“Analytics should disrupt business”

Domain experts such as Ashok Banerjee of Flipkart and Kunnal Sharma of Times of Money decode the growing power of analytics

e4m by Sai Prasanna
Updated: Jan 17, 2013 9:41 PM
“Analytics should disrupt business”

Imagine driving a car only with a rear-view mirror. Data can perform a similar function for business but when dealt with aptly, it allows one to predict and build a million dollar company. It is ideally possible to serve only a fourth of the population and hence segmentation becomes key to look at larger growth markets.

Analytics in the online space
In such a background, Ashok Banerjee, VP – Data Platform and Supply Chain Engineering, Flipkart reiterated that analytics is not about gut-feel anymore. It is an enabler in decision-making even though its unpredictability makes it an after-thought. The only guarantee is that every decision taken on the back of analytics will be better, and online players have begun to leverage the strength that analytics brings to the table.

The market structure of an e-commerce player for instance is such that every product category goes through a phase of life. Banerjee explained that what must be evaluated is which phase the product is in. Word-of-mouth effect is exponential. A company must understand which product category will get around through word-of-mouth. There is also a need to assess the shape of traffic expected on the website and which items sell instantaneously and which over a period of time. For online players, especially in the e-commerce vertical, there is susceptibility to positive and negative news. Quoting the example of baby food to explain this point, Banerjee said, “While a million consumers must have recommended it, one negative feedback about an adverse effect can have far-reaching consequences.” And in the midst of all this, the dilemma with platforms such as social media is that people hand out ideas, but do not tell what to purchase.

Three key learnings for Banerjee from the Flipkart experience is:
• Big data is not analytics; it merely enables analysis. Online, you can get larger, more accurate data unlike offline.
Analytics is not reporting only. It should also translate into action.
Insights are more than just a confirmation of the hypothesis. We ought to base a lot of our decisions on analytics.

Why business needs analytics
Kunnal Sharma, Business Head – Global Remittances, Times of Money brought another perspective to the subject using analytics in the Times of Money (ToM) context. ToM was the first across the world to come up with their ‘Remit to India’ offering which enabled remittances from NRIs. A second offering ‘Remit to Home’ provided the same service for NRIs of other countries. In the latter case, ToM had no inkling as to how the behaviour patterns of different communities. He emphasised that to succeed, you should know your consumer. In such a scenario, relying on data can help understand the community and succeed. ToM began ‘Remit to Home’ with analytics and then went with gut-feel.

Over the last five to six years, conversations about analytics have taken charge all around. From the business perspective, it enables a company to understand its customers and their habits. In the 90s, kirana store owners knew regular customers and their buying patterns. Today, consumers give companies the right to track their IP addresses, right to drop cookies. There is significant volume of data that the consumer is giving away. It is time to move away from data crunching to analysing. Sharma gave the example of eBay while talking about drawing out a strategy. They churn out close to 170 million keywords with a bid amount for each every day to optimise on Google Adwords only to acquire consumers. They also preserve consumer data for 10 quarters, having a base of 100 million consumers and 300 million items to be sold. Targeting is not only for the registered user base but also for the regular database. The clincher to get into analytics is to identify ‘who is my consumer’. Another critical point is that analytics has to get into the executive level and should not be restricted merely to the drawing board. How we make sense of data is critical. Nimbleness in taking decisions is essential.

Unlocking value through analytics
“Nobody really wants big data; what they want is big impact and big results.” Pankaj Rai, Director at Dell Global Analytics used this Michael Dell quote to state that analytics is a means to an end. Dell has always had a business model where customer-centric interactions, visits to the website and other such interaction have been recorded as a large portion of the company’ business is direct. It leveraged the data which is seen in the exponential growth with Dell becoming a $50 billion company within 15 years of set-up.

Analytics has evolved from being applied ‘in pockets’ to ‘pervasive’. In the pre-2000, analytics was nascent and typically went by a different name. It was primarily reporting, MIS and business planning – which was being done in respective business units independently.

From 2000-10, analytics as an industry matured with centralisation and off-shoring. Analytics was able to get a wider footprint in the business and started becoming key to business decisions. Post 2010, analytics gained broader traction. It is now pervasive across functions with business units enabled to run basic analytics on their own. In a company like Dell, the analytics hub focusses on more complex challenges. The analytics team is the strategic team that has to commoditise actions and push them into the business. Dell Global Analytics’ vision is to enable decisions and deliver value through analytics.

Analytics should be disrupting business and there should be cross-fertilisation. Dell wants to embed social media in the fabric of the company and across all business functions. ‘Listen-Engage-Act’ is the framework that is followed. It has developed an in-house Social Net Advocacy tool that monitors online conversations about Dell. It helps to assess the feedback around the company and obtain instantaneous feedback on key aspects regarding products and services.

The business leaders were speaking at the inaugural edition of the Pitch Analytics in Action conference held in Bangalore on January 16, 2013. The session was moderated by Tushar Vyas, Managing Partner, GroupM South Asia.

Pitch Analytics in Action was powered by The Hindu Business Line. Dekhooh was Outdoor Partner for the event, CIOL.com was the Online Partner, Institute for Competitiveness was the Think Tank Partner, Marketelligent was the Knowledge Partner, and 24 Frames Digital was the Webcast Partner.

For more updates, be socially connected with us on
WhatsApp, Instagram, LinkedIn, Twitter, Facebook & Youtube