TDWI and IBM on Predictive Analytics: A Tale of Two Focii

Usually I’m more impressed with the TDWI half of a sponsored webinar than by the corporate presentation. Today, that wasn’t the case. The subject was supposed to be about predictive analytics, but the usually clear and focused Fern Halper, TDWI Research Director for Advanced Analytics, wasn’t at her best.

Let’s start with her definition of predictive analytics: “A statistical or data mining solution consisting of algorithms and techniques that can be used on both structured and unstructured data to determine outcomes.” Data mining uses statistical analysis so I’m not quite sure why that needs to be mentioned. However, the bigger problem is at the other end of the definition. Predictive analysis can’t determine outcomes but it can suggest likely outcomes. The word “determine” is much to forceful to honestly describe prediction.

Ms. Halper’s presentation also, disappointingly compared to her usual focus, was primarily off topic. It dealt with the basics of current business intelligence. There was useful information, such as her referring to Dave Stodder’s numbers showing that only 31% of surveyed folks say their businesses have BI accessible to more than half their employees. The industry is growing, but slowly.

Then, when first turning to predictive analytics, Fern showed results of a survey question about who would be building predictive analytics. As she also mentioned it was a survey of people already doing it, there’s no surprise that business analysts and statisticians, the people doing it now, were the folks they felt would continue to do it. However, as the BI vendors including better analytics and other UI tools, it’s clear that predictive analytics will slowly move into the hands of the business knowledge worker just as other types of reporting have.

The key point of interest in her section of the presentation was the same I’ve been hearing from more and more vendors in recent months: The final admission that, yes, there are two different categories of folks using BI. There are the technical folks creating the links to sources, complex algorithms and reports and such, and there are the consumers, the business people who might build simple reports and tweak others but whose primary goal is to be able to make better business decisions.

This is where we turn to David Clement, Product Marketing Manager, BI & Predictive Analytics, IBM, the second presenter.

One of the first things out of the gate was that IBM doesn’t talk about predictive analytics but about forward looking business intelligence. While the first thought might be that we really don’t need yet another term, another way to build a new acronym, the phrase has some interesting meaning. It’s no surprise that a new industry where most companies are run by techies focused on technology, the analytics are the focus. However, why do analytics? This isn’t new. Companies don’t look at historic data for purely nostalgic reasons. Managers have always tried to make predictions based on history in order to better future performance. IBM’s turn of phrase puts the emphasis on forward looking, not how that forward look is aided.

The middle of his presentation was the typical dog and pony show with canned videos to show SPSS and IBM Cognos working together to provide forecasting. As with most demos, I didn’t really care.

What was interesting was the case study they discussed, apparel designer Elie Tahari. It’s a case study that should be studied by any retail company looking at predictive analytics as a 30% reduction of logistics costs is an eye catcher. What wasn’t clear is if that amount was from a starting point of zero BI or just adding predictive analytics on top of existing information.

What is clear is that IBM, a dinosaur in the eyes of most people in Silicon Valley and Boston, understands that businesses want BI and predictive analytics not because it’s cool or complex or anything else they often discuss – it’s to solve real business problems. That’s the message and IBM gets it. Folks tend to forget just how many years dinosaurs roamed the earth. While the younger BI companies are moving faster in technology, getting the ears of business people and building a solution that’s useful to them matters.

Summary

Fern Halper did a nice review of the basics about BI, but I think the TDWI view of predictive analytics is too much industry group think. It’s still aligned with technology as the focus, not the needs of business. IBM is pushing a message that matters to business, showing that it’s the business results that drive technology.

Businesses have been doing predictive analysis for a long time, as long as there’s been business. The advent of predictive analytics is just a continuance of the march of software to increase access to business information and improve the ability for business management to make timely and accurate decisions in the market place. The sooner the BI industry realize this and start focusing less on just how cool data scientists are and more on how cool it is for business to improve performance, the faster adoption of the technology will pick up.

Leave a Reply

Your email address will not be published. Required fields are marked *