Breakthroughs in analytics, Part 1
Nobody can read a customer's mind, but with the right analytics technology, you can come pretty close. Past behavior suggests future behavior, so all you have to do is watch. The hard part is figuring out what data to watch for, picking out a pattern, and figuring it all out with enough time to make the right decision.
Oh customer, so mysterious ... what have you done ... what will you do ... and what decisions should a business make to keep you or get rid of you?
Seeking answers to these key questions, the commercial world has turned in a big way to analytics -- the science of logical analysis. Analytics involves the extensive use of data, statistical and quantitative analysis and explanatory and predictive modeling. Key fields within analytics include enterprise decision management and marketing analysis. Analytical activities are expanding fast in government agencies, not-for-profit organizations and business enterprises -- business analytics.
In the process, business analytics -- with fecund subsets like CRM analytics, financial analytics, real-time data analytics and Web analytics -- has become big business. A huge market exists for business analytics development tools and packaged intelligence applications that dig through data looking for patterns and possible trends. The industry topped US$20 billion in 2007, according to IDC estimates.
IDC's definition of business analytics software comprises performance management applications and data warehouse platform software -- specifically, "solutions used to access, transform, store, analyze, model, deliver and track information to enable fact-based decision-making." The median return on investment for companies that implement a data analytics program is 112 percent, according to one IDC study.
The mega-serious money surrounding the business analytics play has attracted to the scene familiar giant enterprise software muscle like IBM (NYSE: IBM), Microsoft (Nasdaq: MSFT), Oracle (Nasdaq: ORCL) and SAP (NYSE: SAP). But it has also helped spur the growth of a plethora of smaller, more tightly focused players like SPSS (Nasdaq: SPSS).
