Session 2 competing on analytics with internal processes
- 1. Competing on Analytics with Internal Processes Financial, Manufacturing, R&D, and Human Resource Applications Educator Review prepared by Dr. Albin and Dr. Thandeeswaran St. Joseph’s Institute of Management St. Joseph’s College (Autonomous) Tiruchirappalli
- 2. AoL • Students will understand and appreciate the strategic and competitive advantage due to the application of business analytics in the internal processes of the organisation
- 3. Application domains for Analytics (Business processes) • Internal – Finance and accounting – R&D – Manufacturing – HRM • External – Customer driven processes – Supplier driven processes
- 4. Business Analytics • Analytics for decision support • Decisions involving strategic capability and competitive advantage – Customer-related applications – Measurable improvements in businesses processes (Financial, operational,… performance)
- 5. Common Analytical Applications for Internal Processes • Activity-based costing (ABC) • Bayesian inference • Bio-simulation • Combinatorial optimization or integer programming • Constraint analysis • Experimental design • Future-value analysis • Monte Carlo simulation • Multiple regression analysis • Neural network analysis • Textual analysis • Yield analysis
- 6. Competing on Internal Processes • Internal – Finance and accounting – R&D – Manufacturing – HRM
- 7. Financial Analytics • Most direct to financial performance • Categories – External reporting to regulatory bodies and shareholders – Enterprise performance management (management reporting and scorecards) – Cost management – Investment decisions – Shareholder value analysis
- 8. Financial Analytics Category 1. External reporting to regulatory bodies and shareholders • Cisco systems – instant reporting • HP – error and correction • Dell – predictive model and prompt action
- 9. Financial Analytics Category 2. Enterprise performance management (Management reporting and scorecards) – Broader perspective / broader questions – Explaining financial performance through non- financial factors – A management team that manages all its sources of value (tangible and non-tangible and current and future) has significant advantage over others who do not.
- 10. Financial Analytics Cases 2. Performance management (Management reporting and scorecards) • Insurance company turnaround • A medium-sized semiconductor firm’s new focus • Intel and others following suit • Transformation ambit – Objectives – Customer profitability – Reporting system
- 11. Financial Analytics Category 3. Cost management – Broader perspective / broader questions – Explaining financial performance through non- financial factors – A management team that manages all its sources of value (tangible and non-tangible and current and future) has significant advantage over others who do not.
- 12. Financial Analytics Cases 3. Cost management 1. Distribution channel and customer pricing 2. WorldCom -> MCI (bankruptcy to profit) 3. RBC Financial Group (profit to more profit) Activity Based Costing
- 13. Merger and Acquisition Analytics • Success rate • Bank of America acquisition of Fleet Bank – 48 hours deadline • P&G’s acquisition of Gillette – One year time and analysis • CEMEX’s takeover strategy – predicted benefits of imposing processes and systems on the target
- 14. Manufacturing, Operations, and Quality Analytics • Toyota, TQM, Six Sigma • Rocky Mountain Steel – Software tool: Profit Insight • Toshiba semiconductors – Visual analytics approach – Softwares: Minitab, Spotfire Decisionsite • Configuration problem solving (Predictive modelling) – Dell – Automobile – FordDirect software – Deere & Company – Google’s test before implementing strategy
- 15. R&D Analytics • Most analytical functions have been happening here • Systems biology and pharma • Vertex pharma – Shift from smart intuition to information based analysis – Cost of clinical trials – Use of simulation and analytics • Systems biology startup “Entelos Inc.” – computer platforms to simulate diseases and treatment • With J&J • Combining health and insurance profit
- 16. HR Analytics • HRIS • Cos. yet to compete on Analytics • Sports • Capital One, only one • Human capital and Talent management paradigms • Importance of QA…
- 17. …Thank you