard method and after the model is
Compare the results of the deployed (problem remains
model to the gold that there can be other
standard explanatory factors)
Move fast & patiently
What can be done fast What takes time

Bring right expertise (skills) into the Change the decision-making
analytics network culture of the organization
Set up the analytics platform
What must be done right

Produce relevant, trusted
& actionable analytics
Help people to use the
analytics deliverables
Track the value created
Evolve the analytics process capabilities
Failure is part of innovation

Concept to Value Realization manage it by ensuring it occurs in the context of the
analytics platform and processes (back those innovation
efforts that have an idea-to-execution perspective,
INNOVATION: TALENT-DRIVEN remember and learn)
OPERATIONS: PROCESS-DRIVEN
Process Value Management

Role
Capability Value Management EVOLVE
Coverage Organizational Value Management

Obsolescence is part of operations
manage it by ensuring it occurs in
the context of long term relevance
(dont lose memory)
Change the decision-making culture of the organization
Consider leadership, trajectory, overshoot and undershoot
Learn &
Ingrain Jim Harry
Decision
Models Jim
DEMAND
Data
Oriented Harry Tom
Consistent
& Disciplined Tom
Inconsistent
Decisions
SUPPLY
Today 1 year 2 years 3 years 4 years
This presentation is based on the material
available in the book:
Business Analytics: A Practitioner's Guide

By Rahul Saxena & Anand Srinivasan
Springer International Series in Operations

Research & Management Science
http://www.amazon.com/dp/1461460794

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Building an Analytics CoE

Workshop at IIM Bangalore

This presentation is based on the material available in the book:

Introductions about the group, about me. What is "analytics"?

Provided analytics Consumed

OTHER Provided analytics

Now Cobot Systems

1991 Indian Railways

ILLUMINATE DIAGNOSE FORECAST OPTIMIZE MCDM, etc.

Charts & Tables in Reports & Dashboards

use any method

TRANSACTIONS CONVERSATIONS OBSERVATIONS

Structured Unstructured Sensors & Signals (M2M)

use wherever there

Variety of Analytical Insights

Introductions about the group, about me. What is "analytics"?

Current Supply Demand

How should we manage Why do we need so many

analytics investments to reports? Why does it take

How can we develop What can analytics do to

analytics capabilities to improve our business

Analyze contract renewal Finance

Feed the workload (renewal

Schedule follow-ups by the

Get the renewals, improve

Deal P&L Resource Delivery Revenue &

get clients by offering business value

Analyze each deal for timing of costs (COGS Q1 Q2

Approve or modify deals based on insight Improved

Geo P&L Owner Geo Finance Lead

provide us the analysis, help us throughout the idea

Introductions about the group, about me. What is "analytics"?

Messages (email, SMS) to

Analytics providers are

Leader & Data Providers Noise Filter Analytics

Harry, CFO BizA-CoE BizA-CoE BizA-CoE

bubble denotes growth

Introductions about the group, about me. What is "analytics"?

The analytics function

Zoom out of the centralized / distributed / hybrid debate its a network

Shared Data in an Agile Data Platform, Rapidly Extensible Data, in context

Relevance & Trust built into Deliverables via a Rules-base Relevance

Decision Models built and provided where Relevant Data-driven Decisions

Provide the analytics platform to enable everyone in the network

... align supply to demand

Relevance & Trust

Learn & Ingrain

Nodes Evolve: Mature, Add, Re-organize, Disappear

Develop new insights & concepts

Continual creation of Analytics Deliverables

The suppliers dilemma: the more useful analytics

1 100% 0% 100% 80% 16% 4%

Introductions about the group, about me. What is "analytics"?

o Frame the Decision Need

Manage idea-to-execution pipeline

Optimize, Simulate, Machine Learning, etc.

Traceability & Fidelity

Data Assessment & Scrubbing

Enterprise Ontology Model

4. Support the creation and usage of analytics, metrics and decision

Introductions about the group, about me. What is "analytics"?

Experimentation (A/B Compare) Before/After Compare

The model is used in an The model is deployed