The Future Now: Analytics and Business ValueWed, 02/21/2018 - 12:04
Will a client cancel its telephone line? When will a home furnishings customer need a new bedroom set? Is a banking client likely to default? No one can predict the future but software firm SAS believes data analytics can help businesses arrive at a reliable forecast.
“Companies have seen the value of analytics. It is a tool that helps you to prevent what is going to happen and consequently enforce actions to optimize and thus modify client behavior,” says Héctor Cobo, Regional Vice President Mexico, Central America and Caribbean for SAS.
Armed with the power of Big Data, SAS has been helping companies and business leaders make decisions for 41 years. Although SAS' products and services can be used in every industry that generates data, the financial sector has become one of its main niches. “Almost every bank in the country uses SAS. We help them determine the amount of credit they can give to a customer, the possibility that this customer will pay or default and which financial product may be most attractive for each person depending on their life cycle,” Cobo says.
Analytics is the powerful engine that permits SAS to map out preferences. Using math, statistics, predictive models and machine-learning techniques, SAS’ tool allows companies to find patterns and extract knowledge from recorded data. According to Marketing Intelligence Firm IDC, in 2013, 22 percent of generated data could be analyzed but less than 5 percent was actually analyzed. By 2020, data available for analysis could grow to more than 35 percent thanks to the increase in data coming from embedded systems. IDC also estimates that by 2020 the percentage of information that is valuable and susceptible to analysis could double, reaching almost 10 percent thanks to analytics technologies. Although the number of companies that offer analytical tools has increased in the last few years, Cobo says that most only use data subsegments instead of using the entire bulk of information. “The problem of generating models working only with information subsegments is that you miss the big picture and thus all the possibilities. That is why we always work with the entire set of data. This way, we make sure that we generate the best possible model for them.”
Regardless of the economic situation — crisis or bonanza — Cobo says the company has continued to grow. “What has boosted SAS’ growth is the value its services bring to the table. When a company is growing, the natural question is, how do you continue growing? When a company is in crisis, the question is, what situation led to the crisis and what can be done to keep competing? In both situations, companies need to use their information better.”
The use of information and SAS software is not restricted to the financial sector. Insurance companies, retailers, telecom companies, hotels, manufacturing companies and governments are among the players using analytics. Though it is true that nowadays almost every industry generates a great quantity of data that is appropriate for analysis, Cobo says that manufacturing is one area in which Mexico SAS is not as present as it should be, although that should start changing. He cites a theory from psychology called Maslow’s Hierarchy of Needs wherein people strive to achieve increasingly higher needs, often portrayed as a pyramid: “Just now, the manufacturing sector in Mexico is arriving at Maslow’s digital pyramid. They now have the time to sit down and analyze what needs to be done with all the information they usually gather.”
The entrance of new companies to the digital world and the use of big data represents a significant growth opportunity. IDC says that in 2013, almost 60 percent of the digital universe was generated in established countries such as the US, Canada, Europe, Australia and Japan. However, it estimates that by 2020 this trend will shift and 60 percent of the digital universe will be generated by emerging markets. This forecast is in line with SAS’ growth expectations. “Latin America is the region that experienced the most growth in the past year. The US and Europe have more mature markets but Mexico still offers a lot room for growth,” says Cobo. He adds that the true challenge is not finding new industries or adapting products but getting companies to see the true value of SAS’ services. “We are helping businesses become more efficient with creative growth and competitive strategies.”