Demand Hot for Analytics Pros

Susan Hall

Susan Hall spoke with Jack Phillips, CEO of the research firm International Institute for Analytics, about his company's 2011 predictions for the analytics industry and the skills involved.

Slide Show

Nine Predictions for the Analytics Industry in 2011

The competitive gap between analytical innovators and those who do not invest in analytics will widen over the coming 12 months.


Hall: You say that the use of analytics as a competitive differentiator in selected industries will explode. Which industries are you talking about?
Phillips: In our research brief, we list eight: banking, insurance, health care and life sciences, telecommunications, retail, energy and utilities, media and entertainment, and transportation.


Hall: You also say the gap between analytical innovators and those who don't will widen in high-profile ways. Can you give me an example of how that might happen?
Phillips: Sure. In the retail industry, if you as a company are not keeping up with your nearest competitors in the use of analytics to understand customer buying patterns, shelf space optimization, pricing strategies, obviously you're going to be at a disadvantage. The kinds of technologies being used now in the retail industry really revolve around analytics. So that technology to get information about customers is growing at a huge pace.


If, for example, you're not able to present a coupon at checkout based on the fact that you recognize the credit card and can align that with your customer profile that we've painstakingly built, both online and offline-if you're not able to do that and your nearest competitor is able to do that, customers are going to go to the competitor who is able to offer that customization.


In retail, there aren't many competitive frontiers left. There's really no competitive advantage to be had anymore by discovering a new magic corner or magic spot in a shopping mall. There really is no competitive advantage anymore to be had around pricing. The competitive advantage is out of that because of people like Sam's Club and Walmart. But specific applications in analytics really can produce a competitive advantage. At least that's what we're hearing.


The same is true in health care. We're just concluding our health care analytics research council, a six-month effort. Regional hospitals are realizing, "If we're going to remain competitive, we need to be predicting, using historical data sets, when a certain kind of patient is likely to need certain kinds of care." In that world, it's a lot more expensive to administer care at an emergency room level than at a planned level. Hospitals are saying, "Gosh, we've got lots of people coming in to the emergency room when things happen to them that could have been avoided with proper prediction."


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