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Data and Analytics: who needs them?

December 19, 2014

Every day my in-box contains a few more emails exhorting me to adopt ‘data and analytics’. But when I seek practical examples of what this might mean, how it would add to the quality of my work, there don’t appear to be many examples to justify the investment of time or money.

It was therefore refreshing to spend time with Dave Cohen, a Principal Client Advisor from the IBM Watson group. ‘Watson’, as some will remember, was the computer which defeated the Jeopardy game show champions. Since then, it has increasingly been deployed in major industries such as healthcare and finance to simplify data extraction and support improved diagnostics. In those instances, it is either raising the quality of patient care or the assessment of risks. Now it is moving more directly into the world of complex contracts and supply networks.

In a webinar that we conducted today, Dave offered a series of illuminating case studies. For example, from the aerospace industry we saw how analytics can substantially improve aircraft availability. Not only does this improve contract performance, but it is the sort of approach that can more generally increase the momentum towards outcome-based contracts – a direction in which many wish to go and which is shown to bring real improvement in value, but until now many have struggled to put into effect.

We also gained insight to a contract manufacturing project and ways in which more holistic data analysis can support improved buying decisions, balancing risk, reliability and price with far greater accuracy and speed. It struck me that the proactive capability of a system like Watson would also support more regular renegotiation based on shifts in market conditions – surely a major value in this era of growing volatility and change.

A third example explored analytics as a way to capture and disseminate key contract data and trends. This could be through identification of specific risks – at the level of individual contracts, or in relative terms between types of agreement, or based on the terms applying in industries, geographies or product divisions. For highly regulated industries, this capability is fast becoming mandatory. For others, it will represent a source of competitive advantage as they increase reliability and maximize savings or profitability through enhanced efficiency.

Finally, Dave described an IBM internal project to streamline development of customer proposals. Analytics is enabling rapid evaluation of the customer RFx, to ensure an optimum solution. I find this especially interesting since IACCM’s work on client value clearly indicates the importance of helping customers define their needs, rather than responding to what they think they want. A true added-value supplier assists in shaping the solution and as a result is able to operate with far greater effectiveness. This means more time is spent on continuous improvement and innovation, resulting in a much happier customer. It also means that the supplier generates far better margins from their business.

If you are still wondering why and how data analytics will impact you and your business, I recommend that you take the time to listen to this webinar. It can be accessed at https://www.iaccm.com/resources/?id=8329&src=Watson

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