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© 2014 IBM Corporation

October 2014

Inside the mind of Generation D:What it means to be data-rich and analytically driven

© 2014 IBM Corporation2NOTE: Surveyed 1,089 respondents across 5 industries (i.e., Telco, Finance, T&T, Consumer Packaged Goods and Retail), all major geographies, and 70% large enterprise /30% medium enterprises; Additionally, 50 in-depth qualitative interviews were conducted. Data is weighted according to by GMV opportunity. © 2014 IBM Corporation


The majority of enterprises recognize that data and analytics are transforming their industry and professions

3 © 2014 IBM Corporation


There are four distinct approaches to data and analytics… and one group of enterprises uses insights, cloud, and engagement very differently

5

Generation D enterprises are:

3x more likely to excel at developing insights

regarding their customers and marketplace1

Da

ta a

nd

an

aly

tic

s1 How effective is your enterprise in doing the following today where 1 is 'not effective at all' and 5 is 'extremely effective.‘? 2 Please rate each of the following statements to the degree that they describe your enterprise where 5 is 'describes your enterprise completely' and 1 is 'does not describe your enterprise at all.' 3 To what extent do you agree or disagree that each of the following statements describes your enterprise where 1 is ‘do not agree at all’ and 5 is ‘agree completely’? 4 To what extent are you using digital channels in the following ways: ‘already using’, ‘plan on using’, ‘not using’

2x more likely to automate processes and

decisions based on insights from analytics2

2x more likely to believe cloud is

transforming their business model3Clo

ud

2x more likely to engage customers

via digital channels (mobile and social)4

En

ga

ge

me

nt

An

aly

tic m

atu

rity

Data breadth and sophistication

Traditional

Analytically ambitious

Data-rich, analytically enabled

Generation D:Data-rich, analytically driven

19%

31%

21%

29%


The Generation D approach correlates with better than average performance across a variety of key performance indicators (KPIs)

6 1 For each measure… please indicate approximately how your business performs on that measure

Generation D reports improved performance over peers on KPIs1

+10%

+6%

+17%

+13%

+6%

+13%

points

points

points

points

points

points


More Generation D enterprises are extremely effective at addressing business challenges1

7 1 How effective is your enterprise in doing the following today? Please rate on a scale of 1 to 5, where 1 is 'not effective at all' and 5 is 'extremely effective.

Generation D All othersGeneration D

versus all others

34%

37%

43%

42%

33%

Developing new revenue streams

Penetrating new markets

Improving interactions with customers

Operating efficiently

Managing risk

Responding to security threats

Faster time to market

3.7x

2.5x

2.9x

2.4x

3.0x

9%

13%

18%

14%

14%

46% 18%

2.6x36% 14%

2.5x


Generation D enterprises are more likely to combine advanced data with sophisticated analytics

8

Analytical maturity

1 To what extent are you using each of the following as input to your company's analytic process? ‘already using’, ‘plan on using’, ‘not using’. 2 Please indicate how each of the following types of analytics is used in your business where 1 is ‘not used at all’ and 5 is ‘deeply embedded into most, if not all processes and strategic decisions’.

Data breadth and sophistication

2.2x more likely to use advanced

data sources such as, unstructured text, location data, audio, video and mobile application data1

1.5x more likely to use traditional data

sources such as transactional, CRM, supplier, log, publicly available and purchased data1

2.9x more likely to use

predictive analytics, and

4x more likely to use

prescriptive analytics

to inform most processes and strategic decisions within the enterprise 2


Generation D enterprises use a wider variety of more-sophisticated analytic skills and capabilities

9 1 Please indicate which of the following capabilities and skill sets are being utilized in your business today


versus all others

67%

Engage in video/audio analytics

Use natural language text analytics

Conduct next best action modeling

Use simulations

3.2x

1.8x

3.9x

1.5x

29%

23%

42%

44%

93%

89%

74%


Data and analytics examples

10 50 qualitative interviews were conducted in addition to the 1089 quantitative surveys. The use-cases on 10, 13, and 16 come from those qualitative interviews.

Optimizing high cost inventory through gamification and simulation

Pricing insurance policies faster by combining traditional and advanced data

Improving the customer experience with real-time data

• A jewelry retailer sought an alternative to in-store testing as a way to minimize carrying costs and quickly gauge demand for new products.

• The company runs online gamifications with their existing customers to understand product preferences and price sensitivity.

• Better able to time new market entries and reduce inventory costs. A 60% increase in new product success rate.

• An insurance company needed to make home inspections more efficient.

• By gathering aerial property images from external data sources, they can calculate the square footage of a house without a physical home inspection.

• Home inspections have been reduced from almost 100% of new policies to 40%.

• A trucking company wanted to revamp their communication with drivers on the road.

• It equips all of the company’s trucks with a telematics system that logs GPS, engine use, and speed/braking data.

• The real-time information allows the company to provide updated quotes and delivery status while optimizing fuel costs and reducing its mobile units by 60%.


Generation D enterprises view cloud as key to enabling transformation

12

1 To what extent do you agree or disagree that each of the following statements describes your enterprise where 1 is ‘do not agree at all’ and 5 is ‘agree completely’? 2 To what extent is your business deploying each of the following solutions in a cloud environment? ‘already using’, ‘plan on using’, ‘not using’ 3 Does your enterprise use API-based services offered by other companies?


versus all others

60%

56%

54%

53%

Believe cloud is transforming their business model1

Use cloud for analytics2

Use cloud for data management2

Use API-based services3

1.9x

1.8x

2.5x

1.8x

31%

23%

30%

29%


Cloud examples

13

Competing faster on the cloud

Building an optimized schedule by combining data in the cloud

Using APIs to speed performance

• A real estate company desired to collect and distribute property information between employees faster.

• Through a cloud database, the company gives employees the ability to sort through existing data and upload their own, such as photographs of properties and location information, while in the field.

• It now has a competitive advantage during time-sensitive biddings and can predict imminent vacancies.

• A restaurant chain sought collaborative opportunities between its siloed data sources.

• It hosts its previously disparate databases on the cloud, allowing for a unified view of all its information, most importantly the customer loyalty program and the scheduling program.

• The company is now able to assign their best-selling servers to the busiest shifts, driving a 2% increase in revenue.

• A bank wanted to give their institutional clients access to some of its efficient, in-house capabilities.

• The bank offers API services over the cloud which provide access to proprietary platforms and stream real-time data.

• Institutional clients can now view real-time information (e.g., exchange rates) and perform actions such as foreign exchange transactions more easily.


Generation D enterprises are embracing new ways to engage customers, employees and partners

15

1 Which communication type does your business primarily use for customers? ‘personalized’, ‘customized by segment’, ‘non-customized 2 To what extent are you using digital channels in the following ways? ‘already using’, ‘plan on using’, ‘not using’ 3 Please rate each of the following statements to the degree that they describe your enterprise where 5 is 'describes your enterprise completely' and 1 is 'does not describe your enterprise at all.‘ 4 To what extent do you agree or disagree that each of the following statements describes your enterprise where 1 is ‘do not agree at all’ and 5 is ‘agree completely’?


versus all others

59%

70%

Personalize interactions with customers

Engage customers via mobile and social

Use mobile and social to drive business processes

Extensively share data and analytics internally3

Link customers, employees, and partners to better engage the market4

1.7x

1.8x

2.0x

1.6x

35%

39%

40%

43%

2.1x70% 34%

79%

74%


Engagement examples

16

Reducing churn through social media and audio analytics

Harnessing mobile and analytics to better engage customers

Using social to evolve enterprise collaboration

• A telecom company wanted to better forecast individual customer defections before they happened.

• The company analyzes social media comments, call center audio, contract expiration dates, network data and other factors responsible for turnover.

• Customers are assigned a “propensity to churn” score and are targeted with offers designed to increase the likelihood of retention.

• A retail giant needed an improved mobile app to counter competitive digital channels.

• The company compiles and analyzes purchasing histories and consumer feedback from individual customers.

• The new mobile app sends personalized coupons, reminds buyers of price-matching offers on relevant goods, and can direct in-store customers to nearby sites for out-of-stock items.

• A financial services firm with a dispersed workforce sought to increase collaboration beyond traditional e-mail and phone communication.

• It has created a web portal that allows employees to upload, view and edit projects in real-time.

• The portal cuts down on travel costs and increases the speed and flow of information.


Generation D is clearly adopting a more systematic approach to data and analytics, cloud and engagement

18

Have a coordinated cross-functional or centrally owned strategy for:


versus all others

68%

59%

1.5x

1.4x

1.6x

1.5x

45%

38%

47%

40%

59%

65%


Generation D enterprises infuse data and analytics throughout the business

19


versus all others

Educate employees on the use of data and analytics1

Provide data and analytics in real time2

Extensively share data and analytics internally3

2.7x

1.6x

1.5x

31%

40%

43%

85%

1 Please indicate which of the following capabilities and skill sets are being utilized in your business today. 2 Please indicate how each of the following types of analytics is used in your business where 1 is ‘not used at all’ and 5 is ‘deeply embedded into most, if not all processes and strategic decisions’. 3 Please rate each of the following statements to the degree that they describe your enterprise where 5 is 'describes your enterprise completely' and 1 is 'does not describe your enterprise at all.‘

60%

70%


Is your enterprise part of Generation D? What are they doing differently?

20

Traditional

Analytically ambitious

Data-rich, analytically enabled

Generation D:Data-rich, analytically driven


Infusing the majority of processes and decisions with analytics

Tackling complex data sources and applying more predictive and prescriptive analytics

Managing more of their data and analytics on the cloud

Moving toward mobile and social as their primary methods of engaging customers

Changing their culture, not just their technology

Generation D is:


To learn more about the study, please visit

21

ibm.com/ibmcai/gen_d


http://www.ibm.com/ibmcai/gen_d


© 2014 IBM Corporation22

© Copyright IBM Corporation 2014

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Produced in the United States of America October 2014

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Notes and sources:

Inside the mind of Generation D: What it means to be data-rich and analytically driven. IBM Center for Applied Insights. October 2014.http://ibm.com/ibmcai/gen_d.


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