Predictive Business Analytics E-Book

Lawrence Maisel

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: SAS Institute Inc
• Sprache: Englisch

Seitenzahl: 334

Veröffentlichungsjahr: 2013

Beschreibung

Discover the breakthrough tool your company can use to make winning decisions This forward-thinking book addresses the emergence of predictive business analytics, how it can help redefine the way your organization operates, and many of the misconceptions that impede the adoption of this new management capability. Filled with case examples, Predictive Business Analytics defines ways in which specific industries have applied these techniques and tools and how predictive business analytics can complement other financial applications such as budgeting, forecasting, and performance reporting. * Examines how predictive business analytics can help your organization understand its various drivers of performance, their relationship to future outcomes, and improve managerial decision-making * Looks at how to develop new insights and understand business performance based on extensive use of data, statistical and quantitative analysis, and explanatory and predictive modeling * Written for senior financial professionals, as well as general and divisional senior management Visionary and effective, Predictive Business Analytics reveals how you can use your business's skills, technologies, tools, and processes for continuous analysis of past business performance to gain forward-looking insight and drive business decisions and actions.

Leseprobe

Contents

Cover

Praise

Series

Title Page

Coptright

Dedication

Preface

NOTES

Part One: “Why”

Chapter 1: Why Analytics Will Be the Next Competitive Edge

ANALYTICS: JUST A SKILL, OR A PROFESSION?

BUSINESS INTELLIGENCE VERSUS ANALYTICS VERSUS DECISIONS

HOW DO EXECUTIVES AND MANAGERS MATURE IN APPLYING ACCEPTED METHODS?

FILL IN THE BLANKS: WHICH X IS MOST LIKELY TO Y?

PREDICTIVE BUSINESS ANALYTICS AND DECISION MANAGEMENT

PREDICTIVE BUSINESS ANALYTICS: THE NEXT “NEW” WAVE

GAME-CHANGER WAVE: AUTOMATED DECISION-BASED MANAGEMENT

PRECONCEPTION BIAS

ANALYSTS' IMAGINATION SPARKS CREATIVITY AND PRODUCES CONFIDENCE

BEING WRONG VERSUS BEING CONFUSED

AMBIGUITY AND UNCERTAINTY ARE YOUR FRIENDS

DO THE IMPORTANT STUFF FIRST—PREDICTIVE BUSINESS ANALYTICS

WHAT IF . . . YOU CAN

NOTES

Chapter 2: The Predictive Business Analytics Model

BUILDING THE BUSINESS CASE FOR PREDICTIVE BUSINESS ANALYTICS

BUSINESS PARTNER ROLE AND CONTRIBUTIONS

SUMMARY

NOTES

Part Two: Principles and Practices

Chapter 3: Guiding Principles in Developing Predictive Business Analytics

DEFINING A RELEVANT SET OF PRINCIPLES

PRINCIPLE 1: DEMONSTRATE A STRONG CAUSE-AND-EFFECT RELATIONSHIP

PRINCIPLE 2: INCORPORATE A BALANCED SET OF FINANCIAL AND NONFINANCIAL, INTERNAL AND EXTERNAL MEASURES

PRINCIPLE 3: BE RELEVANT, RELIABLE, AND TIMELY FOR DECISION MAKERS

PRINCIPLE 4: ENSURE DATA INTEGRITY

PRINCIPLE 5: BE ACCESSIBLE, UNDERSTANDABLE, AND WELL ORGANIZED

PRINCIPLE 6: INTEGRATE INTO THE MANAGEMENT PROCESS

PRINCIPLE 7: DRIVE BEHAVIORS AND RESULTS

SUMMARY

Chapter 4: Developing a Predictive Business Analytics Function

GETTING STARTED

SELECTING A DESIRED TARGET STATE

ADOPTING A PBA FRAMEWORK

DEVELOPING THE FRAMEWORK

SUMMARY

NOTES

Chapter 5: Deploying the Predictive Business Analytics Function

INTEGRATING PERFORMANCE MANAGEMENT WITH ANALYTICS

PERFORMANCE MANAGEMENT SYSTEM

IMPLEMENTING A PERFORMANCE SCORECARD

MANAGEMENT REVIEW PROCESS

IMPLEMENTATION APPROACHES

CHANGE MANAGEMENT

SUMMARY

NOTES

Part Three: Case Studies

Chapter 6: MetLife Case Study in Predictive Business Analytics

THE PERFORMANCE MANAGEMENT PROGRAM

IMPLEMENTING THE MOR PROGRAM

BENEFITS AND LESSONS LEARNED

SUMMARY

NOTES

Chapter 7: Predictive Performance Analytics in the Biopharmaceutical Industry

CASE STUDIES

SUMMARY

NOTE

Part Four: Integrating Business Methods and Techniques

Chapter 8: Why Do Companies Fail (Because of Irrational Decisions)?

IRRATIONAL DECISION MAKING

WHY DO LARGE, SUCCESSFUL COMPANIES FAIL?

FROM DATA TO INSIGHTS

INCREASING THE RETURN ON INVESTMENT FROM INFORMATION ASSETS

EMERGING NEED FOR ANALYTICS

SUMMARY

NOTES

Chapter 9: Integration of Business Intelligence, Business Analytics, and Enterprise Performance Management

RELATIONSHIP AMONG BUSINESS INTELLIGENCE, BUSINESS ANALYTICS, AND ENTERPRISE PERFORMANCE MANAGEMENT

OVERCOMING BARRIERS

SUMMARY

NOTES

Chapter 10: Predictive Accounting and Marginal Expense Analytics

LOGIC DIAGRAMS DISTINGUISH BUSINESS FROM COST DRIVERS

CONFUSION ABOUT ACCOUNTING METHODS

HISTORICAL EVOLUTION OF MANAGERIAL ACCOUNTING

AN ACCOUNTING FRAMEWORK AND TAXONOMY

WHAT? SO WHAT? THEN WHAT?

COEXISTING COST ACCOUNTING METHODS

PREDICTIVE ACCOUNTING WITH MARGINAL EXPENSE ANALYSIS1

WHAT IS THE PURPOSE OF MANAGEMENT ACCOUNTING?

WHAT TYPES OF DECISIONS ARE MADE WITH MANAGERIAL ACCOUNTING INFORMATION?

ACTIVITY-BASED COST/MANAGEMENT AS A FOUNDATION FOR PREDICTIVE BUSINESS ACCOUNTING

MAJOR CLUE: CAPACITY EXISTS ONLY AS A RESOURCE

PREDICTIVE ACCOUNTING INVOLVES MARGINAL EXPENSE CALCULATIONS

DECOMPOSING THE INFORMATION FLOWS FIGURE

FRAMEWORK TO COMPARE AND CONTRAST EXPENSE ESTIMATING METHODS

PREDICTIVE COSTING IS MODELING

DEBATES ABOUT COSTING METHODS

SUMMARY

NOTES

Chapter 11: Driver-Based Budget and Rolling Forecasts

EVOLUTIONARY HISTORY OF BUDGETS

A SEA CHANGE IN ACCOUNTING AND FINANCE

FINANCIAL MANAGEMENT INTEGRATED INFORMATION DELIVERY PORTAL

PUT YOUR MONEY WHERE YOUR STRATEGY IS

PROBLEM WITH BUDGETING

VALUE IS CREATED FROM PROJECTS AND INITIATIVES, NOT THE STRATEGIC OBJECTIVES

DRIVER-BASED RESOURCE CAPACITY AND SPENDING PLANNING

INCLUDING RISK MITIGATION WITH A RISK ASSESSMENT GRID

FOUR TYPES OF BUDGET SPENDING: OPERATIONAL, CAPITAL, STRATEGIC, AND RISK

FROM A STATIC ANNUAL BUDGET TO ROLLING FINANCIAL FORECASTS

MANAGING STRATEGY IS LEARNABLE

SUMMARY

NOTES

Part Five: Trends and Organizational Challenges

Chapter 12: CFO Trends

RESISTANCE TO CHANGE AND PRESUMPTIONS OF EXISTING CAPABILITIES

EVIDENCE OF DEFICIENT USE OF BUSINESS ANALYTICS IN FINANCE AND ACCOUNTING

SOBERING INDICATION OF THE ADVANCES YET NEEDED BY THE CFO FUNCTION

MOVING FROM ASPIRATIONS TO PRACTICE WITH ANALYTICS

APPROACHING NIRVANA

CFO FUNCTION NEEDS TO PUSH THE ENVELOPE

SUMMARY

NOTES

Chapter 13: Organizational Challenges

WHAT IS THE PRIMARY BARRIER SLOWING THE ADOPTION RATE OF ANALYTICS?

A BLISSFUL ROMANCE WITH ANALYTICS

WHY DOES SHAKEN CONFIDENCE REINFORCE ONE'S ADVOCACY?

EARLY ADOPTERS AND LAGGARDS

HOW CAN ONE OVERCOME RESISTANCE TO CHANGE?

THE TIME TO CREATE A CULTURE FOR ANALYTICS IS NOW

PREDICTIVE BUSINESS ANALYTICS: NONSENSE OR PRUDENCE?

TWO TYPES OF EMPLOYEES

INEQUALITY OF DECISION RIGHTS

WHAT FACTORS CONTRIBUTE TO ORGANIZATIONAL IMPROVEMENT?

ANALYTICS: THE SKEPTICS VERSUS THE ENTHUSIASTS

MAXIMIZING PREDICTIVE BUSINESS ANALYTICS: TOP-DOWN OR BOTTOM-UP LEADERSHIP?

ANALYSTS PURSUE PERCEIVED UNACHIEVABLE ACCOMPLISHMENTS

ANALYSTS CAN BE LEADERS

SUMMARY

NOTES

About the Authors

Index

Additional praise for Predictive Business Analytics: Forward-Looking Capabilities to Improve Business Performance

“In the words of Harvard Professor MENG Xiao-Li (quoted by Thomas Davenport), ‘you don't need to become a winemaker to become a wine connoisseur.' This book constitutes an excellent introduction to anyone wishing to grow into a data connoisseur. Skipping all the technical aspects of predictive analytics, it focusses on how to better appreciate quantitative analysis, allowing readers to become more sophisticated consumers of data. A first-class and extremely enlightening read about fact-based decision making.”

—Dr. Olivier Maugain, CEO, AsiaAnalytics (formerly SPSS China)

“The authors make a compelling case: to win in tomorrow's marketplace, a company must know—not just guess at—the ways in which non-financial factors will impact financial results. But many managers will fail to adjust to this new decision-making paradigm. Reading this book is your first step in avoiding that fate. The authors use an engaging writing style and tons of practical examples to provide a clear picture of the competencies and skills sets you need to succeed.”

—Mary Driscoll, Senior Research Fellow, APQC

“Simply put, Larry and Gary have nailed the ‘why' and the ‘how' of Predictive Business Analytics in this publication. To be an economically viable company in today's transparent, global and competitive world, business leaders must champion the predictive analytics journey and embed this powerful management practice as an operational core competency. The companies that thrive integrate predictive business analytics into their DNA to out-smart their competitors in strategic and tactical decision making that yields sustainable success.”

—Chris D. Fraga, Chief Strategy Officer and President, Acorn International

                                                   Wiley & SAS Business Series

The Wiley & SAS Business Series presents books that help senior-level managers with their critical management decisions.

Titles in the Wiley and SAS Business Series include:

Activity-Based Management for Financial Institutions: Driving Bottom-Line Results by Brent Bahnub

Big Data Analytics: Turning Big Data into Big Money by Frank Ohlhorst

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Business Analytics for Customer Intelligence by Gert Laursen

Business Analytics for Managers: Taking Business Intelligence beyond Reporting by Gert Laursen and Jesper Thorlund

The Business Forecasting Deal: Exposing Bad Practices and Providing Practical Solutions by Michael Gilliland

Business Intelligence Applied: Implementing an Effective Information and Communications Technology Infrastructure by Michael S. Gendron

Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy by Olivia Parr Rud

CIO Best Practices: Enabling Strategic Value with Information Technology, Second Edition by Joe Stenzel

Connecting Organizational Silos: Taking Knowledge Flow Management to the Next Level with Social Media by Frank Leistner

Credit Risk Assessment: The New Lending System for Borrowers, Lenders, and Investors by Clark Abrahams and Mingyuan Zhang

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The Data Asset: How Smart Companies Govern Their Data for Business Success by Tony Fisher

Delivering Business Analytics: Practical Guidelines for Best Practice by Evan Stubbs

Demand-Driven Forecasting: A Structured Approach to Forecasting, Second Edition by Charles Chase

Demand-Driven Inventory Optimization and Replenishment: Creating a More Efficient Supply Chain by Robert A. Davis

The Executive's Guide to Enterprise Social Media Strategy: How Social Networks Are Radically Transforming Your Business by David Thomas and Mike Barlow

Executive's Guide to Solvency II by David Buckham, Jason Wahl, and Stuart Rose

Fair Lending Compliance: Intelligence and Implications for Credit Risk Management by Clark R. Abrahams and Mingyuan Zhang

Foreign Currency Financial Reporting from Euros to Yen to Yuan: A Guide to Fundamental Concepts and Practical Applications by Robert Rowan

Health Analytics: Gaining the Insights to Transform Health Care by Jason Burke

Human Capital Analytics: How to Harness the Potential of Your Organization's Greatest Asset by Gene Pease, Boyce Byerly, and Jac Fitz-enz

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Killer Analytics: Top 20 Metrics Missing from Your Balance Sheet by Mark G. Brown

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The New Know: Innovation Powered by Analytics by Thornton May

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Social Network Analysis in Telecommunications by Carlos Andre Reis Pinheiro

Statistical Thinking: Improving Business Performance, Second Edition by Roger W. Hoerl and Ronald D. Snee

Taming the Big Data Tidal Wave: Finding Opportunities in Huge Data Streams with Advanced Analytics by Bill Franks

Too Big to Ignore: The Business Case for Big Data by Phil Simon

The Value of Business Analytics: Identifying the Path to Profitability by Evan Stubbs

Visual Six Sigma: Making Data Analysis Lean by Ian Cox, Marie A. Gaudard, Philip J. Ramsey, Mia L. Stephens, and Leo Wright

Win with Advanced Business Analytics: Creating Business Value from Your Data by Jean Paul Isson and Jesse Harriott

For more information on any of the above titles, please visit www.wiley.com.

Cover image: © iStockphoto.com/peepo Cover design: Michael Rutkowski

Copyright © 2014 by Lawrence S. Maisel and Gary Cokins.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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ISBN 978-1-118-17556-9 (Hardcover) ISBN 978-1-118-22711-4 (ePDF) ISBN 978-1-118-24015-1 (ePub)

I would like to dedicate this book to my wife, Claudia, whose patience and intelligence have always been a source of inspiration. I also want toacknowledgemy parents and brother, who provided gentle guidance, and my children, Nicole, Dana, and Jonathan, who always bring out the best in me.

Lawrence S. Maisel

I express my thanks in remembrance to Bob Bonsack, my true mentor at Deloitte and EDS, for educating and training me in business methods and bringing value to people. I also thank my wife, Pam Tower, for her endless patience when I am distracted with projects such as writing this book.

Gary Cokins

Preface

An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.

—Jack Welch

“Apple's Steve Jobs was known to explicitly discount the value of surveys and focus groups for designing new products. How do you explain this apparent anti-empiricism? One explanation is that, much like a creative scientist, people like Jobs recognize when there is not enough data or the right kind of data to form a theory. They recognize that, for completely new lines of products that will change a user's experience or behavior, the only useful data is experiential data, not commentary and reactions from those who have never used the product.