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Predictive analytics has the potential to help businesses increase the impacts of their actions by creating indicators that represent future outcomes based on existing behavior. This process becomes more complicated when they have to apply predictive analytics to what we call big data environments. As yet only 13 percent of organizations are using predictive analytics according to our business analytics benchmark research, although 37 percent indicated that predictive capabilities are very important to their business analytics efforts. Opera Solutions is one of the larger vendors of dedicated predictive analytics software, having more than 650 employees, more than 200 of them data scientists, who help organizations turn their data into actionable intelligence. There is opportunity for the company, as predictive analytics and visualization of data are two capabilities not available in four out of every five organizations according to our big-data benchmark research. Beyond creating indicators, Opera Solutions’ applications can generate signals that present results not only visually but also in English sentences that integrate the analytics and provide guidance for determining next steps. This sophisticated capability can help improve business processes and refine decision-making and truly interact with the application.
Its technology platform Vektor processes large volumes of data and uses advanced analytics to create a Signal Hub in which users can visualize past, present and future performance and also create indicators in English using models that apply computational algorithms and mathematics. The results can generate specific recommendations within the context of the user’s business processes, much like expert systems did in the past. By processing data through rules, logic and analytics, Opera has achieved faster growth than other vendors of predictive analytic tools. More than half (58%) of organizations today want to deploy predictive analytics with business applications for real-time execution, according to our predictive analytics benchmark research. Opera Solutions enables this through a data discovery process that uses workflow, rules and logic across as many analytics models as necessary.
The company’s management realizes that its software must interoperate with others in the market. As a step in this direction, at SAP’s annual user group conference SAPPHIRE NOW, Opera Solutions announced a partnership to utilize the compute power of SAP HANA, the in-memory computing database technology. Opera Solutions processes some of the largest stores of big data, including for customers and transactions, which are critical to more than 60 percent of organizations according to our big-data benchmark research. An important feature is that it retains the lowest level of transaction data to provide any details required to understand a situation and guide action. In-memory databases like SAP HANA will have high growth rates in the next two years in big-data environments. By integrating with it, Opera Solutions is ensuring that it can process and compute increasingly large volumes of data that its existing database and processing technology won’t be able to handle.
The company’s largest challenge is to communicate the power and sophistication of its platform to customers and differentiate its approach from other predictive analytics vendors. SAP markets its own set of predictive analytics tools that operate against HANA, but to use those requires skills and resources from customers, and the lack of these is the largest inhibitor to organizations using predictive analytics. Thus the two companies take starkly different approaches, and Opera needs to emphasize that further.
Opera Solutions can help organizations realize the benefits of a business investment in predictive analytics. Our research shows that first in importance among them for more than two-thirds of organizations is achieving a competitive advantage, and more than half each want to identify new revenue opportunities and increase profitability, as well as increase customer service. Opera Solutions also offers preassembled capabilities for specific industries including for consumer-focused finance and risk management, global financial marketing, healthcare, government, marketing and the supply chain. I had a chance to review its supply chain intelligence and financial wealth management applications; they present what is going on within a business context, not just in charts but in actionable explanations in English, which are much needed in organizations using dashboards that provide no insight on what should be done next. Opera Solutions addresses the need for focused business context but also increased usability – the most important technology and vendor consideration in 70 percent of organizations evaluating purchases. The applications also are configured to provide usability for specific roles, from executives to managers to analysts.
Organizations that have expert resources on staff, such as data scientists, get the most value from and are the most satisfied with their predictive analytics. But today 83 percent do not have sufficient skills or training, and more than half (58%) do not understand the mathematics to properly apply predictive analytics; these are the largest obstacles to using the technology in more than three-quarters of organizations.
Opera Solutions offers help for these organizations through its own experts who create applications that non specialists can use from executives to managers and management. The tools enable business analysts to get down to actual analysis and develop recommendations for action; our business analytics benchmark research finds this to be a critical need, as two-thirds of the time analysts spend in the analytic process goes to data-related tasks.
Opera Solutions takes care of the heavy lifting, from data processing to the hosting of the platform and applications that organizations access. But it must make it clear that this is not outsourcing of analytics but augmenting the customer organization’s capabilities with applications and support from a team of scientists. This combination of tools and service can help organizations focus on analytic outcomes and advance their business goals. I would also like to see advancements in utilizing collaborative capabilities to help create a decision making network in the business that can encapsulate the issues and resolutions for tracking towards an organizations goals and objectives. As Opera acquires more customers it will need to improve automation of the movement and preprocessing of data, which the company currently does manually with its own tools. Its browser-based access, even from a mobile tablet, allows management as well as analysts to review and act on analytics in a more expedient manner. The dynamically created and readable signals Opera provides are a significant technology advance that very few others can approach. Personally this approach is one of my favorite methods because it gets past just delivering charts in a dashboard that have no explanation or guidance.
Since this approach is unique and sophisticated, it will require Opera Solutions to explain how it delivers faster time to intelligence than other suppliers of big data and predictive analytics. It has to communicate that it is not out to sell a predictive analytics tool that requires an organization to acquire the skills to use it but instead wants to work with the organization to present analytics and signals in an easy-to-use application. The challenge is that at this point the market is not educated on the science of analytics and the value in what Opera Solutions is offering. If you want to increase your competence in applying analytics against your big data and gain intelligent signals that explain your current situation and implications for the future, look at how Opera Solutions is changing the face of predictive analytics.
At this week’s SAPPHIRE NOW (Twitter #SAPPHIRENOW) annual conference, SAP unveiled a refreshed cloud computing strategy and released technology that addresses its new cloud computing business priorities regarding customers, people, money and suppliers. It’s a good time to see what has changed since my analysis at the SAP Analyst Influencer Summit last December.
The company’s new leader in cloud computing is Lars Dalgaard, previously CEO of SuccessFactors and now part of the executive board of SAP. I assessed SAP’s acquisition of SuccessFactors when it occurred. As part of the combined organization, SuccessFactors continues to conduct semi-independent in marketing, sales and product development, but now it has more applications and people that were part of SAP’s cloud computing efforts. SAP unveiled its global payroll software, which is now part of its Employee Central suite, and both of these can operate as software as a service in the cloud. The company boasted about its 200-person localization team deployed around the world to bolster international efforts. SAP is making progress on expanding its portfolio, including its human capital management applications. Many companies that use SAP HR applications on-premises should look at SuccessFactors for the future, since its software leaps past the older SAP software in many capabilities, including usability and capability.
Beyond cloud computing, SAP defined the customer as a focus in several ways. In its Sales OnDemand application for sales force automation (SFA) SAP has blended new social collaboration capabilities to help with team or social-based selling. SAP has made progress since unveiling Sales OnDemand last year, when I assessed it, but it still has not addressed other applications priorities needed by sales that we identified in our recent sales applications and technology benchmark research, including over two thirds that need sales forecasting to lead management, plan and tracking, commission and compensation to proposal, quote and contract that are important to over a third to half of sales organizations. It has begun to advance in sales analytics, which is the top technology trend in 77 percent of sales organizations, followed by collaboration and mobility, which SAP has blended into its SFA product. Renting and using applications in the cloud is preferred by 41 percent of sales organizations, and SAP is taking notice by focusing on cloud computing for sales.
In addition, SAP unveiled its Social Customer Engagement OnDemand application to engage with customers on Facebook and Twitter channels. Our customer relationship maturity benchmark research shows that a focus on social media is increasingly critical. Only 31 percent of organizations can personalize responses today, but social media is one of the top planned channels for interactions in 2012.
Otherwise, SAP has not been progressive when it comes to cloud computing for customer service; there is demand for interactions across many channels today, including through mobile devices. SAP has also not yet defined how it works with the major providers of customer service-related agent, feedback and interaction management applications, such as Interactive Intelligence, NICE Systems, Verint and VPI. SAP still needs to improve its support for technology that examines the voice of the customer across all channels, not just social media, and examine other customer feedback and assessment of interactions through speech and text using analytics.
Continuing its product rollout, SAP unveiled SAP Financials OnDemand, which is part of the decoupling of SAP BusinessByDesign, previously a one-size-fits-all cloud-based approach to the major application needs of organizations. This is a step forward, but SAP will need to address the rest of the financial needs of organizations and look at updating the financial management applications that are part of its SAP EPM offering, which include budgeting, planning, analytics and consolidation and reporting.
SAP also previewed an expansion of SAP Travel OnDemand that will support more integration with mobile capabilities to help organizations capture and process expense reports. This finance area of its cloud portfolio needs more work, which is probably why it had little part at SAPPHIRE NOW. The same was true of SAP’s focus on suppliers for cloud computing, where it continues to push its SAP Sourcing OnDemand solution.
On the technology side, SAP discussed work to move its current technologies toward multitenant and multicustomer environments in cloud computing. SAP presented changes to make its application development platform, SAP NetWeaver, cloud-based. Its analytics technology, including SAP HANA, an in-memory computing database for analytics and transactions, is being placed under its cloud platform and applications. This should add momentum to SAP’s workforce analytics offering, which was already available through SuccessFactors and is a key component of its human capital management suite. It will also advance SAP’s compute performance and analytics scalability, but SAP still needs to solidify its business intelligence technologies that operate in the cloud and on mobile devices.
SAP presented a variety of social collaboration scenarios based on SAP Streamwork and the acquired SuccessFactors Jam. The two have both overlapping and complementary capabilities, as you can see for yourself by downloading them from the Apple application store. Our latest research on social collaboration in human capital management found knowledge sharing and collaborating are the top two areas requested to support business goals. Overall, SAP is now fully engaged in social collaboration technology. Efforts in this direction also will be run from the cloud computing group; the company recently hired industry influencer Sameer Patel to help lead this group.
SAP’s largest challenge is integrating its many cloud computing applications and underlying platforms, which operate in different environments, with each other and its large set of on-premises applications. The company seems to lack a defined strategy for integrating its processes, applications and underlying data. At SAPPHIRE NOW it announced partnerships with Dell Boomi, IBM CastIron and Mulesoft, but I could not get any details on what applications they will interconnect in the short term, as opposed to just using the products by themselves. SAP alluded to more capabilities to come in the future which will most likely appear in its SAP Enterprise Information Management (EIM) suite, and the sooner they arrive the better, since half of organizations are need to integrate data from the cloud to on-premises environments according to our data in the cloud benchmark research. I was given the latest 500 page book from SAP Press on Enterprise Information Management with SAP to read in my spare time.
SAP is serious about applying cloud computing applications to its internal business operations. It has had Salesforce.com adopt and deploy SAP’s Sales OnDemand to replace its previous use of Salesforce. The company claimed this took only a short time, but I find some turbulence, as the experience and approach of SAP’s sales force automation application are much different than Salesforce’s. SAP has committed to using SuccessFactors and is busy making that a reality in 2012, though it is no easy task given the number and location of its employees.
SAP has had its start and restarts in cloud computing. Now, on its fortieth anniversary, its new cloud leader brings a new voice to the market to clarify its competitive edge and solutions. SAP has long been a significant player in the business applications and enterprise software market. Its latest moves to energize its cloud computing efforts come at a critical time, as the market is expecting more of its business applications to be available in the cloud. The company must focus and invest more into customer, sales and financials and accelerate its efforts with acquisitions and internal development to expand its offerings.
SAP has a lot of work ahead of itself to maintain strong competitive positions across all the lines of business it has outlined. SAP is large company, so I expect to see rapid progress to respond to its customers’ demands.
Mark Smith – CEO & Chief Research Officer