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The Analytical Catalyst
Cornelius KaestnerPrincipal The Boston Consulting Group
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Introductions
Global management consulting firm and the world's leading advisor on business strategy
Our ambition is to drive lasting competitive advantage for our clients
50 years of leading business thinking, e.g., • Applying experience curves to
business• Growth share matrix (2x2)• Trading up / trading own
9,700 staff in 81 offices
About About About meAbout me
Expert Principal at BCG focused on Big Data and Advanced Analytics
Example engagements used to drive BCG's Big Data an Advanced analytical capabilities:• Enhancing promo effectiveness in
retail• Applying predictive analytics to target
airline, cruise line, and banking customers
Educational background• Yale: BA App. Math (hons) & BA Econ
(hons)• IMD: MBA (president's award)
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Many questions, few answers
At the beginning of our unexpected journey
• What should be our ambitions in analytics?–And when do we know if we've achieved them?
• What is possible to do in house? Where should we partner?–When will analytics be a driver of competitive advantage for BCG?
• What capability gaps do we face?– Tools? People and skills? Infrastructure?
• How do we get started?• How do we get the rest of BCG excited about analytics?
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Since then: tremendous strides
Little senior-level exposure to Big Data and Advanced Analytics efforts
No view on the role of analytics at BCG
Few, disjointed teams delivering targeted analytical solutions
Little effort to enhance skills of broader consulting organization
Limited understanding of how to use tools and infrastructure to drive value
Where we started Where we are now
Big Data and Advanced Analytics a top priority for BCG leadership
Significant investment and development focus
BCG Advanced Analytical teams aligned and coordinated across the company
Alteryx and Tableau available to all consultants for regular case work
Step change in tools and infrastructure capabilities within the firm
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4 components to catalyzing analytics
What we've learned
• Democratize the analytical opportunity
• Introduce the art of the possible
• Focus on value delivered
• Keep building
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We made Alteryx available to everybody...
Democratize the analytical opportunity (I)
1,291
0
500
1,000
1,500
3/1/13 11/1/139/1/137/1/13 3/1/141/1/145/1/13
Unique installations
Functionality
Ease of use
Commercial flexibility
Dedicated support
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...and provided fundamentals to make adoption easier
Democratize the analytical opportunity (II)
• One-on-one training when first users adopted the tool
• Tracking of internal experts to create a user community
• Introductory training to share basics of the Alteryx tool
• Detailed support from Alteryx to help crack more challenging use cases
• Infrastructure available for larger scale data cases
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We embraced distributed innovation: no limits on use cases...
Democratize the analytical opportunity (III)
Simple problemsLarge data sets
Large data setsMany data sources
Complex data setsPredictive analytics
Identify trends based on transaction data
Analyze promotional events for effectiveness
Predictive behavioral segmentations
We made no effort to control the use of analytics, rather we trusted our colleagues to validate
quality
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...and invested in cool projects to ensure success
Democratize the analytical opportunity (IV)
• Building a model to calculate the effectiveness of promotions that could quickly be deployed across retailers
• Designing a customer segmentation for a hotel chain that allowed valuable customers to be prioritized, independent of their stay history
• Building a real estate planning model that enables retailers to manage their footprint much more effectively
• Predicting server failures based on equipment event logs and launching preventive maintenance to avoid equipment failure
• etc.
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• Raise awareness in important forums
• Use practitioners to share the work
• Articulate why this is not business as usual
• Visualization > Algorithms
Share new and exciting work with senior management
Introduce the art of the possible (I)
Bring out the inner "geek"
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Cool algorithms show what you've done...
Introduce the art of the possible (II)
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...but visualization shows why it matters
Introduce the art of the possible (III)
Ex: 2For offers beat price cuts...
Ex: 2For offers beat price cuts... ... every time... every time
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Numerous paths to value
Focus on Value Delivered (I)
• Savings for the company• Improvements to current products• Development of new products• New business models• etc.
Need to find what resonates with your organization
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We built a new promo effectiveness offering for our clients
Focus on Value Delivered (II)
Pre
-pro
cess
ing
Client dataProduct
Hierarchy
Sales
COGS
Vendor funding
Promo Calendar
Opex rules
Promo ID / SKU
aggregation
Seasonality
Core economic calculations
Cannibalization, Halo, Pull
Forward
Baseline
P&L by promo ID by SKU
Custom Standardized
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What it looks like in Alteryx
Focus on Value Delivered (III)
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Standardized offer dramatically improves value proposition...
Focus on Value Delivered (IV)
Old approachOld approach New approachNew approach
Custom promo model built for each client
Development time to first economic model output: ~12 weeks
Initial analysis focused on pilot categories
Analyses executed by standard case teams; need to ensure skill set is available
Only custom piece is data aggregation
Economic model can be run in one day once data aggregated
Model fully scalable: all categories can be analyzed at once
Analyses executed by BCG Strategic Analytics team – skill set is already confirmedMost importantly: $300M+ client value, $10M+
client revenue and dozens of live client discussions
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Ambition is to continue to expand what we can deliver
Keep building (I)
Analytical complexity
Scale of data
Delivery approach
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Delivery will require continued capabilities investment
Keep building (II)
People & teamsPeople & teams InfrastructureInfrastructureToolsTools
Aggressively pursue talent – especially those who can speak business and analytics
Identify key gaps in people model – roles, incentives, career progression, etc.
Accelerate deployment of existing tools within BCG
Test and deploy new tools with complementary capabilities
Expand use of cloud and Hadoop
Expand availability and use of AWS
Continuous effort to transform "advanced analytics" offerings to "business as usual"
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4 components to catalyzing analytics
Recap: What we've learned
• Democratize the analytical opportunity
• Introduce the art of the possible
• Focus on value delivered
• Keep building
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THANK YOU!
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