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Analytics heats up

Corporate data is only as useful as the information you can extract from it.
By Stacy Cowley , Network World , 09/05/2005
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When business-analytics projects work, the success stories can be dramatic. Witness the results posted by the Dreyfus Corp., which manages $165 billion in mutual fund assets. Looking for a way to lower churn and draw more business from current customers, the company rolled out CRM and analytics software from SAS Institute in the late 1990s and pored through the data.

It found several red flags. Sudden increases or decreases in a customer's contact with Dreyfus. More transactions between a customer's funds. Soon Dreyfus had a model it could use to proactively seek out potentially restless customers and target them with tailored sales calls. The company watched its investment redemption rate drop from more than 20% annually to as low as 7%, while its overall customer attrition fell nearly 50%.

Such tales are driving interest in analytics software, a broad field IDC estimates grew 12% in 2004, to $15.1 billion worldwide. It shares a fuzzy border with the even broader market for business intelligence (BI) software, an umbrella term encompassing products that range from technical tools for storing and modeling data to high-level applications that present corporate data in user-friendly formats, such as scorecards and dashboards.

BI for the masses is a trend industry analysts have talked about for years with growing fervor and conviction. As companies become savvier at using enterprise applications such as CRM, the pool of data available for analysis grows larger and more detailed. Regulatory changes such as the Sarbanes-Oxley Act are forcing businesses to strengthen their corporate data-tracking and analysis systems. Meanwhile, as software advances, increasingly sophisticated tools are available to help non-IT staffers such as sales and finances executives tap into business data.

"The big movement has been toward consolidating products into suites," says Nucleus Research analyst Kathy Quirk. "Historically, BI tools were used by a small percentage of people within the company. Often you had to get the IT department involved to produce the reports and pull the data together. The move now is to reach out to your basic business user."

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