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April 1, 2014 in Big Data, Business Analytics, Business Collaboration, Business Intelligence (BI), Business Performance Management (BPM), Cloud Computing, Customer Performance Management (CPM), Financial Performance Management (FPM), Information Applications (IA), Information Management (IM), IT Performance Management (ITPM), Location Intelligence, Operational Intelligence, Operational Performance Management (OPM), Sales Performance Management (SPM), Social Media, Supply Chain Performance Management (SCPM) | Tags: Business Analytics, Business Intelligence, Data, geographic information systems (GIS), GIS, Location Analytics | by Mark Smith | Leave a comment
Our latest benchmark research into the market for location analytics software finds significant demand for location-related technology that can improve business outcomes and generate relevant information for various types of users. (Location analytics is an extension of business analytics that can enhance the sophistication of data and processes by adding a geographic context.) My last analyst perspective on this topic discussed the business value of insights based on geography and what organizations are doing to advance their efforts here. Our research also shows, however, that most still lack satisfaction and confidence in using the technology. Just 12 percent of all participants said they are very satisfied with the location information and analytics available in their organization. Further analysis shows that satisfaction increases with use of a dedicated application for location analytics: 71 percent of those are satisfied or very satisfied, substantially more than those using location analytics within a BI tool (22%); findings are similar for both B2B and B2C use. We find similar levels of confidence in the quality of location information: 15 percent of those using a dedicated application are very confident in their location analytics. Confidence in the reliability of such information is essential to more organizations adopting location analytics.
One cause of limited satisfaction and confidence appears to be the difficulty of analyzing information that has a location context. Two-thirds of organizations said doing so requires significant effort or some effort, and 17 percent said that is very difficult or they cannot do it. Thus it is not surprising that about three in fiveorganizations plan to change the way they use location information in the next 12 to 18 months. For more than 40 percent each, that change is driven by efforts to improve processes: a new initiative to improve information and decision-making (51%), a need to improve business-to-business planning and collaboration (50%), the desire to promote operational efficiency (49%) and as part of a wider analytics and business intelligence initiative (44%). Participants with IT titles most often identified as the driver a new initiative improving information and decision-making (61%), as did those from the services (69%) and government (63%) industry sectors; those working in lines of business insisted more on seeking change to improve B2B planning and collaboration (54%). The need for improvement shows that organizations recognize a potentially important role for location analytics in various business processes, from information use to decision-making.
A range of technologies can be used for location analytics, but not all options work equally well. Today nearly half (49%) of organizations use spreadsheets heavily for analyzing information that includes location data; significantly fewer use other tools heavily – custom applications (36%), analytic or BI tools (34%) and a geographic information system (GIS, 23%). Many organizations use business applications heavily for analyzing this type of information, most often customer relationship management (CRM, 28%), supply chain management (16%) and enterprise asset management (14%) systems. Yet heavy users of a GIS or a dedicated application are the ones most often very satisfied (49%), and heavy users of spreadsheets are very satisfied least often (16%). Among those saying that the use of location analytics has improved their results, spreadsheet users ranked last (35%), far behind users of a GIS (55%) and analytic or BI tools (49%). Organizations that use a dedicated tool for location analytics (49%) are the most satisfied significantly more than those that use only spreadsheets (16%).
A look at the capabilities necessary for effective location analytics indicates why tools designed for the purpose get better results. More than three in five organizations said three basic capabilities are important: geographic representation of data, visual metrics associated with locations on a map, and selecting and analyzing locations on a map. One-half to one-third said interacting with maps and locations for further analysis, determining distance and drive time, and adding layers to maps are important. All of these basic capabilities are the building blocks for conducting specific analytics that can identify or recommend actions from the mashup of data about a location or to provide insights to guide decisions based on location-specific indicators.
Another technology approach used most frequently is business intelligence (BI). These tools are designed for reporting, creating dashboards and general access to analytic information such as metrics. BI tools and processes are established in both IT departments and lines of business, and location information can further enhance BI efforts. Nearly half (48%) of participants in this research ranked business intelligence interfaces as the most important to integrate with other enterprise software; custom interfaces was a distant second at only 13 percent. IT participants (55%) put BI first more often than did those in business (44%), and manufacturing (55%) ranked it higher than other industries. BI also is the application most often integrated with location analytics (45%), even more so in the largest companies by number of employees (56%) and by annual revenue (65%). In terms of planning and developing a strategy to use location analytics with other systems, most intend to integrate it with marketing automation (33%), sales force automation (30%) and enterprise content management (also 30%).
However, the research also finds impediments in using BI and location analytics together. Almost half (46%) of participating organizations said that integrating the two requires significant effort; another 16 percent said doing that is very difficult and requires substantial time or that they have no practical way to do it. On a positive note, integration of these two technologies has advanced significantly in the last several years, and it is easier to exchange data and add it to presentations. In addition, organizations that use business intelligence to conduct location analytics reported benefits, particularly improving the customer experience (21%) and gaining competitive advantage (20%). More than three in five companies that use BI with location analytics are very satisfied (17%) or satisfied (44%) with theinformation and analytics they have available. Thus the research clearly shows that integrating location information into business intelligence can deliver value.
Looking at location information in a broader sense we find many organizations using consumer mapping to plot data quickly, predominantly free software such as from Google (which 45% use) and Microsoft (31%). The research also reveals that while almost one-third (31%) have used these for enterprise needs, only 8 percent are very satisfied with them. Like personal productivity tools, these tools can help in individual tasks like driving instructions and plotting locations for quick geographic placement, but they lack task support and operational or specific analytical context that requires secure, integrated access to enterprise systems. Free and easy access makes them attractive, but they do not provide enough capabilities for skilled workers to use in complex business tasks.
As deployments grow, so does the need to integrate and adapt location analytics to other technologies. For example, one in five research participants said mobile technology is critical for improving location analytics, as did smaller numbers for cloud computing (15%), big data (15%) and collaboration (8%). Ways of deploying location analytics also are changing, as more organizations realize that buying and installing the software on-premises (which 35% prefer) is not the only approach; nearly as many (33%) want to access it on demand through software as a service (SaaS). Very large companies by number of employees (44%) and annual revenue (39%) have the strongest bias for on-demand deployment, as does manufacturing (43%) among industry sectors. Exploiting the full potential of big data investments, whether representing machine data or customer locations, is a prime example of where location analytics can help use data effectively. The research strongly suggests that location analytics will have a place in evolving business technology environments and that broader use of innovative technology will extend the value of this investment also.
However an organization deploys location analytics, the research shows that experience in using it is critical to success. Half of participating organizations have deployed location-focused technology, and the percentage is highest among very large companies by number of employees (56%) and annual revenue (67%). Almost two-thirds (62%) of all companies that have the most experience said location analytics has helped improve results significantly; among those who are somewhat experienced just 23 percent said this.
Organizations of course expect to realize important benefits from software investments. The top five benefits being sought from location analytics are to improve the customer experience and customer satisfaction; gain competitive advantage; improve access to and value of existing information; improve organizational alignment and coordination; and deliver products and services faster. Organizations that use a dedicated technology focus most on gaining competitive advantage (21%) and delivering products and services faster (16%). Investment in a dedicated tool for location analytics can increase the value of an organization’s information and analytics, which improves with experience in using the technology. We recommend that organizations develop a location-specific component in their agenda for analytics. If you want to learn more on the value and potential of technology in location analytics our community is available to help with more depth in best practices and insights on this topic.
CEO & Chief Research Officer
March 20, 2014 in Big Data, Business Analytics, Business Collaboration, Business Intelligence (BI), Business Performance Management (BPM), Cloud Computing, Customer Performance Management (CPM), Financial Performance Management (FPM), Information Applications (IA), Information Management (IM), Operational Performance Management (OPM), Sales Performance Management (SPM), Social Media, Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM) | Tags: Big Data, Business Intelligence, Cloud Computing, Database, Database as a Service, IBM, Microsoft Azure, Middleware, Oracle, Oracle Cloud, SaaS, Software as a Service, Verizon | by Mark Smith | Leave a comment
At Oracle’s recent cloud computing analyst summit in sunny Palm Springs, the company’s executive team insisted that it sees clear skies for its efforts in cloud computing. The summit was led by senior executive Thomas Kurian, who runs the entire product organization and reports directly to CEO Larry Ellison. He affirmed that Oracle intends to offer the full range of cloud computing – public, private and hybrid models – to its customers and partners. As one of the world’s largest software suppliers Oracle has much at stake to make its database and all tools and applications available in these cloud environments, including managed cloud services. Our business technology innovation research shows this is a smart bet. Cloud computing is important or very important to 57 percent of organizations, and more than half (55%) of cloud users have been using it for more than a year. I noted in 2013 that simplifying IT and innovating in business are key to its software strategy, and Oracle’s efforts since then have executed on this outline.
Oracle has been developing a public cloud for some time, but in the last couple of years it sharpened its expertise and gained customers through acquisitions while refining its focus and investing in technology. Oracle now offers software as a service through its applications team covering HR, customer service, sales, marketing, ERP, finance, the supply chain and other areas. I recently assessed the Oracle HCM Cloud service, which provides a good example of what the company is doing and one that we awarded for 2013 Ventana Research Technology Innovation Award.
Oracle is determined to provide infrastructure as a service and elastic computing services for storage, identity verification, messaging and networking. Here it is competing directly against Amazon, IBM, Microsoft and others. Oracle also offers its platform as a service for using its database and tools in a variety of ways including the Web and mobile to collaborative methods. This strategy also includes analytics and big data. Our big data analytics research found 27 percent of organizations using cloud-based systems for this purpose, and it is gaining momentum as the preferred method of access: 22 percent prefer software as a service for big data analytics, 7 percent prefer a managed service, and 18 percent have no preference. Oracle is confident it can compete on price with other public cloud players. In addition its newest focus in the public cloud is information as a service, which brings corporate and public data together for business needs. Oracle is also strengthening its cloud computing marketplace so its software will be easy not only to access and purchase but also to onboard and use.
The private cloud computing area is somewhat different. CIOs need options to expand their compute power rapidly according to business needs; such a plan once had to be executed in the company’s data center, but now the cloud offers alternatives. In a more controlled manner than for the public cloud, Oracle provides the full life cycle of management through Oracle Enterprise Manager across its applications, platform, database and infrastructure, which can help most IT organizations simplify and reduce their focus on managing their infrastructure and enable them to focus on the value of the information and technology they provide for the business. Oracle offers multiple methods of deploying a private cloud: virtual machines for server consolidation, clustered databases for platform consolidation, and multitenant occupancy for database consolidation. Its private cloud platforms can provide a range of computing services to support applications and even enterprise deployments for use of mobile technology.
Oracle also offers a managed cloud service in which it builds and manages a private cloud environment similar to IT outsourcing except that Oracle owns the software being hosted. In this arrangement Oracle can provide in the cloud any of its applications, platform and infrastructure and can also connect to customers’ on-premises systems. Oracle says that more than 550 customers around the globe are using this service, processing 1.25 trillion business transactions per day; it stores more than 41 petabytes of data as well. In this offering Oracle competes directly with companies that have been offering this type of service in managed and outsourced approaches, including HP, Accenture and TCS. Oracle has been steadily building a strong position for its own outsourcing and managed approach to cloud computing.
These three cloud approaches have in common the Oracle database, running as a database as a service. Supporting it is the Oracle Fusion Middleware as a service that operates its business applications and is the basis to build custom applications by providing user, process, documents, information and identity services. Middleware is also where Oracle is advancing its support of mobile computing and big data as well as batch-to-real-time integration to applications and data across the enterprise and cloud along with Web services support through the REST and SOAP interfaces. Our research shows that integrating data from cloud applications is important to 80 percent of organizations. Oracle is releasing in the first part of 2014 more technology like Java, document and business intelligence as part of its Oracle Fusion Middleware as a service. Oracle has enlisted its Java technology to support the “as a service” concept to help move on-premises applications to the cloud but also to support application deployments. Oracle has worked to ensure its middleware can operate in the Microsoft Azure and Verizon Cloud services. Also part of middleware is the database as a service that is part of the Oracle cloud and of the compute service for elastic computing; it can be provisioned and used on a subscription or a usage basis; customers also can subscribe to backup as a service. Beneath the middleware and the database is the infrastructure as a service, which provides direct support for computing, storage, messaging, identity and notification services. Oracle supports integration of other cloud computing environments such as salesforce.com with its on-premises applications.
Oracle also is expanding its presence in application-centric cloud deployments. For instance, its Oracle Business Intelligence Cloud service will be available in 2014; here it plans to provide a range of real-time and self-service analytics and integration of data from the cloud and on-premises systems. Oracle already has been supporting its own BI applications in the cloud, but this step will help it compete in a market where many options have been available for several years. Our next-generation BI research found a need for this in 2013, when 25 percent preferred software as a service for enterprise BI and nearly as many (22%) a hosted private cloud. It is even more important for mobile BI: 26 prefer cloud deployment, 30 percent chose hosted by supplier, and 36 percent had no preference; only 9 percent prefer on-premises for mobile BI. For another example, the Oracle Planning and Budgeting Cloud Service is now available, based on its Hyperion Planning software. In BI and planning in the cloud Oracle definitely is not first to market and indeed will have to catch up to build a brand and trust with customers in these areas.
Given its size, Oracle is uniquely positioned with server, database, platform, tools and applications all operating in the cloud in public and private approaches and as a managed service. Only IBM is close to providing such an extensive software and technology stack. The competitive edge of preintegrating the entire stack in the cloud is a great position from which to grow its business. Our business technology innovation research finds that cloud computing has improved the availability of applications and information for business; one-third (34%) of organizations said it has improved availability significantly. In addition the research found that cloud computing has lowered costs, improved the efficiency of business processes, boosted communications and knowledge sharing, and increased productivity for more than one-third of organizations. The skies look clear and not cloudy for Oracle, which will be delivering more cloud computing on a very aggressive schedule throughout 2014 and 2015. If you are transitioning to or evaluating cloud computing in any manner, from infrastructure and platform to tools and business applications, Oracle is a provider you can’t ignore.
CEO & Chief Research Officer