Posts Tagged ‘Harrah’s’

CIOs Know That Analytics Are What Future Competition Is All About

Wednesday, April 20th, 2011
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CIOs Are Learning That Number Crunching Is Critical To Their Company's Success

CIOs Are Learning That Number Crunching Is Critical To Their Company's Success

Companies are all asking themselves one question: what’s it going to take to be successful? It turns out that a lot of the techniques that worked in the past won’t work anymore – lowering prices, etc. Going forward, the only thing that a modern company can complete on is their business processes. It turns out that the CIO plays a very big role in making a company’s processes the best that they can be…

Say Hello To The New Killer App: Analytics

Dr. Thomas Davenport has spent time studying how firms compete. What he has discovered is that the most successful companies have started to use analytics to move ahead of the pack.

Unlike in the past, these successful firms are using analytics across the entire firm – not just in one area. In order to do this, their IT departments are being asked to play a role that they’ve never had to do before. CIOs that are going to be successful in the future have got to understand what is going to be asked of them so that they can provide the company with the analytics support that it’s going to need.

The new use of analytics requires that the IT department be able to support the modeling and optimization that the firm will be doing. This requires building very large warehouses of data and then using it to dive deeper than just calculating average order size or average revenue per employee. Instead, now firms are going to want to know things like who their most profitable customer is, who has the most long-term profit potential, and who is most likely to cancel their account.

4 Sources Of Analytics Success

So what does a CIO need to do in order to create an IT department that will be able to support the company’s growing need for the answers that only analytics can produce? Simple, there are four steps that every CIO must take:

  • Focus On The Right Areas: analytics can be applied to a number of different areas of any company’s operations. However, the CIO needs to ensure that the company directs its analytics focus in the area that will yield the greatest reward for the company. This means picking between focusing on the company’s supply chain, its customer selection / loyalty / service, pricing, human resources, etc.

  • Hire The Right People: The IT department is going to have to reshape itself in order to provide the company with the analytical talent that it is going to need. This means that the CIO is going to have to work with the human resource department in order to teach them what kind of analytical talent you are looking for. Additionally, the staff that you hire need to not only be able to crunch numbers, but they also have to be able to clearly communicate to the rest of the company how they do their work and what the results mean.

  • Create The Right Culture: as the company evolves to use analytics to drive its business, the company’s culture is going to have to change also. This means that there will have to be a new respect for the processes of modeling, testing, and evaluating results that are produced by qualitative analysis. The IT department and the rest of the company will have to learn to make decisions based on facts, not gut feels.

  • Build The Right Technology: As much as having the right technology means having enough computing horsepower to process all of the data that needs to be crunched in a reasonable amount of time, it means more. It has a lot to do with having the right technology that will be needed to store and process the mountains of data that will be needed to feed the analytics engines that the company will now be running both day and night.

    • What All Of This Means For You

    CIOs will play a significant role in their company’s success going forward. Optimizing business process through the use of analytics is going to be required by every company and the IT department is going to be responsible for supporting these analytics staff and tools.

    The company is going to have to change the way that they do business in order to take advantage of the new analytics. These changes are going to impact the company’s focus, its culture, its staff, and its technology.

    The CIO will be required to restructure the IT department. The new focus will be on processing the large quantities of information that have been collected and creating results. CIOs who are able to understand the changes that will be required and implement them will be the ones that will lead their companies to success.

    - Dr. Jim Anderson
    Blue Elephant Consulting –
    Your Source For Real World IT Department Leadership Skills™

    Question For You: Do you think that the analytics experts should be part of the IT department or should they be somewhere else?

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    What We’ll Be Talking About Next Time

    It turns out that there are 3 different reasons why a CIO can end up making a bad decision. We’re going to take a look at each of these hidden decision making traps and show you how to identify them and, even more importantly, how to avoid them…

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    Posted in analytics | 2 Comments »

    Forgotten IT Skills: How To Ask Questions

    Monday, April 6th, 2009

    Good IT Departments Know How To Ask Good Questions

    Good IT Departments Know How To Ask Good Questions

    It’s easy to get caught up in all of the servers, routers, applications, and firewalls that make up a modern IT environment. After a while we tend to start thinking that the path to our next great IT insight must lie somewhere in this jungle of IT “stuff”. And that is where you’d be wrong!

    Ranjay Gulati, James Oldroyd, and Phanish Puranam are three researchers who have been studying this problem and they’ve made some interesting discoveries. They’ve come to realize that if IT folks like us want to help our firms uncover ideas for new products or services, then we may have to rediscover the ancient art of asking the right questions.

    I will confess to being just as guilty of this as everyone else. In order to be more productive, I try to ask pointed questions that get right to the (what else) point. The researchers are saying that this is exactly the wrong thing to be doing.

    What they are saying is that more often than not other parts of the company will have information and data that can help us uncover new products and solutions if only we know how to ask for it. If we re-train ourselves to start asking broad questions, then we will start to get exposed to more types of information.

    An example of this comes from the folks at Harrah’s. The IT department was helping out with a project that was designed to find out what hotels were in need of expansion. They asked the question “What is the demand for our hotel rooms?” Note what they didn’t ask: “What is our occupancy rate?” The broad way that the question was asked allowed both the occupancy rate and the number of people unable to book a room because of the hotel being full or because they were unwilling to pay the room rate to be counted. A much different answer!

    Getting IT staff to start asking broad questions is not easy. They will be giving up some efficiency, but the rewards can be great.

    Do you ask pointed or broad questions? Have you ever been surprised by the answer when  you asked a broad question? How could you get your IT staff to start asking broad questions? Leave me a comment and let me know what you are thinking.

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    Posted in product managment | 5 Comments »

    How IT Can Help Uncover New Products

    Monday, March 23rd, 2009

    IT Departments Have The Data Needed To Uncover New Products

    IT Departments Have The Data Needed To Uncover New Products

    “Alignment”, “Innovation” – arrgh! Who in the world of IT is not sick of hearing these two words used over and over again? Yes we’d like to be able to help out the rest of the business, but our IT budgets are being slashed left and right. We don’t have either the staff or the budget to launch a big new program to collect whatever data is needed in order to tell the company which direction it should go in. Or do we?

    It is in the nature of any IT department to collect data on our customers. We already have disk pack after disk pack of historical data about everyone who ever showed even the slightest interest in one of our company’s offerings let alone how much information we have on our existing customers.

    In that data lies the secret to how IT departments can help the rest of the company uncover new products. Ranjay Gulati, James Oldroyd, and Phanish Puranam are three researchers who have been studying this problem and they’ve made some interesting discoveries.

    Harrah’s is an owner of several casinos. Their IT department has historically collected reams of data on their customers in order to support targeted direct mail campaigns and attempts to increase customer loyalty.

    However, it was not until the IT department took a closer look at the data that they had already captured about their big spenders (“whales” in casino speak) that they realized that they had the answers that they needed in order to redesign their casinos in order to position games where they would get these customers to play even more.

    The Royal Bank of Canada faced a problem – its consumer credit division  needed to have more customers. The IT department went back and took a look at the credit card applications that they had rejected in the past. What they discovered is that many of these people had improved their credit scores since being rejected. This gave the bank a great set of potential card holders to go after.

    Clearly all IT departments are sitting on more customer data than anyone ever believed. Now we just have to figure out how to make that data work for us. It turns out that there are three principles that provide the core for doing this correctly. We’ll talk about them next time…

    Does your IT department store enough information on your customers? Have you ever gone back and tried to put that data to use? Were you successful? Leave me a comment and let me know what you are thinking.

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    Posted in alignment | 2 Comments »