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A Blog by Paul B. Silverman

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Comments- Are Analytics Shifting from Executives to Employees?

Interesting article in Information Management Feb 6th issue  discussing how analytics decisions are being driven by mid-level staff rather than C-level executives. But analytics demands resources- what analytics should be pursued; how should analytics be deployed to increase revenue, decrease costs, and improve strategic position; what are the company’s key competitive peer group metrics? These are C-level not middle management decisions. Analytics, effectively deployed, can provide high ROI, but successful adoption typically demands C-level participation.

My comments noted no question there is a C-level gap in in understanding how analytics drives increased revenue, decreased costs, and improved strategic position. The concept of “analytics competitor,” mentioned in Tom Davenport’s writings (Competing on Analytics, others) emphasize that “C-level” analytics, creatively applied, helps companies create winning strategies- examples which I have used in MBA courses are Netflix, Progressive, and even Cirque du Soleil which created a new ‘circus/theater’ market sector- if you wonder why you don’t see three circus rings or elephants, analytics played a key role in these and many other decisions. Worthwhile reading. Key point- C-level management teams that understand the power of analytics driving new business strategy will achieve above average returns and a competitive edge. “Tops-down” thinking and unfortunately missed by many.

Secondly, no doubt there is a ‘massive treasure trove of data’ available- big data is a resource, not a solution. Analytics are the tool to leverage ‘big data” to improve key metrics, e.g., revenue, costs, strategic position, and so on. And no doubt analytics supports and improves workforce operational decisions… Read more including perspectives on analytics in the healthcare sector at http://tinyurl.com/mw674t8

 

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Good Analytics Article- “…Reaping Returns from Analytics”

Good insightful article in the October 18, 2013 issue of Information Management on analytics by Narendra Mulani who is Managing Director of Accenture Analytics. I posted comments sharing some additional perspectives and related opportunities I foresee. One clear message here- the analytics market is positioned for major growth and as I noted in my comment related to healthcare analytics, today we are only seeing the ‘tip of the iceberg’ in this sector.

Check out at http://tinyurl.com/nyrd8q2

Here is a copy of the comments I posted:

Excellent article. I am pleased to share some comments based on my experience in the analytics arena.

Analytics clearly provide powerful tools to optimize business processes and value chain functions. What is often overlooked is understanding the impact of external and industry factors critical to maximize performance and mitigate risk. Some studies, for example, show that external factors have a 45 percent impact on ROA. Ignore these, and your analytics may address only 55 percent of the critical performance and risk drivers.

How will global environmental policies impact your business; what is impact of changing healthcare regulations on new drug development and clinical trials; what new market opportunities are projected based on disruptive innovation in your business; how will privacy and transborder data restrictions impact your business today and tomorrow. These are external drivers which can create new markets and ‘destroy’ existing ones.

Addressing how the external environment impacts your business demands analytics addressing STEEP analysis, Porter’s Five Forces, Peer Group modeling, and similar diagnostics. And these are not static analyses- change is the only constant in today’s global environment, and having current data is critical. The winning formula- couple traditional external analysis tools, such as STEEP, with unstructured exogenous data analytics provides dynamic, real time insights on external market and business portfolio impact. Integrate these insights with internal data analytics to develop ‘actionable’ analytics. Today’s fiercely competitive global markets demands this analytics rigor.

One interesting statistic suggests 85 percent of today’s analytics solutions address CRM applications, improving the performance and operations dealing with customers and related supply chain activities. The remaining 15 percent are emerging exciting analytics directions that offer exciting opportunities.

For example, in the legal arena, Technology-Assisted Review or “TAR”, uses computer models, machine learning, and analytics to sort millions of documents identifying relevant and privileged documents to support litigation with dramatic cost savings. TAR technologies are rapidly evolving and the acceptance of TAR is now being tested in state and Federal courts.

Analytics will also play an expanded role in traditional corporate strategy management. Fortune 500 companies have thousands of business portfolios often managed using traditional analytics, e.g., hurdle rates, IRR, others. Understanding with precision how these individual portfolios align with the Company’s overall strategic plan, what are the overall projection risks, where are the corporate exposures based on both internal and external factors, are the exciting new directions being pursued by leading edge companies.

While analytics applications in healthcare are accelerating, we are at the tip of the iceberg. Using machine learning to optimize clinical care and reduce longitudinal costs for patient care; integrating healthcare claims data, EHR and genomic data to evaluate patient outlook for both clinical and insurance applications; tracking and analyzing medications and vital signs to assess drug efficacy and adverse effects for drug trial screening; are some of the many exciting new directions we see emerging that will redefine today’s healthcare system improving both quality and cost performance.

Senior management will be challenged to understand these new analytics applications to improve their global performance and mitigate risk. Even business schools must adapt- new analytics tools are reshaping our traditional approach to strategy development and competitive analysis.

Clearly exciting times lie ahead for all players in the global analytics market

Paul B. Silverman is Executive Chairman of InferX Corporation, a predictive analytics company and also teaches at the R.H. Smith School of Business in the University of Maryland.

Paul B. Silverman

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Comments on Article- “Predictive analytics showing the shape of things to come”- The Australian June 25, 2013

The Australian newspaper had an interesting article on June 25, 2013 (http://tinyurl.com/mtah9ju) describing a number of successful predictive analytics applications, but also making the point that market penetration has been slow noting “… despite the numerous uses of predictive analytics, uptake is limited. According to Gartner, only 13 per cent of organisations report extensive use, while fewer than 3 per cent use prescriptive capabilities such as decision/mathematical modelling, simulation and optimisation market”. I posted brief summary comments today in response to the article and am pleased to share a complete copy of my comments:

Excellent article and clearly summarizes the challenges we face in educating management on how PA solutions can help companies improve performance and mitigate risk. I am pleased to share the following 3 observations. My comments are based on my position as CEO of InferX Corporation, a publicly traded predictive analytics company, and serving as adjunct professor teaching MBA strategy courses in the RH Smith School of Business at the University of Maryland.

No. 1   Analytics complements ‘traditional management’

Define your mission; assess external environment and competition using PEST, Porter’s 5 Forces model, other tools; assess internal resources and capabilities; develop detailed value chain analysis; analyze product life cycles; develop cost leader/differentiation global strategies based on product, market, competition and other factors. Analytics can make a major contribution throughout the ‘traditional’ management process. Yet market analysis shows about 85% of the total PA market today addresses the CRM sector. We need to view PA within the context of traditional management rather than a separate ‘big data/analytics’ sector. Integrating PA into traditional management processes is a challenge and the real opportunity with high upside

No. 2   Analytics costs more

True. When the e-commerce revolution emerged years ago, we had major push back from companies who preferred to continue to process orders manually, work with suppliers using ad hoc systems, and avoid ‘costly’ new systems implementation and industry standards. Systems costs did increase, but we created process and performance efficiencies that improved profitability and reduced risk. Today’s analytics solutions demand understanding ROI (and how to measure) and clearly communicating this message.

No. 3    “Analytics Drives Strategy and Strategy Drives Analytics”

Properly executed and integrated into a company’s management processes, I see great opportunity to use analytics to drive strategy, particularly in shaping new product and market innovations to increase ROI. Look at Capital One, an analytics driven competitor reportedly doing 300+ analytic scenarios daily to optimize financial offerings. Or Progressive, capturing motorcycle rider clients using analytics to define a segment with both claims and expense ratios providing strong returns. Amazon, Netflix and many others are using analytics to drive ‘micro-marketing segmentation’ which is where we are heading. And these new strategies create new analytics, enabling analytics- savvy companies such as Amazon to continue to excel.

Clearly all ‘analytics solutions’ providers, a term I prefer to emphasize PA’s broader role, have a challenge ahead- to educate clients, particularly at the ‘C’ level, on the opportunities embracing these solutions and the challenges they will face if they do not. Exciting times lie ahead in the global analytics solutions business for both solutions providers and all companies in all sectors.

Paul B. Silverman

President and CEO

InferX Corporation (OTC/PK: NFRX)

 

 

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HBR Taps Data Scientist as the Sexiest Job of the Century

HBR Taps Data Scientist as the Sexiest Job of the Century

Here is an interesting post from the Spitfire Business Intelligence blog about a recent HBR article

“The award is the business world’s equivalent of People Magazine’s annual Sexiest Man Alive designation.But who could ever have imagined that the nod would go to the data scientist, a role pioneered by the world’s Web behemoths and now being sought after by mainstream companies seeking to gain actionable business insight from sifting through large volumes of data?”

http://spotfire.tibco.com/blog/?p=14455

 

Click on the above link to read the complete post and you may also want to access the HBR article which I think most will find interesting. These are the same messages I and many others are making about analytics and its ability to dramatically reshape and improve current business processes, create more efficient operations, and drive significant new product development and other high potential revenue opportunities.

The role of creative, powerful analytics is also reshaping our traditional perspectives on industry analysis and strategy development which are being integrated into traditional business management programs. And new career and business opportunities are emerging from all sectors in many diverse organizations, and I foresee these accelerating. We should keep in  mind analytics are still in early stage of development and deployment, and today’s management is only beginning to understand how these techniques add real value and competitive edge.You can be sure exciting and challenging times lie ahead in the analytics arena.

 

Paul B. Silverman

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THE ‘SUGGESTIVE’ VS. ‘PREDICTIVE’ ANALYTICS ISSUE

I posted comments on the HealthCIO.com site in response to article suggesting ‘suggestive’ rather than ‘predictive’ analytics (“PA”) provides real, demonstrable benefits and that, rather than PA,  should be today’s primary focus. My point is with the proper vision and commitments here, PA tools offer powerful, exciting new tools to improve health care, both from patient care and financial perspective, reducing claims fraud and improving processes.And these same tools are spawning exciting new ‘analytics-centric’ ventures which I see as a high potential new venture sector and is one of my focus areas.

You can visit the HealthCIO.com site to see the original article “A Suggestion About Predictive Analytics” at http://tinyurl.com/7nw6twd and also see a reply to my comments. Copy of my comments follows:

Paul says:

‘SUGGESTIVE’ AND ‘PREDICTIVE’ ANALYTICS WILL BOTH HELP IMPROVE HEALTH CARE
Thanks for sharing your insights. As a former CEO of a predictive analytics company, and currently leading a new ‘analytics-centric’ leading edge, personal health and wellness company, among other activities, I am pleased to also contribute my perspectives here.
I like your idea of contrasting Suggestive vs. Predictive Analytics- there is obvious proven benefit in using analytics to improve quality at the point of patient care.
With regard to predictive analytics, I am pleased to offer comments:
–Predictive analytics is often muddled in with other statistical tools as you say, it is often difficult to appreciate and understand just how powerful these tools are and what is their specific contribution
–Rather than saying there are two flavors of PA, “easy and hard”, I suggest a better approach is to say there are two PA target opportunity areas in health care (and also in other sectors):
– Using PA to analyze the “known unknowns” – all of the patient treatment enhancements you described fall into this category- addressing known issues and processes, using analytics to improve processes, quality of care, and doing this more efficiently and at lower cost.
—Using PA to analyze the “unknown unknowns” – this is the real and power of predictive analytics and I believe really offers high upside for all health care players, and patients as well
–Look at the magnitude of today’s health care issues. As one example, increasing complexity of medication regimens used by patients, coupled with a fragmented health care system involving multiple prescribers, has made the occurrence of serious drug-drug interactions more likely today than ever before. For example, one study suggests Preventable Adverse Drug Events injure 1.5 million people a year, costs the U.S. healthcare system $3.5 billion and resulting in an estimated 44,000 to 98,000 deaths every year. Some studies show even higher numbers.
–Our aging population exacerbates the above issues. Studies show 41 percent of seniors take
5 or more prescription medications, and more than half has 2 or more prescribing physicians. And 24 percent- about 1 out of 4 – seniors having 3 or more chronic conditions have not shared information with their health care providers during the last 12 months. No wonder medication errors among seniors on Medicare are estimated at almost $900 million.

–We can use the real power of PA to better understand the “unknown-unknown” drivers here that are impacting our health care system, and create powerful new tools, improved processes and do this more efficiently while improving patient care.

–The “unknown-unknown” data I would like to see addresses questions such as why do we have adverse drug events; what are the rules we should be looking at and changing to reduce these events save lives, and reduce health costs; what are the underlying drivers and patterns for adverse drug events- do these vary by geography, treatment modalities, user demographics, specific types of medical facilities, maybe how and where medical practitioners are trained. “Unknown-unknowns” may, for example, identify certain treatment modalities and drug regimens used by select groups of medical professionals which drive adverse drug events. Predictive analytics, an inductive rather than deductive process, offers a powerful tool to help us identify these and many other critical underlying health care drivers.

I agree there are many PA projects that today may seem academic, but I do see great possibilities to improve our health care system, using powerful new predictive analytics computing tools and platforms coupled with more traditional analytics (both suggestive and deductive ‘rule based’ analytics), to dramatically improve the quality of our health care system. These new analytics and tools will address clinical issues such as the growing problem of adverse drug events, as well as addressing Medicare and other health care claims fraud and errors.

We are making progress, but I still believe we can be doing much more to achieve significant improvement in our nation’s health care system and very clear to me predictive analytics and other tools, with the proper vision and commitments, will play a substantive role.

Paul Silverman, Managing Partner, Gemini Business Group, CEO  Sante Corporation, Adjunct Professor, R.H. Smith School of Business in the University of Maryland.

 

v. is what we need to focus on to improve health care

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HOW BOOK MARKETING/PROMOTION DRIVES CLIENT BUSINESS AND SELLS PRINT BOOKS

BOOK SIGNING AND MEET THE AUTHOR AND  EVENT AT  EXPO EAST CONFERENCE  ATLANTIC CITY : HOW BOOK  MARKETING/PROMOTION DRIVES CLIENT BUSINESS AND SELLS PRINT BOOKS

I was invited to do a book signing and “Meet the Author” event June 5th at the Expo East promotions expo in Atlantic City, NJ. for my first book in the   “Worm on a Chopstick” series,   Understanding Today’s Entrepreneurial Age: Directions, Strategies, Management Perspectives, and discuss my second book planned for release in late 2012.

One of the largest promotions/marketing conferences, the trade-only event attracts major corporate buyers, sales reps, promotion/marketing companies, ad agencies, and others.  Today we see explosive growth of  e-books which is driving market demand, and also see the demise of traditional ‘brick and mortar’ bookstores.

However, before we writeoff the traditional print book market, it is clear to me based on discussions at this event and elsewhere, that print books are supporting many creative marketing and promotion initiatives to create new markets, promote major lines of business, and sell books in large quantities. While we may typically think about print books sold in bookstores, airport kiosks, via Amazon or other mail order channels, the following are some of the marketing and promotion channels I have discussed now being used to support business and sell books:

  • Major bank develops a “Small Business Corporate Library’ to offer selected clients to strengthen their relationship with small business customers and reinforce their brand
  • Pharmaceutical firms integrate nutritional health and wellness programs with one or more selected books
  • Insurance companies use selected ‘branded’ planning/lifestyle texts to create new educational programs for their clients
  • Emergency services (local police and fire) ‘private label’ educational publications for children to provide safety education
  • State governors add ‘tip-in’ pages in a customized version of a business/entrepreneurship or other book to support economic development and attract businesses to the region (“tip-in” pages are custom pages inserted upfront into print books)

All of the above are driven by a basic need – companies want to attract, educate and strengthen relationships with customers. Traditionally, you may have received an imprinted calendar, pen or notepad from your favorite bank, and probably still will, but the above are some of the many new creative and exciting marketing/promotion activities we see emerging now. Given today’s intense global competition, I expect these initiatives to accelerate and others to emerge also linking social media, print books, and e books- we are seeing major new, exciting market opportunities developing here.

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Seeking Predictive Analytics Company – Health Care, Other Sectors

I am working with several colleagues creating a new analytics company – we are now seeking to acquire a predictive analytics company in the health care sector.Will consider other sectors also. Proprietary tools and methodologies preferred. Early stage companies with revenue will be considered. Startups not being considered at this time.

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New Predictive Analytics Application:Managing Your Wardrobe

I see the new ‘data intensity’ business model getting traction in new sectors and creative applications are emerging. Check out Stylitics, a new analytics platform to help manage your wardrobe.

http://mashable.com/2012/02/03/stylitics/

Note the reference to linking branding, couponing and so on. Most importantly, note the clear reference to Mint.com which I and many others view as a “flagship” data intensity business model.

Working with Sante Corporation, a new healthcare/analytics venture, it is clear to me providers can add high value to consumers through next generation analytics, carefully crafted to deliver insights to consumers and provide significant public benefit. The key points here – information aggregation and retrieval are yesterday’s business and commoditizing. Real opportunity now is going deeper, developing “data intensity” models, identifying the “unknown unknowns” providing real value, using powerful, creative predictive analytics to create sustainable value, and developing high value partnerships using electronic couponing, machine readable packaging and other new tools to deliver real value to consumers and create exponential shareholder value growth.

Given Mint.com’s successful business strategy, we can expect to see the data intensity business model trend accelerating. Very exciting developments are coming in this high potential market space.

Paul B. Silverman

Author: Worm on a Chopstick : Understanding Today’s Entrepreneurial Age: Directions, Strategies, Management Perspectives http://paulbsilverman.com/books/

Chief Executive Officer
Sante Corporation
Creating Next Generation Personalized, Simple Solutions to Improve Personal Health Management

Email:      paul@paulbsilverman.com
Linked in:  Paul Silverman
Twitter:     globalbizmentor

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Kodak vs. Fujifilm:Lessons Learned Looking at Winners and Losers- Digital Photography Market

As we all know, the digital photography revolution impacted the traditional film market. which in 2000, accounted for 60 percent of Fujifilm profits.. The film market went to basically nothing, but Fujifilm found new revenue sources and thrived. Kodak was the global leader in the traditional film market but did not survive the technology disruption.

Why?

A recent Economist article www.economist.com/node/21542796 provides excellent insights on strategies both established firms pursued in response to changes in the film market. There are also many lessons we can learn here which I believe help entrepreneurial firms seeking to identify and pursue new opportunities in highly competitive, changing, uncertain, high risk markets.  Here are three  insights that I believe are particularly helpful:

•    When Traditional Markets Change Dramatically, New Opportunities Emerge: Think Out of the Box (or ‘room’ as I noted in my recent book) To Create Winning Strategies

Look at how Fujifilm responded to the demise of the film market. Developed new products (cosmetics, others) leveraging competencies in chemicals and technology; Created film technology for displays, among other ideas. These new directions also create opportunities for agile entrepreneurial firms who embrace a similar
strategic vision, understand where technologies and markets are heading, understand where and how business processes can be adapted to create value and competitive position. What this also implies are new alliance opportunities at all levels including technology, distribution, marketing reach and so on. The starting point is to “think strategically’ which is  an entrepreneurial survival skill in today’s dynamic, global marketplace. Strategy planning matters, and it is a critical entrepreneurial skill worth honing.

•    Avoid the ‘Paralysis By Analysis’ Problem

Kodak was hampered by slow reaction to rapidly changing market and technology shifts. As noted, Rosabeth Moss Kanter of Harvard Business School suggested that Kodak executives “suffered from a mentality of perfect products, rather than the high- tech mindset of make it, launch it, fix it.”  The message here for entrepreneurial firm managers?  Obviously have to balance this with some analysis, but it often “Better to beg forgiveness than ask permission” to successfully pursue new business directions.

•    Disruptive Technology Innovation Always Occurred and Always Will, Only Faster

To see the traditional film market disrupted is really no surprise. Every sector is changing, and many are disappearing due to tsunami- like technology shifts.  We can discuss how long market shifts will take, what new sectors will emerge, who will be
competitors and so on, but the key point is almost all markets will change due to technology disruption .  So it is really no surprise to see the demise of Kodak and many others (e.g., minicomputer manufacturers, large copier companies, Borders, record stores, others)  who either did not fully embrace these radical changes, did not want to “disturb” their current business, or thought their businesses would exist forever. And these changes mean opportunity for agile entrepreneurial firms that understand
the changing competitive dynamics and develop well crafted strategies.

Paul B. Silverman

Author: Worm on a Chopstick : Understanding Today’s Entrepreneurial Age: Directions, Strategies, Management Perspectives http://paulbsilverman.com/books/

Email:            paul@paulbsilverman.com
blog:               http://paulbsilverman.com/blog/
Linked in:      Paul Silverman
Twitter:         globalbizmentor

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Next Gen Ad Analytics:’Finding the Significant Few Among the Trivial Many’

The online advertising market is estimated at more than $30 billion in 2011  growing at 22 percent annually based on Internet Advertising Bureau (IAB) statistics. What we are seeing is explosive growth of predictive-analytics based tools and applications to drive the creation of new targeted ad services.

Look over today’s announcement  http://tinyurl.com/7tmmvsp that predictive analytics firm eBureau is spinning off its online advertising targeting business into a new company called TruSignal(TM) offering targeted advertising using proprietary predictive analytics and other tools.

All companies are interested in finding what we call the ‘significant few among the trivial many’ – I foresee many exciting developments and issues emerging here as we pursue this goal:

  • Expect other online advertising companies to create separate, specialized analytics driven service entities – analytics technology is driving this trend, is highly specialized, and this is moving very quickly
  • Different skills sets are needed as ad business moves to even more advanced analytics and visualization technologies- think of the implications for the online advertising sector looking for creative and ‘analytics-savvy’ candidates – new skill sets are needed now to secure and retain industry leadership
  • Expect to see more analytics spin-offs in other sectors- the same model is occurring in the health care, financial services and others

Always important to look at how major companies respond to these changes (think response of Barnes & Noble vs Borders to the e-book revolution). How does a major ad firm, well entrenched in traditional print, TV, radio media, address these new trends- most are obviously committed to the social media revolution but new predictive analytics tools are changing the rules of the game, helping ‘find the significant few among the trivial many’ in ways not possible today.

As these services accelerate, and they will, I expect to see major firms ramp up internal efforts to develop competitive analytics services organically. These powerful services are evolving very quickly and I expect to see major industry leaders seeking alliances with creative innovation leaders in the predictive analytics market.

 

Paul B. Silverman is a Lecturer in the Robert H. Smith School of Business in the University of Maryland. He also serves as CEO of Sante Corporation, an early stage personal health care management company, and Managing Partner of Gemini Business Group, a new venture development and advisory services firm. He can be reached at paul@paulbsilverman.com or via Twitter at @globalbizmentor

 

 

 

 

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