Using BI, BPM Data to Change Business Processes Fast

CIO - Actions reveal more than words, we know, and companies are watching carefully, using business intelligence and analytics tools to figure out what's happening in their markets. But it isn't just what makes a consumer buy a product or respond to an e-mail promotion that companies want to understand. They're also putting business operations-where efficiency can make the difference between profit and loss-under the microscope.

By using insights from analytics to improve business processes, CIOs can help managers feed updated intelligence into their decision-making routines almost continuously. A marketing campaign can be adjusted in hours in reaction to uptake on a website. A logistics process, such as trucking equipment to construction sites, can be adjusted to changes in the price of fuel.

As analytics tools become more powerful, analysis happens faster, enabling business changes that make or save significant amounts of money, says Rick Roy, senior vice president and CIO of CUNA Mutual Group, a $2.8 billion insurance company. CUNA Mutual has pored over customer data to identify which of its products are selling, why and to whom. Using insights from analytics to guide business process changes is a "dramatic productivity enhancer," Roy says.

Sixty-five percent of 335 IT leaders we polled recently say business intelligence and analytics have spurred a business-process change in the last year. However, they also indicate that there's more work for IT to do. For example, just 41 percent say their analytics and business process management (BPM) tools are closely integrated.

If analytics and BPM tools were integrated, they could be used to map how best to change business processes given a particular insight from the data, says David White, a senior research analyst with Aberdeen Group. But for now, CIOs like Roy have to work with their business partners to make such determinations. Connecting analytics and business processes sometimes means creating data warehouses to collect information from multiple systems in order to study it. IT leaders also find themselves promoting old-fashioned conversation across departments.

Companies where CIOs enable the best use of predictive analytics tools and techniques-including tying them to BPM initiatives-are better at financial forecasting, retaining customers and eking out more operating profit than companies that haven't caught on, says White. He recently studied 159 organizations that actively use predictive analytics and determined, for example, that best-in-class companies retain 93 percent of their customers, compared to laggards who retain just 66 percent.

Competitive pressure-along with substantial, measurable financial gains-will lead more CIOs down this road, says Tim Fleming, CIO of the Industrial Technologies sector at Ingersoll Rand, a $13 billion heavy-equipment manufacturer. "It's not easy, but you want to do it," he says. "You have to do it."