CIOs use real-time analytics for better business decisions

CIOs and their peers are leading the use of real-time data to make operational and tactical decisions about their businesses, an IDC study has found.

CIOs and their peers are leading the use of real-time data to make operational and tactical decisions about their businesses, an IDC study has found.

The study of 181 European businesses, sponsored by business intelligence supplier Teradata, found 26% of firms starting to use real-time information integrated with massive data analysis to create "active information" to make on-the-spot operational and tactical decisions.

The study found that business analytics was traditionally done for strategic planning because of the time delay in getting information into datawarehouses. But faster technologies, such as solid state disc arrays meant companies could respond in near-real time to market events.

IDC programme manager Alys Woodward said CIOs were most likely to use more traditional decision support tools. But more than 30% were using active information to manage IT, particularly in online transaction processing environments.

She said there was no "killer app" for active information systems. The most popular app was to monitor usage problems, such as dropped mobile phone calls or call centre operations, often using active information to make better offers to customers thinking of switching suppliers. This was because it was a lot cheaper to hold onto a customer than to find a new one, she said.

But even that was only 20% of applications. Others included updating master data product records and monitoring stock levels and financial transactions such as point of sales, billing, ordering and shipments, and marketing promotions.

She said a common use by finance directors was to monitor transactions that fell outside pre-set risk limits. This could indicate potential fraud or signal changes in customer behaviour, she said.

Another was to watch invoicing and payments to ensure that the firm preserved cash flows and did not break banking covenants.

She said 15% of firms surveyed were using active information to monitor changes in customer profiles, and another 15% were planning to use it within the year to monitor the effect of programmes that drove up demand for the firm's products and services.

Woodward said firms were integrating their structured information with text analysis systems to harvest what people are saying about the business. The most common source was formal customer feedback from surveys, e-mails and phone calls, but more than a fifth were monitoring Web 2.0 media such as Facebook, Twitter and blogs to glean market perceptions about the firm and its activities.

Commenting on the findings, Daniel Neuhaus, head of Swiss telco Swisscom's business intelligence centre, said it was still hard to get good information into a form that was useful to customer-facing staff. But this was where it was especially valuable to firms, he said.

Firms needed to separate the "standard apps" for active information, such as compliance monitoring, from operational systems that improved the company's ability to serve customers.

Stephen Brobst, Teradata's CTO, said more firms were realising that evidence-based decisions were better than most managers' "gut feel".

"Where gut feel is irreplaceable is in selecting what information makes the difference, what you absolutely should monitoring to make the best decisions," he said.

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