Round Table

Business Analytics in India – Opportunities and Challenges: Discussion

Ishwar Murthy

B

usiness Analytics or Business Intelligence is increasingly being seen as the key differentiator that provides a competitive edge to companies across industries. While India has long been known to

be the destination for IT services and more recently Business Process Outsourcing, are there significant opportunities in the Business Analytics space as well? If opportunities are present, then where, and in what form do they exist? Are there specific areas where India offers a unique advantage? What are the impediments to the growth of this industry in India? The IIMB Management Review (IMR) Round Table on Business Analytics in India – Opportunities and Challenges brings together a panel of experts to explore and understand this emerging field. The panel discussion includes issues such as the infrastructure and manpower needs for India to be a
Ishwar Murthy is Professor, Quantitative Methods and Information Systems, Indian Institute of Management Bangalore. ishwar@iimb.ernet.in Prof Ishwar Murthy anchored the Round Table Discussion and is the Guest Editor of the Round Table on Business Analytics in India – Opportunities and Challenges. IIMB Management Review, June 2006

major player, user needs in Business Analytics, the technological challenges associated with integrating data from multiple sources in Business Analytics, collaboration between industry and academia, the use of new analytical models and studies of the successful application of Business Analytics especially in banking and in supply chain management, and what India must do to leverage its special strengths and deliver in this space.

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and ED.ramakrishnan@iflexsolutions.Srinivasan@sabre. So you have to draw a fine line as to where you can decide you have sufficient senior domain knowledge to leverage in the pool of resources that India has. Faculty members of IIMB participated in the discussion. What matters is confidence. there are many domains where intellectual property is a grey area. data mining – are being used and taught. Once workers have enough knowledge they will head for Western markets The panellists in the Round Table discussion on Business Analytics in India – Opportunities and Challenges were: Dr Paul Alapat.com Mr Anand Srinivasan. The frontiers are constantly changing and so you have to continuously update your domain expertise.ernet. it is a different matter to design them and put them together in a way that the final user can benefit from them.ac. The opportunity we saw was essentially in moving higher up in business process outsourcing. Dr Ajay Mookerjee. how do you measure the quality of a professor? Then. into analytics and design. Professor. CEO. In this field the opportunity actually lies in the balance between the migration of a worker and the outsourcing of work. practices and processes. optimisation. 176 Business Analytics in India – Opportunities and Challenges: Discussion . was co-chair. Manager – Operations Research. What we are doing is essentially straddling India and the global financial centres and being connected with the global changes that are taking place. For instance.com The discussion was anchored by Prof Ishwar Murthy.waghmare@us. HSBC. Offshore Analytics. This is probably a bottleneck that has prevented the full utilisation of the resources that this country possesses.edu Prof V Nagadevara. Ltd. Amba Research works in the sub segment of investment resource outsourcing. it is a lot like creativity. Our educational standards are extremely varied. Anand. even to company information. confidentiality is a constraint. Culturally. The process is not easy to manage. HSBC Electronic Data Processing India Pvt. Purple Tangerine.in Mr Rajendar Rajanhally. We focus on capital markets. Prof B Mahadevan.com Prof G Srinivasan. pratap@thumboochetty. people have to be taught that one cannot be free with names of clients. Quality control is another challenge as you go into higher value. We have very bright people who have never been outside the country. Is it the client’s property or is it yours? How much of it is legitimate for you to transfer to other projects. Chief Editor. As a rule Indians find it difficult to say ‘No’. President. Department of Management. IIT Madras. and work there at four times the salary. Co-founder and CEO. Once you get deeper into technically proficient areas. a consulting company. At those levels English becomes relatively less important. HBS India Research. Indian Institute of Management Bangalore. who was Vice-President. which might mean getting your client to share the required knowledge. i-flex solutions. Investment in infrastructure is important but it does not affect us much given that the mode of delivery is largely independent of physical infrastructure. GENPACT Analytics when this round table discussion was conducted. While the tools of business analytics – regression. The culture of confidentiality has to be inculcated. We have moved a step forward from processes. Professor. Our MBA courses do not sufficiently emphasise English presentation and communication skills – written and oral. Mr Mahesh Ramakrishnan. especially in financial services. mahesh. nagadev@iimb. Further.. tushar. quality and an assurance that you know the domain – that you are insiders.m. Our company.Paul Alapat Business Analytics in India: Advantages and Challenges The comparative advantage that India possesses in enumerative skills and relative English fluency is obvious. statistical methods. paulj@ambaresearch. Eastern Europe also has a much more competitive time zone advantage vis-à-vis an Indian location. a subset of knowledge process outsourcing. Vice President. gsrini@iitm. you have competition from Eastern Europe and Russia. Earlier he was Senior Business Analyst at Capital One in the US and Country Manager (India). We lack a global outlook. as I said. as you go into higher value. cost is no longer the basis for doing business.hsbc. When a client effectively transfers knowledge. IMR. Vice President.com Mr Ajay Kela. Quantitative Methods and Information Systems. The Indian advantage. Managing Director. India Symphony Services. But the one skill set that is lacking is domain experience. lies basically in the pool of professionals who have strong enumerative and accounting skills at competitive prices. Amba Research. amookerjee@hbs.in Mr Pratap Thumboochetty. ranging from the few centres of excellence to the majority in which there is no guaranteed standard. There are many challenges in the industry in the middle to higher value financial analytics space.com Dr Tushar M Waghmare. whose reading is not wide and who are fairly insular in orientation and outlook. Sabre Travel Technologies. As you go into higher value circles the standard of written English that is demanded is much higher and Indian English standards have to improve vastly. it is also an act of subsidising and you become dependent on that relationship/knowledge. IIMB.

the soft skills. The most serious challenge comes from the ‘flat maximum principle’. balance sheet data and time sheet data. If an employee walks away with data there is IIMB Management Review. That is the final barrier to our expansion in outsourcing in this area of analytics. rating institutions. there is an accepted theory. and finally. you find a plethora of institutions including domestic and foreign national banks. there is generally a well accepted theory. We start with 500 variables and then try to find the ones that best predict whether a person is going to pay or not. Given the diametrically opposite views. that is. In academics. innovations and perseverance. Vol 5. and stock prices data. pp. In India penalties are unenforceable. A D. availability of data such as good credit bureau data or cross border data — for example. Secondly. we have yet to find a technique that is sufficiently better than logistic regression. third party providers of analytic solutions and other retail service providers. The analytic data that features in financial services in India is profit and loss data. The methods that we use are mostly parametric and non parametric. We must protect intellectual property with adequate regulation. First. and empirical work is essentially trying to validate the theory or its variants. We start with something like 500 or 600 variables and then try to find which are the variables that best predict whether a person is going to pay or not! There is no a priori knowledge or theory on which variables will turn out to be significant. We are mostly concerned with multivariate data analysis – logit/probit. There is a huge need for focused workshops where people can learn about new tools and techniques and also pick up industry domain knowledge. emotional quotient. such as bandwidth which come into play if data resides in the US or one has to get it out India. clusters etc. outsourced operations of foreign retail financial companies and foreign investment financial companies. segmentation. Losing data in India poses a larger headline risk for the company than losing data in the US. We use panel data methods such as the fixed effects model and Seemingly Unrelated Regression system (SUR). transaction prices data. Data mining is taboo in academics. knowing how to lead a team and how to get maximum productivity out of people. June 2006 In academics. This is time series data. But that is exactly what we do in the credit card business today. multilateral financial institutions. and P Lovie. Journal of Forecasting. On the methods side the greatest challenge is the very slow adoption of different technical methods into the business. On the data side the challenges are many. Thus any modelling normally involves a priori knowledge of variables of interest.e. The aim is not to validate any theory but to find the best predictors given the business constraints. brokerage houses/investment companies. Any modelling involves a priori knowledge of variables of interest. 1986. But that is exactly what I do in the credit card business today.how much of it has to be returned to the client? A lot of the intellectual property resides with the factor of production. and ‘wisdom’. Particularly in the context of credit scoring models. very little that can be done to recover the data or provide stiff deterrence to minimise further occurrences. there is little updation of knowledge in the field and a severe crunch of knowledge seminars in India. ‘The Flat Maximum Effect and Linear Scoring Models for Prediction’. The other kind of data that is commonly used is retail data on consumer behaviour i. 177 . 159–168) found that the best predictive models are often redundant. I would look for people who scored high on these parameters. cross section data. market research companies. Data mining is taboo in academics. Lovie and Lovie (Lovie. Thirdly. data theft is a serious issue. We do not make much use of the time series method. We have started using a lot of optimisation in our work. and retail data on consumer behaviour across time. the huge reputation risk. Tushar Waghmare Analytics in Financial Services in India When you look at the analytics space in financial services in India. There are several challenges in the field of analytics in financial services in India. and empirical work tries to validate the theory or its variants. technical issues. What is the knowledge that is required in this field? One has to have good business and domain knowledge to leverage the tools and techniques most efficiently – Where do I get my income from? Where are my losses accumulating. perception mapping. some EU nations do not allow data to be transported across borders – is a major challenge.

uk).man. I have 178 Business Analytics in India – Opportunities and Challenges: Discussion . which involves people from the industry in the US and Europe and some faculty members of the Harvard School. General managers are interested in business experimentation.ed. Tesco and Wal-Mart are examples of companies that have managed Ajay Mookerjee Applying Business Analytics to Create Business Value My presentation is an abstraction of 20 years in the profession of applying business analytics to create business value. in the feedback loop. while Pratap Thamboochetty who was in the founding team of Small Business Card sub segment of Capital One. I would see the new challenge as follows: if. service features increasingly drive revenue realisation. testing it and learning from those tests. Alapat has touched upon.e. without understanding customer data and more importantly. There are few business-academic joint papers/seminars as in the US or other channels of industry-academic interaction. In India. and there business analytics and more importantly experimentation is key to creating break-out competitive advantage. i. To conclude. one of the programmes that I am involved in is The Business Experimentation (TBE) project. Test and learn and analytics driven business experimentation is key in consumer financial services and is evolving in consumer packaged goods/retailing. in-market testing. That is the new concept of value realisation. service features increasingly drive revenue realisation. such as conflict resolution and expectations management. Dr. we have no specialised institutions such as the Credit Research Centre. I would like to see more orientation towards business problems in academics. As products commoditise. you proceed to predictive modelling (Exhibit 1). and success requires continuously designing and testing custom-tailored products with wraparound features. Value Creation in the ‘Experience’ Economy Value creation in businesses is shifting to usage experience – the economy has evolved from the agrarian and manufacturing stages to the ‘experience’ economy. been part of the founding team of Capital One which has used the power of analytics to great business success. Business analytics is the driver behind business experimentation. My opening proposition is that business analytics is not a general management concept. The core product is not disappearing but is being wrapped around by a bunch of service features. It is a tool. As products commoditise. There are certain aspects of managing a knowledge worker that we are poor in. Some aspects of what I classify as ‘wisdom’. Capital One. more advanced training programmes and not simple regression analysis. which is a part of the University of Edinburgh and which specifically caters to researching the consumer credit market (http://www. Employees need to realise that there is no substitute to working in the trenches. with the usage experience defining what value the customer was willing to place on the product and after sales service. I will focus my remarks on business abstractions. no more than 20% of the business value is added from these three steps.crc. you would have to extract value through after sales service. Barclaycard. Business knowledge is severely lacking in India. will delve into the Capital One experience with data mining and analytic tools in the context of risk management and business experimentation. The core product is not disappearing but is being wrapped around by a bunch of service features. as general manager you were to give away your product free. I look forward to working with academic institutions and leveraging the talent and business knowledge in my team to advance the frontiers in techniques. You cannot do that without the power of analytics.ac. So effectively if you look at the past performance data and do statistical analysis and reporting. However. Being associated with the India Research Programme of the Harvard Business School. We lack skills of presentation and even telephone etiquette. more shortterm programmes and more joint work. Knowledge of the regulatory frameworks is also severely lacking.Value creation in businesses is shifting to usage experience. Eighty percent of the value is added in that last step. The expectations of people who come out of educational institutions are unrealistically high. and success requires continuously designing and testing custom-tailored products with wraparound features.

and straightforward statistical techniques were applied to it to do a collections analysis. However. The idea here is to impress the efficacy of intense slicing and dicing and data mining. Based on the recoveries analysis. where the possibility of recovery was low. The pyramid will have one business segment leader — a global business leader with a track record in building analytically driven businesses. collections. As far as the Indian scenario and our level of data sophistication are concerned. This cycle must be repeated on an ongoing basis with continuous improvement and innovation. Most of what we do is not highly evolved in terms of rigour. control structures and architectures in organisations where you have very young people with high degrees of empowerment. The old way of management is heuristic. Pratap Thumboochetty Business Analytics in the Credit Card Industry I would like to give you two examples from Capital One’s use of data mining and business analytics. The data handling and modelling capabilities and the notion of experimentation in data rich economies is two orders of magnitude more.Exhibit 1 Value Creation in the ‘Experience’ Economy Statistical Analysis & Reporting (Spot Trends) Predictive Modelling (Hypothesise business concepts) In-market ‘Testing’ Programme (Rollout business concepts) Continuous Improvement (‘Learning’) Past Performance Data Management turnarounds through analytics driven business experimentation. you also have to change your business philosophy with experimentation replacing experience. It is only within the offshored environment – the third party offshorers as well as the captives — that there exists the level of sophistication that I have talked about. You have to think of completely different management philosophies. we segmented the customer base into illiquid and liquid debt. These techniques enabled us to minutely ‘slice and dice’ the delinquent customer base and apply differential collections treatments to optimise collections efforts. product features have exploded in three orders of magnitude and it is impossible for anybody to claim to be an expert. If conventional business management required tens of statisticians and gigabytes of data. test and learn management would require hundreds of statisticians and terabytes of data. risk and marketing analytics and investment analysis and research. applied to the collections side of the credit card industry. The model has been iterated in many versions since. this is what Capital One did about seven years ago and the shelf life of this model is around 90 days. With the shelf life of a product being around three months. modellers/statisticians and data analysts forming the descending levels of the widening base. Now the world has become very complex. IIMB Management Review. it requires a sea change in data mining intensity. instead of having a top-heavy management team. The pyramid will broaden out with business analysts — experts in test and learn. recoveries and consumer bureau databases. Waghmare is indicative of the fact that there is not much ammunition to fuel business analytics. June 2006 The organisation paradigm here is completely different. loaded in favour of judgement and experience. that test and learn is still at a rudimentary stage. geodemographic. applied to the credit card industry. Organisations must identify and test each winning strategy in a micro segment and monitor results to revise strategy. was recommended for debt sale while we optimised agency placement for the liquid debt between high and low commission agencies. However for such methods of value creation to be successful. work online on a realtime basis and the analyses would be predictive. The other example is from the marketing side of Capital One 179 . The first is an experiment in high-intensity data mining and predictive modelling from Capital One’s Small Business line. Customer usage experience has to speak for itself. In addition to an order of magnitude increase in data management intensity. The illiquid debt. However. the lack of credit bureaus pointed out by Dr. Data was taken from different sources — from transactional. worked offline and practised static trend spotting. this experience is not worth much. it is not impossible to achieve those levels.

and making up for it by more knowledge-based methods like teaching or experimentation. at a time when the business was fairly homogenous and commoditised. Having said that. those kinds of problems. further testing found the elusive low-risk revolver in an isolated test cell. it is also true that the application of IT domestically may be lagging behind because of the lack of demanding customers. However. Waghmar aghmare Tushar Waghmare: Given the fast changing pace of the world we need to leap forward in certain things. Ramakrishnan: amakrishnan Mahesh Ramakrishnan Being in the financial industry. This is where such a course would help. who have never worked in an industry and then you give them a jack-of-alltrades education. This is where a course on Business Analytics would help. They will be much better managers. Of course. that is. Alapat: Paul Alapat We should be very careful about taking short cuts. Here we have 25-year-olds. It would be easier with a vertical domain. There are several more such examples but this is probably the most dramatic example of how we actually challenged the industry norms. You need people to work on particular domains. intelligent and very ambitious and should be given the opportunity to update their domain knowledge. Institutes must specialise. Our MBA course packs in too much. added value through innovative thinking and a belief in information based strategy. However. the course has to be structured properly so that you teach the right skills. It would make available a lot of domain knowledge from different parts of the world. Is there a possibility or a need for a new discipline called business analytics? Waghmar aghmare Tushar Waghmare: There is certainly a need for it primarily because the applications have to be focused on solving business problems. I think it is suicidal. An initial testing of the data from the point of view of utilisation vs risk suggested a linear relationship between utilisation and delinquency. we can help shorten the trench period by jump-starting and building on the spiral of accumulated knowledge. If you measure the IT spend in India versus Capex. you need more consulting projects and it takes time to achieve concrete results. fresh out of college. However. and used data to make informed decisions. I am sure there would be a number of such problems that can be collected from different areas and you can structure your entire programme towards solving 180 Business Analytics in India – Opportunities and Challenges: Discussion . one of the key things I look for when I recruit people. one acquires domain knowledge by working in an industry for some time. do basic math well. Capital One focused on that segment and built a very profitable business. But Discussion Ishwar Murthy: Three of the speakers have talked about Murthy the apparent lack of domain knowledge in the output we get from India. and making up for it by more knowledge-based methods like teaching or even experimentation. We have to make sure that we enrich that process. It would make available domain knowledge from different parts of the world. towards doing more experimentation as Dr Mookerjee suggested. approaching it from a course perspective has several positives. Ajay Mookerjee: I heartily second that. One is the underlying commonality of business analytics across all verticals. Moreover. Anand Srinivasan: When you speak of increasing domain Srinivasan knowledge. A lot of organisations today are waking up to the fact that you can actually change the way you do business and data mining and business analytics is one tool that helps to turn the business on its head. where data mining and business analytics helped us find value in places where most people would not even look. one must make a beginning and it would be a very good idea if the IIMs were to take leadership here. you have to be more specific. We have to acquire sound basic skills. a group of people who utilise credit a lot but are low risk. learn to speak and write English clearly. While there is no substitute to working in the trenches. with not much innovation. we rank at number 30 in the world. in the credit card industry.Given the fast changing pace of the world we need to leap forward in certain things. half the CMM Level 5 companies are in India but our domestic penetration and application of IT is abysmal. I say just say teach them good statistics and good English. is a finance background. I cannot take a person from supply chain management or retail and get him to do business analytics for a financial enterprise. If we look at IT Mookerjee offshoring. Our people here are smart. That may even include cutting short the experience. An average MBA student in the USA has worked for 4 to 5 years and is 30 or 33 years before s/he starts. The data is from 1991. That may even include cutting short the experience.

That would be a tremendous win-win not only for people in various organisations. In this business. When you have a very good business process management system for modelling you can come out with a tool which builds the model efficiently and quickly. coordinating with industry has been an issue. Research must have an industry focus.e. Productive partnerships between institutes and industry that would result in reduced cycle time from research to application. While companies do feel the lacunae on the technical training side. MBAs in finance and operations research. Companies should also be in a position to take up a problem and come out with a solution for it instead of asking the business to define the problem clearly. There is no substitute for the experience that practitioners can bring in. One of the biggest challenges in the field of analytics is translating a business problem into an academic problem. While people have sound backgrounds — masters in statistics. we have people who can crunch data very well and are sound on methodology but they do not have domain expertise. Once I come up with a solution I must know how to implement it. Companies must also reduce the number of people working on reporting and digitisation by automatising these processes so that they can free up more people to work on high-end analytics which adds a lot of value to the business. Instead of working on analytics on an Full Time Equivalent (FTE) basis i. They stick to tools that they are familiar with and hence do not know what is available outside. Once I come up with a solution I must know how to implement it. June 2006 Ajay Kela Business Analytics in India – An Overview Symphony Services is a three year old company with two major businesses – building products for software companies and market analytics. The right training would create managers with the ability to leverage technology. Retention is the major problem in the industry and poaching across companies is common. calculating the number of people working on different kinds of projects. to translate it into a business solution. where we have focused on two verticals – consumer packaged goods (CPG) and telecom. Hiring the right skill sets and getting the right fit for the job is a major challenge. We must look at such a course not from a freshers’ perspective but as one for people with prior experience. to translate it into a business solution. Nagadevara: V Nagadevara Such a course has to be run with a combination of academics and practitioners. Innovation is something which we all need to focus on. It would throw up a new set of people with a new set of skills that are going to be really unmatched considering the significant success that we have achieved so far. It will reduce the students’ leaning time lag and help them reach the level required by the industry. Rajendar Rajanhally High Value Analytics – The Challenges One of the biggest challenges in the field of analytics is translating a business problem into an academic problem. We are a services company doing product development and analytics 181 . Companies IIMB Management Review. by and large. data mining and domain expertise. we need to see what the required skill sets are to solve problems in the business. However. Right now. it would be time to supplement his knowledge skills with some core tools and get him up to the next level where he can start thinking from the analytical perspective and relating his knowledge to a real world scenario. Retention is another problem in the industry. concentrating on industry problems. and which would lead eventually to the automation of the process.once somebody has been working in a particular vertical domain for a number of years. we can take it on as a challenge and see how it works. Hiring the right skill sets and getting the right fit for the job is a major challenge. we can change the paradigm and say that can we become solution providers irrespective of how many people work on the job. The other approach that is gaining ground in the Knowledge Process Outsourcing (KPO) industry is outsourcing of analytics to countries such as India. A lot of people would be very productive if they were given the right training at the right time. One question that is constantly debated is whether to invest in the current technology instead of building new technology. they are not able to find people who can train them specifically on the things that they do regularly. are not investing in such processes or looking to industry for such collaboration at present. but for a country as well.

To present a flavour of the global business analytics market. CPG manufacturing and non CPG and looked at the variety of offerings from market analytics. In the really mature areas there are several companies operating. We have analysed how mature these offerings are within the verticals. analysis of data Improve the effectiveness and efficiency of decision making Predictive Analytics Business Analytics Value ○ ○ ○ ○ ○ ○ ○ ○ Data Integration & Management Data Modelling and Analysis Reporting and Dashboards ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ l l for clients primarily in the US. We are beginning to see a strong correlation between products and analytics. Other competencies include – knowledge of industry verticals.7 billion market. India is fast emerging as a key player in the KPO space due to its large base of highly qualified professionals. telecom. According to a Deloitte Consulting study. fuzzy logic and optimisation techniques. and the value-based assignments that are not really concerned about how many people are behind the scene. business intelligence – balanced scorecard. data warehousing. dashboard development and other reporting tools. Rajendar just talked about. management. and some standard industry platforms. We now have teams that are building analytic modules and products within the software products of companies.5 billion in 2005 and the telecom analytics consulting market was expected to reach US$ 175 million in 2006. domain knowledge is the most critical and takes the longest time to acquire. starting from data management and reporting and going down to things like fraud detection and so on. report design. data modelling and analysis to the upper end of the spectrum to predictive analytics. with India expected to Business Analytics in India – Opportunities and Challenges: Discussion . and Indian service providers have the advantage here and can acquire industry standard practices and tools to provide end-to-end services. Exhibit 3 depicts our analysis of the potential business analytics market. analytic service practices. The global CRM analytics market was expected to surpass $ 1. the KPO industry is projected to grow to approximately $17-18 billion by 2010. the core analytics market by March 2008 is seen as a US$ 8. computational intelligence — neural networks.2 billion in 2003 to $15. We have analysed a few market verticals – finance. In the developing and emerging application areas we can develop our own IP and provide value-based services.5 billion by 2010 with a CAGR of 43%. The offshore models that are prevalent today are — the FTE model that Mr. 182 ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ Business Analytics Opportunity Space Purpose-built offshore analytics centres Applying vertical knowledge and providing actionable business insights Among the competencies that are required to be successful.Exhibit 2 Business Analytics – The Value Chain Business Analytics: l l Gathering. With a potential 70% share of the offshoring market. There is a large potential market there and we have started to focus on those areas. The market for business intelligence and data warehousing alone in 2006 according to Gartner would be $ 29 billion. According to NASSCOM estimates. The value chain on analytics (Exhibit 2) starts with data integration and management and moves with increasing value through reporting and dashboards. the total market size for the KPO business in India may rise from $1. analytic modelling techniques including statistical.

trainable on industry best practices and our 30+ years of national experience in successfully providing offshore ITES services to global clients. Churn. Channels.account for approximately $12-14 billion. Revenue Optimisation Market & Consumer Understanding Advertising Recall. Risk Assessment Customer Acquisition. Our opportunities lie in end-to-end customer and market analytics – a one-stop-shop for data and reporting as well as high value predictive analysis. Loyalty. Connected with the lack of domain knowledge is the lack of a good domestic market. Lifetime Value Profitability. high end KPO – market intelligence content creation. Mr. Domain expertise is crucial and both on the product side as well as on the analytics side it has been a primary driver. Price. Cross Sell / Upsell Attrition. There is very little industry-academic interaction to foster entrepreneurship and the Symphony Academy that we are in the process of setting up spells our resolve to engage with the academic and the local community. Their core market offerings are thus dependent on our advanced competencies. as mentioned by the previous speakers. The defining parameters in service providers today. The other big differentiator is that we are doing end-to-end work on the complete product and process lifecycles. June 2006 183 . We are looking at setting up a Symphony Academy where we train people on products as well as on analytics. consulting services basis. which have a direct impact on revenues include all-round value creation. close collaboration and dedicated teams that are an extension of the client team. the large educated English speaking population. Enough has been said about our lack of domain knowledge. The model envisages proactive. Promotions Assortment. A very strong domestic market would ensure domain knowledge. technology and maths/statistics educational institutions. The global market is too immature for persistent. which still operates on an adhoc. Space & Floor Planning. Rajendar just spoke about companies not spending enough time on automating some of the models – to tackle that we have technology oriented people spending time on building tools so that we can automate some of the basic modelling. Target Mkg. and we are looking forward to collaborating with other institutes here. enrichment Exhibit 3 Business Analytics – Potential Market Industry Verticals Finance Telecom CPG Mfg/ Retail Non-CPG Mfg/ Retail Market Analytics Application Areas Offerings End-to-end Data-Content-Reporting management Customer Segmentation. Our weaknesses arise from the engagement model. our strengths. lie in our strong knowledge infrastructure in the form of worldclass management. Market and Store Testing Mix Drivers – Product. high value business analytics services to top-line customers across industry verticals. persistent. In conducting a SWOT analysis on business analytics in India. Pricing. The operating model now takes into account persistent and long term contracts since our clients are investing in our people and transitioning a lot of their domain knowledge. Today the value that our company is able to provide its clients is through software. long-term engagement. Response Mgmt Fraud Detection. Profiling Advertising. Focus is an important issue and ours has been on the customer and market analytics in the chosen verticals. Trade-Funds Mgmt Legend : Mature Application Area Emerging Application Area n ain o s to nd tr e ner a /practic Part ls uire/ ard too services Acq tand nd -to-e ry s dust ide end in v pro and wn IP d lop o e-base Deve e valu id prov s e r v i c e s Developing Application Area IIMB Management Review.

Our mission statement describes Sabre Holdings as a world leader in travel commerce. and analytics R&D for enhanced intelligence of enterprise product for independent software vendors in all verticals. The mindset is all BPO centred and the low IP/value consciousness among traditional BPO service providers may prove a barrier to moving up the value-chain. in the mid90s we thought of enriching the DSS forecasting models by collecting rich transaction data through the retail channels. we replaced time series forecast models. and better ROI justification. We have a single product that is the source of our revenue – a seat on a plane – and the idea is to maximise revenue from it. such as advance purchase. Both our providers and consumers as far as data analytics is concerned are in-house. We had to abandon the attempt. In our second innings we invested in building the next generation decision support models. in the mid 90s we thought of enriching the DSS forecasting models by collecting rich transaction data through the retail channels. We look at business analytics as a technique that makes it easier to visualise and analyse business data to support decision making. with causal models. Our threats come from other knowledge economies – very strongly. with the two ‘distinct’ business functions Data Analytics and Decision Support sharing a symbiotic relationship. Travelocity and Sabre Travel Network are retail channels for travel distribution. for example. We came up with consumer choice models and demonstrated the ROI Anand Srinivasan Business Analytics and Decision Support In delineating the Sabre approach to business analytics. However. online discount only. Travel Network and Travelocity are the providers of the data 184 Business Analytics in India – Opportunities and Challenges: Discussion . price wars among offshore service providers. and providing distribution and technology solutions for the travel industry. Revenue management is all about increasing revenue and decreasing the consumer surplus. and we could generate cross sections which told us that on the Boston to Orlando flight. which are based on history. especially ‘mom and pop’ shops trying to do data management analytics are deflating the value proposition. We provided sophisticated ‘reports’ based on this data but we had limited success. etc and set different price points for each. On a price-demand curve. relying heavily upon data collected from retail channels. Revenue management operates on a simple concept. we had very sophisticated data on shopping requests for different cities by carrier.Since the performance of the decision support system (DSS) was heavily dependent on the quality of the forecasts. we gave serious thought to evolving decision support models that would drive upon the kind of data that we had. Sabre has three basic divisions. and management for certain verticals. Sabre Airline Solutions provides sophisticated decision support modules for airline planning and operations. the DSS that we were selling could not leverage such information to the client’s advantage and the quality of the data and the sophistication of the reports had little impact. that feeds into our data analytics. How does one convert consumer surplus into real cash? The revenue management solution is to ‘differentiate’ the product by applying ‘restrictions’. retailing travel products. Once the different products are identified. We would have to come up with ‘better’ DSS models to keep pace with the data. We provided sophisticated ‘reports’ based on this data but we had limited success and penetration because the high cost of data could not justify the return on investment for the end customers. These are all essentially differentiators of the same product so that you can sell each of those versions at different price points. I will use a case-study approach. Since the performance of the decision support system (DSS) was heavily dependent on the quality of the forecasts. With market dynamics evolving rapidly. In the year 2000. Further. the airline that was the market leader dominated on a particular day of the week and not on other days. For instance. which we could do easily because we had the retail channels in-house. providing data that can be (and is) used for airline decision support. China. revenue optimisation sets ‘optimal’ allocations for the different products based on forecast demand for each product. and the decisions about our models that come from Airline Solutions are the end consumer of data analytics. revenue and consumer surplus for a given price point can be established.

Our experience in tackling production planning in the auto ancillary industry has taught us that we cannot use the same tool for different companies. Realising that it is not enough to work on one project with the industry. For instance. Data analytical skills are readily available in the country. While this would not prepare the student to immediately address all issues that are relevant to the IT industry. The lessons for us from this experience were. If the student were to end up joining the organisation it would be the best thing to happen both ways. The MBA programme provides several relevant skill sets including courses in data mining and warehousing. it would quicken the process. briefly. Data analytical skills are readily available in the country. In our interactions with industry. electives where the students get exposed to the various issues of business consulting as well as a domain area. To ensure participation we are tying up with a software organisation in Chennai. we have worked out a longer time frame of student involvement with the industry. which is very complex and must be built in a focused manner. Sabre transplanted significant DSS expertise to India before establishing the Business Analytics functions and new personnel received significant training to build up the necessary expertise. There are two kinds of global sourcing models typically in vogue today. Institutes like the IITs and the IIMs have a key role to play in the incubation and development of DSS expertise. which is very complex and must be built in a focused manner. We were able to leapfrog stages successfully. It would help in bridging the gap that we are all concerned about. are an intelligent mix of exact algorithms and rule bound procedures. we have discovered. For 185 G Srinivasan Business Analytics in the Context of Supply Chain My presentation will concentrate on the work that my students and I have done in the field of supply chain optimisation. we have faced many issues. in a staff augmentation or FTE mode. with people from the industry being involved. It is something that we accept. and problems sought by research and PhD scholars for their doctoral theses. earlier. The other approach is to establish local presence and transfer DSS expertise. The preliminary indications in this stream are extremely positive. All practical applications (solutions). and a deeper involvement with the different operational issues faced by companies. what was not apparent was the ‘best’ in the market in terms of lowest price. People prefer quick and rule bound solutions to slow and exact solutions. There are opportunities where one can solve the problem and get an exact solution but there are also situations where the persons in industry ask for a rule bound algorithm because it suits them better. sponsored research projects. reduce the gap and make the student more prepared. Institutes like the IITs and the IIMs have a key role to play in the incubation and development of DSS expertise. but the DSS expertise is woefully inadequate and high-end business analytics will not grow without it. As with the construction and manufacturing industries. The enhanced solution provided the same information coupled with the probability of each itinerary being selected. One way is to work with local vendors on a project basis or even on a long term basis. June 2006 . The opportunities or resources that an educational institution such as ours has in handling applications comes through faculty and student projects. that data analytics without matching decision support systems cannot add value. Thereafter. closest departure and least flight time. our culture of user-oriented programmes extends to the IT industry as well and we also have programmes tailormade for them. In this context I would like to respond to the question that was raised about requiring a separate subject such as business analytics. but the DSS expertise is woefully inadequate and high-end business analytics will not grow without it. Standardisation and duplication are possible but are difficult. The addition of a single dimension may change the methodology.from the new decision support model and the data that goes with it. while flight information provided insights into the current market conditions and the frequency of occurrence by carrier. Our MBA programme has a specialisation called business consulting comprising a set of IIMB Management Review. consulting and assignments. and tools and techniques as well.

It is our job to facilitate the way data gets presented to the end user and also close the loop and bring the data back into its original content. is a need that we understand and have built into our products. ‘I can’t trust the data’. In large organisations data is an asset and people protect it. get the data they require and get on with the job. we must be mindful that it is not only the forward movement of the business problem to an academic problem that is important but the reverse is equally so. Our experience has been in dealing with business intelligence and warehousing from a user’s perspective. choice and availability of data decide and influence the solutions. And the user’s reaction usually varies between. We 186 Business Analytics in India – Opportunities and Challenges: Discussion .The classic approach is that to get the data into the warehouse. even for the CEO. and ‘I need to “jump start” my analytics’. clean it. Most DSS systems seem to be standalone systems and become expensive when they have to be integrated with ERP systems. s/he will not trust it. emerging from a system and unlike the data that comes out of the experience of the persons involved. So different people have different ways of looking at data and find it difficult to close the loop. We have to deal with all these issues. clean it. a Gartner study shows that of the big market for business analytics. Further. It is time to turn things around and several financial institutions and business organisations are beginning to actively consult with academic institutions. example. for somebody else. When an academic solution comes out how well are we able to take it back to where it started? also have another product called Reveleus which is the leader in the business analytics space. are impatient to break across silos. Further. Customers are still hesitant to share complete data with us. Many organisations have evolved gradually from being just data processing units to knowledge-based organisations. there is some reluctance to invest in software that can handle a variety of situations. which has made a big difference to our product offerings. especially when applications do not directly impact the end customer or the consumer. Often. churn out various analytics and do some modelling. Academic involvement can give a huge push to the industry and that in turn can spin schedules within India. there is a huge difference in the algorithms that you use if you want to find the first shortest path and the second shortest path and there is a bigger difference if you want to find the shortest path with a constraint. Data warehousing is the basic foundation of business analytics. Further. Our groundwork for product strategy envisages several steps. especially in these times where people are constantly changing jobs. Mahesh Ramakrishnan Business Analytics – A Product Perspective I-flex has fundamentally been known as a product company. This has been the result of a long journey and I am going to share with you a few of the perspectives that went in. The classical approach is that you get the data into the warehouse. some people may want to play around with the data while others don’t want to look at any numbers. in effect you are throwing the data around in various shapes and forms. people like to receive data the way they are used to it – some people want to see just one number. churn it and do some modelling. most of the data that comes out is static data. ‘It doesn’t work the way I think’. However. If our data goes against the users’ notion or perception of it. The need to ‘jump start’ analytics. The question of software creation versus software procurement often comes up. Very often it is difficult to get the full picture from the reports made by the different departments. In the realm of public systems or manufacturing. ‘I cannot close the loop’. which has made a big difference to our product offerings to our customers. the Asia-Pacific share is very small and of that India’s share is negligible. As a country we are not using business analytics but we are serving business analytics leads and advice to the rest of the world. when people know that it is going to be a while before the product reaches the end customer. Our experience has been in dealing with business intelligence and warehousing from a user’s perspective. The business intelligence (BI) user is the end user of data. in effect you are throwing the data around in various forms for somebody else. ‘I don’t get the full picture’. We have the number one product as far as the transactional processing system for financial institutions is concerned. The problem of integrating new software into existing systems comes up when you consider software creation.

We are fairly successful as far as analytical applications go and our product is spread across more than 50 banks worldwide. The management model that we followed was the classical model for new product planning and for managing a product life cycle. expensive formulas and is meant for an ailment which is a life long condition. depending on the geographical needs and specifications of the customer. We now want to leverage on what we have accomplished so far. It needed to classify members into different categories and predict potential spending. Apart from this product we also run the services side of business analytics and part of the product also goes in as a complimentary offer. including the market and the industry. identify the characteristics that differentiate the categories and understand them. We put in one standard. The technology was also capable of integrating transparently with any of the earlier investments. Everybody thought it was a great idea which somebody should get into at some time. We obtained correct predictions up to 82 % on training data set and 85% on test data set. in a bid to predict who were the people likely to undervalue the customs consignments. packaged business analytics did not exist. While there are comparable drugs available. there is a wide variety of pre-configured analytics readily available in the market place. such as investments in reporting or modelling tools. we used the classification tree with error weighting and pruning which we applied to training and application data set pertaining to import transactions for the year 2004. What made the big difference was our focus on the domain and that we addressed the entire proposition from end to end. If cost was the criterion they were ready to give free supplies for a certain period. and 187 V Nagadevara Business Analytics – Some Applications Since the common applications of business analytics have been covered by the previous speakers. Today. we built the product for customisation. It prevented people from reinventing the wheel. The client wanted to find out who was likely to discontinue this drug so that their representative could talk to such patients. I will talk about some applications which I perceive as interesting and uncommon. This company sells a particular drug which makes use of IIMB Management Review. What made the big difference was our focus on the domain and that we addressed the entire proposition from end to end. We researched competitive offerings and figured out a ‘unique selling proposition’. medium 82% of the time and high 86% of the time. The drug is expensive as it is still under patent. after the task force formulations. We collected information on different variables through a feedback form and applied every possible classification technique but ultimately logistic regression gave us the result. in the Bangalore Air Cargo section. As a result. June 2006 . a common warehousing model that could interact with multiple tools at various points in time. So we originated the idea of the business solution pack which contained prepackaged application solutions. with reference to electrical and electronic items. The technology was capable of not only providing end to end support for business analytics but it could transparently integrate with any of the earlier investments. The next was a case from the hospitality industry on its loyalty programmes. The management model that we followed was the classical model for new product planning and for managing a product life cycle. medium and high spenders. Their problem was that the patient discontinued the drug after the ailment came under control. The product is a completely integrated solution set that provides a single view of all organisation knowledge. this specific formulation is not. We were able to predict correctly the low spenders 92% of the time. we presented the idea to leading analysts and got feedback on several aspects. the effort of the customs came down from 100% to 29%. We were creating a new brand and it required a lot of management investment and commitment. and then built a preliminary business plan and strategy.We formulate our products through internal ideation and external inputs. In the case of Indian Customs. The first is the case of a pharma company that came to us. Here we used artificial neural networks (ANN) on the variables and were able to categorise the low. In creating Reveleus. When we went into the market. The customer could also build in his own unique processes on top of what we actually provided as part of prepackage applications. usually under the advice of the pharmacist. Additionally.

a major player in printing. the diminished shelf life of products. simulation and forecasting. To give you an example of our experience with data. while the ink temperature had to be kept low. that is. how you change decision support and decision making to enable converting that data into action rapidly.In the business domain. the change in IT architecture and in products enabling data access. revenue management is a classic example of how a body of knowledge grew out of a need followed by rich interaction. If confidentiality is an issue. innovation. the data required to do advanced analytics or modelling. the diminished shelf life of products. innovation. and others have done in marketing and other situations. such as the University of Chicago that took the lead in crunching securities data. With businesses becoming more complex. Fast Query Languages. One is data. The second driver is statistical tools and this field. It is up to industry jockeys to apply them and it is up to the computer science academics to create the techniques. The US has a three-decade long history of collecting data. There are likely to be great changes in the art of usage given product complexity. academic institutions have been involved in the effort. With businesses becoming more complex. which includes the users. we did a project in RBI where we collected data for the entire history Discussion Mahadevan: B Mahadevan Are there specific challenges and issues that people face in a business analytics situation in which we may assume that they will not have data? Ajay Mookerjee: The answer to this lies in the relative levels Mookerjee of development of the US/Western and Indian economies. coming out with the guidelines that the chrome solution ratio and the ink viscosity had to be kept high. Academically there are four structural drivers to business analytics. With the new guidelines. But coming back to the key question on what do we do about missing data. Apart from organisations that have been collecting consumer panel or credit bureau data. 1999. A member of their team with machine learning specialisation used classification tree and solved the problem. as far as I know. the biggest challenge is on the demand side. Industry-academic interaction is quite well established. Wiley) which represents a completely different kind of data mining application. The Indian context on the other hand is very different and the IIMs can take the same leadership position as the University of Chicago did 30 years ago in the securities situation. the change in IT architecture and in products enabling data access. The next case is from Berry and Linoff. Ishwar Murthy: How do we get the academics and the Murthy industry working on a complementary basis? In the US. In 1989 the company lost 800 hours because of the cylinder banding. My own limited experience here is that there are several academics who are good at problem solving and are looking for problems to solve but nobody has come forth with problems for them to solve. and search techniques such as Google are making accessing data important. and I fully agree with Mahesh that this is an area of great applicability and advancement – products such as Reveleus. the number of hours lost was reduced to only 30 hours per year. The fourth structural area is the business domain. has registered no great advances since World War II. it depends upon whether the data is of the ‘required’ kind. and concerns such as marrying of decision support technology with data availability. The biggest challenge is on the demand side in understanding the whys of the complexity of the business environment. that too can be resolved by presenting the problem in very general terms. The third area is IT. CIBIL has been collecting credit history from all credit cards in India and that’s a step forward. there is a need from the demand side. R R Donnelly and Sons. spawning applications that gave rise to a lot of financial engineering and rocket science analytics. there are likely to be great changes in the art of usage given product complexity. (Mastering Data Mining: The Art and Science of Customer Relationship Management. Business analytics as in the application of statistics and the tools to solving these problems is not an academic discipline. which could include even simple reporting. or of a more basic level. 188 Business Analytics in India – Opportunities and Challenges: Discussion . their recovery was up to 92%. ran into the problem of cylinder banding which left a streak of ink running across the image. Ramakrishnan: amakrishnan Mahesh R amakrishnan To update you on the credit information history in India.

Hence you cannot really have a credit risk priced consumer lending programme in India on the basis of CIBIL data. It is good data. From the organisational point of view. I don’t think business analytics is a separate domain. either you hang up your hat up until CIBIL grows or you look for other sources of data. We do not have the infrastructure to do that and that is an opportunity denied to our academics. with better Srinivasan: inivasan data. converting paper-based data into database tables has become a thriving industry. missing data is never a major problem but if the ROI on the decision is not going to be worth the cost of collecting the data then we will use some heuristic technique or the other. We found it in archived paper and in a variety of databases in different parts of the world. For instance. In fact. if a decision is important then we will collect the data. Business analytics basically boils down to statistics. 20 years ago they did not have any credit research bureau. The biggest problem in India is getting in data on a regular basis. So if data does not exist you basically work around it and put in the infrastructure to collect the data. transfer of knowledge happening through the movement of Indians from Western markets or through multinationals. That did not prevent them from giving loans. which you can sign before you commence working on a problem. If you still insist on going ahead. Aspects of confidentiality. If you cannot trust the sources. These have laid the basic foundations on which we need to innovate. That was not possible at all. is not a question of 2% or 3% but it is an order of magnitude. which changed the structure of the neural network and at one point we had to give up. Like the initiatives taken by the University of Chicago that Ajay referred to. Thus. So clearly there is a lot of information available on banking habits and propensities on the asset side of the financial services in India. From 1983 onwards. we need institutions like the IIMs to take similar initiatives in the Indian context. Ajay Mookerjee: erjee Ajay Mookerjee I second Dr Waghmare’s comment that lack of data can never be an excuse. missing data is never a major problem but if the ROI on the decision is not going to be worth the cost of collecting the data then we will use some heuristic technique or the other. But why aren’t people thinking out of the box? Why are we not thinking of cross marketing when IIMB Management Review. we could have done better. the idea of a credit research institute which is part trade and part academia makes sense. Anand Srinivasan: Essential business functions are so critical Srinivasan that the opportunity cost of not doing something is simply too high. G Srinivasan We have been in situations in which. We were trying to build a model for a client when we discussed the possibility of getting data from a competitor into the neural network. Paul Alapat: I will not underestimate the importance of data. Getting high fidelity financial asset prices in India is very difficult. If you take the context of Indian banks. strong analytical minds. Nagadevara: V Nagadevara It is not just a question of not having data or working around the data. There seems to be a paranoia about sharing data. this was our experience. even if data is there and available. good statistical skills. The ROI of business analytics. Waghmar aghmare Tushar Waghmare: From an operations perspective. it is a question of its being accessible to everybody at a single point in time. Srinivas Prakhya: In the US there is a tradition of PhD Prakhya work being based on retired panel data. For example. we have lack of data? In such a situation. 80% of the market share of consumer-lending is enjoyed by public sector financial institutions in India and there are 200 million bank customers out there and at least 50 million consumer-lending borrowers. can be tackled through an MOU. a third of the PhDs in the US were econometric models based on retired panel data provided by the IRI. So. June 2006 From an operations perspective. There are also situations where you know that some of the data that is required is not available. you will have to work with dimensions with unequal data points. as Prof Nagadevara said. as raised by Prof Ishwar Murthy. I want to use this opportunity to request companies to see if there is any data which is no longer useful 189 . Alapat but its integrity is also important. and others where the data that you get cannot be directly used. then the data is meaningless. if a decision is important then we will collect the data. From the organisational point of view. and last but not the least. The data available was not always on the computer or quantified. a common complaint is that CIBIL is a new institution and does not have that many records. in the Indian context of consumer lending.of the organisation.

The best way to motivate the regulators is by inviting them for such seminars and enlightening them that it is important to release the brakes. Thirdly. the use of data for business development and growth was ill understood. such as the finance and risk management departments. faculty and doctoral students should focus on business decision making or decision support systems. Perhaps the lone example is of a private sector bank in the country which has built a BI solution to empower the employee at their Business Analytics in India – Opportunities and Challenges: Discussion . especially in a country like India. Data has not so far been seen as a resource to grow the business. we understood that the reluctance to share data within the organisation stemmed from a perceived ‘erosion of power’ by those who were privy to the data such as the finance and risk management departments. fact based decision making through research institutes. Many academics spend a lot of time tackling hypothetical decision support problems. Nagadevara say the same thing. but a move still has to made in that direction. The first thing that the banks needed to do. The Institute 190 for Development and Research in Banking Technology of Hyderabad and others who have hoards of data and who have made a start in analytics. they could use the willing resources in academic institutions in India. Investment in a data warehouse was seen as means to a implement a transfer pricing model. on basic inventory problems. it has been pretty impressive.In our interactions with some of the banks. do not waste the sharpest brains that India has. based on my own experience with the ‘data issues’ confronting banks in India. The RBI mandated some years back that every financial institution must have a data warehouse because they saw that as a big motivator for people to get into business analytics. You could train your students and the government officials to do that. Ajay Mookerjee: I have three pieces of advice for the IIMs. if you want a certain kind of data you have to get SEBI or the Registrar of Corporations involved because they have the data. Mookerjee One is. those closely involved in the business of banking in India knew that the backend transaction and accounting data that are required to build the data warehouses were distributed across 63. the use of data for business development and growth was ill understood. That would spawn PhD work and would no longer entail confidentiality. Two parties are ready but the third party is yet to be. which are part trade and part academia. If industry could come up with actual problems. We need something more. as far as your own research programme is concerned. etc.000 branch locations and consequently any data warehousing initiative could not take off. I know that logit progression gives the best result and I was very disheartened to hear Prof. and that is not happening at present. six million customers is considered to be a significant size by a lot of the US banks whereas that would be the size for some of the smaller banks in India! In our interactions with some of the banks. one aspect I would like to emphasise is the need to leapfrog developments. we need to come up with newer techniques other than the simple things that we have been doing so far. P C Narayan: I would like to share my thoughts in the area of Narayan banking. to compute product level and customer level profitability. Further. The transaction processing systems in these banks process 2 to 3 million transactions per hour on a base of 40 to 50 million customers! In comparison. there are several organisations such as the Reserve Bank of India. was to have a centralised transaction processing and accounting database. as a prelude to building a bank-wide data warehouse. In India. Ishwar Murthy: I would like to extend it not just to data Murthy and statistics but also to decision support. And if you look at the strides made by banks in India in this regard in the last 10 years. Waghmar aghmare Tushar Waghmare : Coming to Prof Murthy’s question about what it takes for industry and academia to collaborate. As things stand now. While it is true that the Vasudevan Committee Report recommended Indian banks to get into data warehousing applications. Further. we understood that the reluctance to share data within the organisation stemmed from a perceived ‘erosion of power’ by those who were privy to the data. to them and pass it on to institutes like ours. Secondly. Anshuman: Ravi Anshuman We are always talking about industry and academia but the key player is the regulator. Mahesh Ramakrishnan: Speaking of the sharing of data from Ramakrishnan the banking perspective. State Bank of India. you must take the lead in promoting the usage of data intensive.

A readiness to interchange data is more effective than an appeal to make data public. as banks generally are good followers of the ‘me too’ syndrome. compared to consultants. a credit card with a small limit or an automobile loan is pre-authorised automatically by the computer system for those customers who qualify based on the strength and longevity of his/her savings bank account. Mookerjee Banks must be encouraged to share data and to understand that they learn more by getting access to a bigger pool of default data. Ishwar Murthy: I want to thank all the panellists for taking Murthy off their time to make it here. every bank wanted to put out an ATM network of 5000 ATMs. That is the contribution that we can make. When this was implemented. This is a very fundamental problem.call-centre and the front desk in their branch to cross sell intelligently. it will work. This small but significant initiative enabled the bank to ‘cross-sell’ very effectively. We have had a fruitful discussion. We can consider the effort to be worth the while if we can compress the two years to 18 months! Academics will be heard more objectively and dispassionately by senior functionaries as they will be seen as people with no axe to grind. This information was made available to the call centre staff as well as the front desk staff in the branches on their computer screen whenever the customer called to transact. As far as data sharing on the credit bureau is concerned. June 2006 191 . We are now evangelising this across several banks and we believe that our efforts should be successful. Anand Srinivasan: Regarding willingness to share data. Srinivasan the airlines experience has shown us that if you make a valid proposition that you give while you get. For example. Narayan: P C Narayan In our country competitors do not want to collaborate. the real meaning of ‘effective use of data’ to grow the business was understood by the entire bank. It took six years of evangelising to make banks realise the value of a shared network. And soon everybody will start talking about the success of and the need for analytics! What are we doing in this process as academics? We are participating in this silent revolution by getting into ‘consulting engagements’ and sitting on the boards of banks to influence its senior functionaries in the effective use of business analytics and data as a valuable resource to grow their business. Back in 1988. Ajay Mookerjee: The network externalities are important. There are several such opportunities where we can deliver value to the customer and business growth for the bank using good analytics. we are probably two years behind in terms of this realisation. People will not collaborate till they reach a certain threshold level. Reprint No 06206 IIMB Management Review.

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