I had a brief twitter exchange with Jim Davis, Chief Marketing Officer, SAS Institute on Return of Investment on Business Analytics Projects for customers. I have interviewed Jim Davis before last year https://decisionstats.com/2009/06/05/interview-jim-davis-sas-institute/
Now Jim Davis is a big guy, and he is rushing from the launch of SAS Institute’s Social Media Analytics in Japan- to some arguably difficult flying conditions in time to be home in America for Thanksgiving. That and and I have not been much of a good Blog Boy recently, more swayed by love of open source, than love of software per se. I love equally, given I am bad at both equally.
Anyways, Jim’s contention ( http://twitter.com/Davis_Jim ) was customers should go in business analytics only if there is Positive Return on Investment. I am quoting him here-
What is important is that there be a positive ROI on each and every BA project. Otherwise don’t do it.
That’s not the marketing I was taught in my business school- basically it was sell, sell, sell.
However I see most BI sales vendors also go through -let me meet my sales quota for this quarter- and quantifying customer ROI is simple maths than predictive analytics but there seems to be some information assymetry in it.
Here is a paper from North Western University on ROI in IT projects-.
but overall it would be in the interest of customers and Business Analytics Vendors to publish aggregated ROI.
The opponents to this transparency in ROI would be market leaders in market share, who have trapped their customers by high migration costs (due to complexity) or contractually.
A recent study listed Oracle having a large percentage of unhappy customers who would still renew!, SAP had problems when it raised prices for licensing arbitrarily (that CEO is now CEO of HP and dodging legal notices from Oracle).
Indeed Jim Davis’s famous unsettling call for focusing on Business Analytics,as Business Intelligence is dead- that call has been implemented more aggressively by IBM in analytical acquisitions than even SAS itself which has been conservative about inorganic growth. Quantifying ROI, should theoretically aid open source software the most (since they are cheapest in up front licensing) or newer technologies like MapReduce /Hadoop (since they are quite so fast)- but I think that market has a way of factoring in these things- and customers are not as foolish neither as unaware of costs versus benefits of migration.
The contrary to this is Business Analytics and Business Intelligence are imperfect markets with duo-poly or big players thriving in absence of customer regulation.
You get more protection as a customer of $20 bag of potato chips, than as a customer of a $200,000 software. Regulators are wary to step in to ensure ROI fairness (since most bright techies are qither working for private sector, have their own startup or invested in startups)- who in Govt understands Analytics and Intelligence strong enough to ensure vendor lock-ins are not done, and market flexibility is done. It is also a lower choice for embattled regulators to ensure ROI on enterprise software unlike the aggressiveness they have showed in retail or online software.
Who will Analyze the Analysts and who can quantify the value of quants (or penalize them for shoddy quantitative analytics)- is an interesting phenomenon we expect to see more of.
- SAS Turns out in Force for Internet Summit 2010 (eon.businesswire.com)
- From Web Analytics & SEM To Business Intelligence (searchengineland.com)
- Twitter Rolls Out Analytics Tool (hubspot.com)
- Social Media ROI: Customer Engagement, Brand Interactivity, And Revenue (lockergnome.com)
- Drowning in data? Start with a clear strategy to effectively measure your marketing. (kilgannonsays.wordpress.com)
- Twitter Testing Analytics Tool (informationweek.com)
Here is an interview with Jim Davis, SAS Institute SVP and Chief Marketing Officer.
Traditional business intelligence (BI) as we know it is outdated and insufficient-
Jim Davis, SAS Institute..
Ajay -Please describe your career in science to your present position. What advice would you give to young science graduates in this recession? What advice would you give to entrepreneurs in these challenging economic times?
Jim – After earning a degree in computer science from North Carolina State University, I embarked on a career path that ultimately brought me to SAS and my role as senior VP and CMO. Along the way I’ve worked in software development, newspaper and magazine publishing and IT operations. In 1994, I joined SAS, where I worked my way up the ranks from enterprise computing strategist focused on IT issues to program manager for data warehousing to director of product strategy, VP of marketing and now CMO. It’s been an interesting path.
My advice to new graduates embarking on a career is to leave no stone unturned in your search, particularly in this economy, but also consider adding to your skill set. A local example here in the Research Triangle area is at N.C. State University’s Institute for Advanced Analytics, which offers a master’s degree that combines business and analytical skills. These skills are very much in demand. SAS CEO Jim Goodnight helped establish this 10-month degree program where the first 23 graduating all found solid jobs within four months at an average salary of $81,000. Many of this year’s class, facing the worst economy since the Great Depression, have already found jobs. For entrepreneurs today, my advice is simple: make absolutely sure you’re creating a product or service that people want. And especially given the challenging economic environment, resolve to improve your decision making. Regardless of industry or company size, business decisions need to be based on facts, on data, on science. Not on hunches and guesswork. Business analytics can help here.
Ajay – What are some of the biggest challenges that you have faced and tackled as a marketing person for software? What continues to your biggest focus area for this year?
Jim – Among the biggest challenges that the SAS marketing team has worked to overcome is the perception that analytical software – advanced forecasting, optimization and data mining technologies – are way too complex, difficult to use, and only useful to a small band of highly trained statisticians and other quantitative experts, or “quants.” With lots of hard work, we’ve been able to show the marketplace that powerful tools are available in business solutions designed to solve industry issues.
The biggest marketing challenge now is showing the market how SAS offers unique value with its broad and integrated technologies. The industry terminology is confusing with some companies selling Business Intelligence tools that when you scratch the surface are limited to reporting and query operations. Other SAS competitors only provide data integration software, and still others offer analytics. SAS is the only vendor offering an integrated portfolio of these three very important technologies, as well as cross-industry and industry-specific intelligent applications. This combination, which we and others are calling Business Analytics, is a very powerful set of capabilities. Our challenge is to demonstrate the real value of our comprehensive portfolio. We’ll get there but we have some work to do.
Ajay -It is rare to find a major software company that has zero involvement with open source movement (or as I call it with peer-reviewed code). Could you name some of SAS Institute’s contribution to open source? What could be further plans to enhance this position with the global community of scientists?
Jim – SAS does support open source and open standards too. Open standards typically guide open source implementations (e.g., the OASIS work is guiding some of the work in Eclipse Cosmos, some of the JCP standards guide the Tomcat implementation, etc.).
Some examples of SAS’s contributions to open source and open standards include:
Apache Software Foundation – a senior SAS developer has been a committer on multiple releases of the Apache Tomcat project, and has also acted as Release Coordinator.
Eclipse Foundation — SAS developers were among the early adopters of Eclipse. One senior SAS developer wrote a tutorial whitepaper on using Eclipse RCP, and was named “Top Ambassador” in the 2006 Eclipse Community Awards. Another is a committer on the Eclipse Web Tools project. A third proposed and led Eclipse’s Albireo project. SAS is a participant in the Eclipse Cosmos project, with three R&D employees as committers. Finally, SAS’ Rich Main served on the board of directors of the Eclipse Foundation from 2003 to 2006, helping write the Eclipse Bylaws, Development Process, Membership Agreement, Intellectual Property Policy and Public License.
Java Community Process — SAS has been a Java licensee partner since 1997 and has been active in the Java Community Process. SAS has participated in approximately 25 Java Specification Requests spanning both J2SE and J2EE technology. Rich Main of SAS also served on the JCP Executive Committee from 2005 through 2008.
OASIS — A senior SAS developer serves as secretary of the OASIS Solution Deployment Descriptor (SDD) Technical Committee. In total, six SAS employees serve on this committee.
XML for Analysis — SAS co-sponsored XML for Analysis standard with Microsoft and Hyperion.
Others — A small SAS team developed Cobertura, an open source coverage analysis tool for Java. SAS (through our database access team) is one of the top corporate contributors to Firebird, an open source relational database. Another developer contributes to Slide WebDav. We’ve had people work on HtmlUnit (another testing framework) and FreeBSD.
In addition, there are dozens if not hundreds of contributed bug reports, fixes/patches from SAS developers using open source software. SAS will continue to expand our work with and contribute to open-source tools and communities.
For example, we know a number of our customers use R as well as SAS. So we decided to make it easier for them to access R by making it available in the SAS environment. Our first interface to R, which enables users to integrate R functionality with IML or SAS programs, will be in an upcoming version of SAS/IML Studio later this summer. We’re also working on an R interface that can be surfaced in the SAS server or via other SAS clients.
Ajay – What is business intelligence, and business analytics as per you? SAS is the first IT vendor that comes in the non sponsored link when I search for “business intelligence’ in Google. How well do you think the SAS Business Intelligence Platform rates across platforms from SAP, Oracle , IBM and Microsoft.
Jim – Traditional business intelligence (BI) as we know it is outdated and insufficient.
The term BI has been stretched and widened to encapsulate a lot of different techniques, tools and technologies since it was first coined decades ago. Essentially, BI has always been about information delivery, be it in static rows and columns, graphical representations of information, or the modern and hyper-interactive dashboard with dials and widgets.
BI technologies have also evolved to include intuitive ad-hoc query and analysis with the ability to drill down into the details within context. All of these capabilities are great for reacting to business problems after they have occurred. But businesses face diverse and complex problems, global competition grows exponentially, and increasingly restrictive regulations are just around the corner. They need to anticipate and manage change, drive sustainable growth and track performance.
Now they also have to operate in the midst of a ruinous global credit and liquidity crisis. Reactionary decision making is just not working. Now more than ever, progressive organizations are looking to leverage the power of analytics, specifically business analytics. Why? Real business value comes from capitalizing on all available information assets and selecting the best outcome based on every possible scenario.
Proactive evidence-based decisions – not just information delivery – should drive informed decisions. That is business analytics and that is what SAS provides its customers.
Businesses require robust data integration, data quality, data and text mining, predictive modeling, forecasting and optimization technologies to anticipate what might happen, avoid undesired outcomes and course correct.
These capabilities need to be in synch and integrated from the ground up rather than cobbled together through acquisitions. More importantly, they cannot be part of a monolithic platform that requires 2-3 years before any real value is derived.
They must be part of an agile framework that enables an organization to address its most critical business issues now and then add new functionality over time. A business analytics framework — like the one SAS provides — enables strategic business decisions that optimize performance across an organization.
Ajay – For 4 decades SAS Institute created, nurtured and sustained the SAS language, often paying from its pocket for conferences, papers. Till today SAS Language code on your website is free and accessible to all without a registration unlike other software companies. What do you have to say about third party SAS language compilers like “Carolina” and “WPS”
Jim – There is no doubt that much of the power and flexibility behind our framework for business analytics is derived from our SAS language. At its core, the Base SAS language offers an easy-to-learn syntax and hundreds of language elements, pre-built SAS procedures and re-usable functions. Our focus on listening and adapting to customer’s changing needs has helped us, over the years, to sustain and continuously improve the SAS language and the SAS products that leverage it.
Competition comes in many forms and it pushes us to innovate and keep delivering value for our customers. Language compilers or code interpreters like Carolina and WPS are no exception.
One thing that sets SAS apart from other vendors is that we care so deeply about the quality of results.Our Technical Support, Education and consulting services organizations really do partner with customers to help them achieve the best results.
As Anne Milley, SAS’ director of technology product marketing, told DecisionStats this March, customers have varied and specific requirements for their analytics infrastructure. Desired attributes include speed, quality, support, backward and forward compatibility, and others. Certain customers only care about one or two of these attributes, other customers care about more. With our broad and deep analytics portfolio, SAS can uniquely provide the analytics infrastructure that meets a customer’s specific requirements, whether for one or many key attributes. Because of this, an overwhelming majority vote with their pocketbooks to select or retain SAS.
For example, as Anne noted, for some customers with tight batch-processing windows, speed trumps everything. In tests conducted by Merrill Consultants, an MXG program running on WPS runs significantly longer, consumes more CPU time and requires more memory than the same MXG program hosted on its native SAS platform.
At SAS, we provide a complete environment for analytics — from data collection, manipulation, exploration and analysis to the deployment of results. One example of our continuous innovation, and where we are devoting R&D and sales resources, is the SAS In-Database Processing Initiative. Through in-database analytics, customers can move computational tasks (e.g., SAS code, SQL) to execute inside a database. This streamlines the analytic data preparation, model development and scoring processes. Customers needing to leverage their investments in mixed workload relational database platforms will benefit from this SAS initiative. It will help them accelerate their business processes and drive decisions with greater confidence and efficiency.
Ajay – Are you going to move closer for an acquisition? Or be acquired? Which among the existing BI vendors are you most comfortable with in synergy of products and philosophy?
Jim –SAS is in an enviable position as the largest independent provider of business intelligence (BI) software, and the leader in the rapidly emerging field of business analytics, which combines BI with data integration and advanced analytics. We have no plans, nor have had any talks regarding SAS being acquired.
As for SAS acquiring another company, we continuously look for technologies complementary to our wide and deep lineup of business analytics solutions, many of which are targeted at the specific needs of industries ranging from banking, insurance and pharma to healthcare, telecom, manufacturing and government.
Last year, SAS made two acquisitions, IDeaS Revenue Optimization, the premier provider of advanced revenue-management and optimization software for the hospitality industry, and Teragram, a leader in natural language processing and advanced linguistic technology. IDeaS delivers to SAS and our hotel and hospitality customers software sold as a service that meets a critical need in this industry. Teragram’s exciting technology has enhanced SAS’ own robust text mining offerings.
Ajay – Jim Goodnight is a legend in philanthropy, inventions, and as a business leader (obviously he has a fine team supporting him). Who will be the next Jim Goodnight ?
Jim – I think Jim Goodnight best addressed the question of succession plans at SAS best a few years ago when he noted that the business world often places undue emphasis on the CEO and forgets about the CTO, CMO, CFO and other senior leaders who play a key role in any company’s success. SAS has a very strong executive management team that runs a two billion-dollar software company very effectively. If a “next Jim Goodnight” is needed in the future, SAS will be ready and will continue to provide our customers with the business analytics software they need.
Jim Davis, Senior Vice President and Chief Marketing Officer for SAS, is responsible for providing strategic direction for SAS products, solutions and services and presenting the SAS brand worldwide. He helped develop the Information Evolution Model and co-authored “Information Revolution: Using the information Evolution Model to Grow your Business.” By outlining how information is managed and used as a corporate asset, the model enables organizations to evaluate their management of information objectively, providing a framework for making improvements necessary to compete in today’s global arena.
SAS (www.sas.com) is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions delivered within an integrated framework, SAS helps customers at more than 45,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world The Power to Know®.