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3.Q 2013

Starting point Editor-in-Chief Anne-Lindsay Beall on getting ready for big changes in the world of analytics. Column: Business analytics Big data requires a whole new breed of analyst, says Jay Liebowitz. Heres what you need to know and where to find them. Column: Tech highlight Cloud technologies and big data are a match made in heaven, but there are questions to consider, says Tamara Dull. Column: Risk insights Mark Moorman shares a look at one UK bank that used high-performance analytics to reveal its true risk exposure in real time. Envisioning the future with data visualization Euramax employees have instant access to critical data anytime, anywhere with SAS Visual Analytics. Are you ready for Analytics 3.0? Analytics pioneer Tom Davenport on how the industry is evolving, where you need to go and how to get there. Everythings going mobile including your wallet Smartphone usage gives marketers an unprecedented window into consumer behavior if you have the right strategy. Using visual analytics to support policy decisions Heres how the Australian Institute of Health and Welfare uses visualization to explore data and find answers. Money in the bank Find out how the Royal Bank of Canada avoided $15 million in credit fraud losses. 2

cover story

Why your brain needs data visualization

The benefits of processing information through pictures.







Column: Best of blogs 29 When parts of Iron Man 3 were filmed on SAS campus, SAS became Stark Industries for a day.

starting point

Are you ready?

The team

R. LeVoyer Beall

f this issue has a theme, its preparation. The size and speed of your data is growing exponentially, the world of analytics is changing and we want you to be ahead of the curve. Thats why were continuing to explore data visualization. Visualizations are the single easiest way for our brains to receive and interpret large amounts of information. When you turn hundreds and thousands of variables into a meaningful pie chart, line graph or bubble chart, you give your business users the ability to use information intuitively to see connections and ask questions no one has ever considered before. Learn about the benefits of data visualization in our cover story: Why your brain needs data visualization (Page 10). Then see how its being used in real-world organizations: Euramax (Page 13) and the Australian Institute of Health and Welfare (Page 22). Also in this issue, Tom Davenport tells you how to get ready for Analytics 3.0 (Page 16) and takes a look at some companies that are leading the charge. In our Business Analytics column, Jay Liebowitz has hiring tips for the new breed of analysts youre going to need (Page 3), and in the Tech Highlight, Tamara Dull tells you how to bring big data into the cloud (Page 5). Thanks for reading,


Alison Bolen


Amy Dyson, Chris Hoerter, Amy Madison, Trey Whittenton


Beth Anne Ballance, Amanda Pittman


Lori C. Bieda, Martha Casanova, Tom Davenport, Tamara Dull, Jay Liebowitz, Mark Moorman, Analise Polsky

Diana Christofferson

Marchellina Waugh John Fernez, Steve Muir

David Accampo, Brian Lloyd


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sascom 3.Q2013

Jay Liebowitz is the Orkand Endowed Chair in Management and Technology at University of Maryland University College. His newest book is Big Data and Business Analytics.


Heres what you need to know and where to find them


business analytics

veryone is talking about big data. Big data is a big deal, especially in data-intensive industries such as cybersecurity, finance, health care, marketing, transportation and energy. And many of us are already familiar with the three Vs of big data volume, velocity and variety. But the key question is: How do we extract big knowledge from big data? The answer to this question is partly through analytics, which is a growing field within various sectors. Some people look at data analytics in terms of educating future data scientists, while others are exploring business analytics through educating a new kind of business analyst. Skills required Regardless of what you call them, the new breed of analytics specialists need to have a combination of skills, including statistical techniques, applied mathematical methods, advanced machine learning algorithms, data visualization, and business and communication skills. We often can find analysts who have the technical savvy, but they lack the business and communication skills to explain to managers and executives how results from analytics can inform organizational decision making.

The new breed of analysts must also possess the experience and instinct for knowing whether the analytics results have gone awry or whether they seem to have produced some valuable results. Recent MIT conferences on big data have talked about this value of intuition and making smarter decisions. The Partnership for Public Service and IBMs October 2012 joint report titled From Data to Decisions II talks about the importance of tapping a mix of people with different backgrounds and strengths. The report highlights the importance of an analytics team approach that takes into account background and experience. This approach should lead to a credible set of analytics results that focus on the goals and objectives for that enterprise.

{ ... the new breed of analytics specialists need to have a combination of skills, including statistical techniques, applied mathematical methods, advanced machine learning algorithms, data visualization, and business and communications skills.


5 TIPS for finding and keeping great analysts

1 2 3 4 5

Dont rely on human resources or search firms to find top analytical talent. Rely on your internal network of analysts and look to resource groups where analysts gather. Create a defined job path to keep your talent. If people cant rise above the job title of analyst or statistician, they will take their talents elsewhere. Hire communicators. You dont want to hire the rocket scientist who cant explain what he or she is doing to the layperson. Build relationships with universities. Good analytics candidates come from many disciplines, including econometrics, statistics, finance, marketing and agronomy.

Coach, coach and coach some more. Since it is tough to find the perfect analyst (even if you control the search), training is important. Many strong technical individuals with the potential to be great communicators are a bit introverted and need help learning to be assertive.

Having a multidisciplinary perspective should provide great value to the analytics team. New academic programs for analytics Universities and colleges are offering new degrees and programs in analytics. The Master of Science in Analytics program at North Carolina State University has been a model for most of these analytics programs and has recently doubled in size due to its popularity. Other programs include: The University of Maryland University College online masters in analytics (plans are underway to start this summer). Stevens Institute of Technology masters in business intelligence and analytics.

New York University masters in business analytics. Ohio State University advanced analytics center, formed with IBM in November 2012. Instinct a factor It has already been shown that business analytics can inform decision making (see the 2011 study conducted by Bloomberg and SAS). But how can we ensure that the next generation of analysts is prepared to extract the big knowledge from the big data? Certainly, having some background in knowledge discovery techniques as part of the analytics team may provide some helpful way to look for hidden patterns and relationships in the data and text. But how do we know that these relationships are worthy of further

analysis and exploration? How does instinct factor into the results? Its a Catch-22: You want analysts with technical and organizational experience, but new analysts who have the most up-to-date technical training often havent had enough experience to best understand the organizational setting. Thus, the team approach with a mix of background and experience will help address this concern in terms of building instinct into the analysis. Other ways to instill instinct into organizational decision making through analytics are: Rotate analysts assignments within the organization so that they can better understand its functional components. Assign senior-junior analyst mentoring so that the younger analysts can learn from the experiences of others. Dont take an answer for granted bounce the analytics results off of others in the organization to check the validity and reasonableness of the results.

NEXT steps z
Download the white paper: Make the Most of Your Analytical Talent

sascom 3.Q2013

Tamara Dull, Director of Emerging Technologies at SAS, has more than 25 years of technology services experience, with a strong foundation in data analysis, design, and development.

COLUMN tech highlight


Questions to consider before wedding big data to the cloud
t the March 2013 South by Southwest (SXSW) conference, Tim Byers of Motley Fool said, in many ways, [cloud and big data] are becoming one and the same cloud resources are needed to support big data storage and projects, and big data is a huge business case for moving to cloud. When it comes to the marriage of big data and cloud technologies, its a match made in heaven. But as romantic as that sounds, we all know that a strong relationship doesnt happen overnight and often requires a lot of hard work. Cloud and big data are no exception. What does big data bring to the table? In this highly hyped relationship, big data in addition to her sex appeal is the breadwinner, bringing usable information to your organization, which is what big data is all about. But before adding big data to your corporate mix, you need to answer these questions: How much big data do you really have? Does the volume warrant extending your current infrastructure? What is the nature of your data structured, semistructured and/or unstructured? Do you currently have

the infrastructure and technology to support these different types of data? Where is your big data coming from internal, external and/or open sources? Big data brings with it an abundance of data sources some new and some old and these sources are rapidly growing. Most importantly: Before embarking on any big data initiative, identify the business issue being addressed and the expected value it will bring. What does cloud bring to the table? If big data is the sexy breadwinner, then cloud brings a reliable, stable foundation i.e., the infrastructure to the relationship. Cloud offers multiple infrastructure options: Internal private cloud: a virtualized, dedicated infrastructure inside your firewall. External private cloud: a shared, but customized infrastructure hosted outside your firewall. Public cloud: a shared infrastructure hosted by a third party. Hybrid: a mixed environment of on-premises, private cloud (internal and external) and public cloud.

By 2014, more than of all workloads will be processed in the cloud.

Source: Cisco Global Cloud Index: Forecast and Methodology, 20102015.




Cloud is also known for bringing speed to innovation, agility and rapid scalability, and a lower total cost of ownership (TCO) to its relationships.

however, are the business analysts and data scientists who must provide insight around this big data. Support: With the additional hardware, software and skills required by big data, an organization needs to decide who is best suited to support this extensive infrastructure. If youre only interested in an internal private cloud, IT can manage this. But if youre looking to go outside your corporate firewall, you will need the support of a third party such as a software vendor or cloud service provider to host and help manage your corporate infrastructure. Performance: The closer you keep your data together, the better the performance will be. If your data is stored across the country or on another continent, you will need to consider the network traffic to upload and access the data; the results could be brutal. The volume of big data alone could bring your infrastructure to its knees and dissatisfaction to your internal and external customers.
The cloud computing marketplace will reach

Cloud computing made easy

SAS offers private and public cloud deployment options, providing you with flexibility and allowing you to quickly take full advantage of analytics in the cloud through: Rapid deployment. SAS software is provided as preconfigured packages, making it perfectly suited for quick deployment in cloud environments. Ease of use. Access to the tools you need when you need them via the Web and a simple log in to your SAS cloud portal. Innovation. Promote sharing and collaboration between teams via a cloud platform that supports agile development of fact-based solutions.

Dropbox, iTunes, Gmail and hosting arent cloud services, even though they are.
Source: Google Consumer Survey, January 2013.

60% of people think

Getting to your happily ever after If youve answered all the questions I raised about big data, and understand what cloud can deliver, youre ready to take the plunge. But like any relationship, there are things youll need to figure out along the way. Here are seven dynamics youll need to consider: Open source: At the heart of the big data hype is open source software, most notably Hadoop and its many related projects. The good news is that open source software is free, but it requires a solid understanding of the open source ecosystem, whether its installed on-premises or in the cloud. Data storage and processing: Big data has many compelling use cases, including the staging, preprocessing, processing, and storing of data short term and long term. Each use case may be best served by different facets of the infrastructure. For example, you can stage and preprocess data in a private internal cloud to keep it close to structured, on-premises data; process structured data in the private cloud; and/or store long-term data in the public cloud. Skills: The new big data technologies require skills you may not have in-house: open source (e.g., Hadoop), cloud integration, security and analysis tools, to name a few. Most importantly,

$16.7 billion
in revenue by 2013, compared to

in 2010.

$8.7 billion

Privacy: With big data, organizations can easily tap into new (and old) data sources such as social, open and machine data and combine it with existing operational and analytical data like never before. This can lead to fascinating and innovative insights about customers. But therein lies the challenge: These new insights may infringe on a customers privacy rights. Take heed of this important topic as it evolves. One final tip. Build a solid foundation by addressing each of these considerations, and youll see that the relationship between cloud and big data is truly a match made in heaven.

Integration: In the early stages of your big data journey, you will most likely work with the data in a standalone environment, whether it be on-premises or in the cloud. Long term, however, you will want to integrate big data with existing applications, systems and processes. The integration of big data across internal and external systems, in and outside the cloud, is forcing companies to reexamine their existing skills.



Learn about SAS Solutions OnDemand: Download the white paper: SAS and Cloud Computing

sascom 3.Q2013

Mark Moorman is Director of the Financial Services Practice for SAS EMEA and Asia Pacific Operations.


risk insight


A look at one UK bank that used high-performance analytics to reveal its true risk exposure
n the capital markets world, money never really changes hands; it only passes through them, and then only digitally. These markets are fast, immense, complex networks of extremely large amounts of monies or goods. In one single day on the London stock market, more than 700,000 trades may occur at a value of over 4 billion. In this environment, understanding the value at risk (VaR) becomes a complex, timely problem. One large UK bank decided it was time to evaluate its risk across all of its trading books. Being able to consolidate this VaR and get the data within minutes would give the bank an incredible edge over competitors that continue to trade on individual books and are working from VaR data as much as two days old. Major challenges As with any risky, fast-paced environment, the right information at the right time makes all the difference; even if that environment includes thousands of orders every second. Some of the current problems faced by this bank are: Reports are not generally available until one day after the transaction. Inability to readily understand the timeliness of the underlying data being presented.

Data from one processing system to the next have no commonly agreed-upon definition. Data is aggregated with no drill-down capability. No commonly agreed-upon official snapshot of trades or reference data for consistent enrichment. No understanding of what input parameters are used for the underlying calculation. Spikes or exceptions in the data are not automatically identified. Users cannot create watch lists of specific trades or subjects of interest.

{ It turns out VaR is no longer an adequate measure of risk. Nor is it capable of informing senior management of the true nature of their market and credit risk exposures.
SOLUTION: High-performance risk This long list of challenges boils down to a lack of access to relevant data and the inability to analyze the data appropriately. With no standardized view of the day-old data, it was just too hard to make accurate, timely decisions. It was time for a change, and the bank decided to deliver a high-performance,

sascom 3.Q2013

What can you do with SAS High-Performance Risk?

Get fast, accurate portfolio risk and exposure measures. React to market events faster and with greater precision. Quickly identify optimal actions and make the best decisions. Plan ahead and formulate contingencies.

automated VaR calculation and reporting process for market risk managers. This would allow the managers to spend more of their time evaluating risk rather than investigating data discrepancies. Of course, this was a major undertaking. To do this, they needed to focus on four major issues: Timeliness / Transparency Accuracy / Granularity The bank built a system that would allow them to aggregate the data on the fly into a single repository. So instead of waiting until the following day to get the latest reports, the risk management team can have an up-todate view of their risk exposures on an intraday basis using the latest blended view of interim and official risk figures to help inform the business decisions in a timelier manner. It was then possible to use drill-down graphing and analytic tools to make sense of this complex environment all before the closing bell and change course if the VaR exceeded their risk appetite. Making decisions on the fly To make its goals a reality, the bank needed to use two new technologies. The first is event stream processing (ESP), which allows on-the-fly decisions

in milliseconds. The second is a highperformance risk solution, which uses commodity hardware to distribute processing across a grid of computers, allowing access to granular data in seconds. ESP allows complex business decisions to be made on massive amounts of data in real time. The bank can now evaluate every trade singularly before the deal is made, and then accumulate it with other current trades to evaluate trends. Finally, the bank can synchronize this data with the global corporate data. In fact, this technology means the bank has: Continuous queries on flowing data (with incrementally updated results). Very low (max) event processing latencies (i.e., microseconds or milliseconds). High volumes (>100,000 events per second) of data evaluated. Derived event windows with retention policies. Memory constrained for performance (i.e., bounded state). Predetermined data mining, decision making, alerting, position management, scoring, profiling, etc. Event out-of-order handling to ensure ordered source streams. But it turns out VaR is no longer an adequate measure of risk. Nor is it capable of informing senior management

of the true nature of their market and credit risk exposures. For full transparency and the level of detail required by the business, many different types of analyses are now required including, but not limited to: economic VaR, sVaR (stressed value at risk), transient concentrations, extreme value, abnormal correlations and stress tests. Advanced, high-performance analytics lets risk managers quickly and easily explore a wide range of scenarios to help both senior management and the business be better informed about the true nature of the exposures on their trading books.



Download the white paper: High-Performance Risk



Why your brain needs data visualization

The benefits of processing information through pictures
by Analise Polsky

ccording to Research Scientist Andrew McAfee and Professor Erik Brynjolfsson of MIT, the amount of data that crosses the Internet every second is greater than all the data stored in the Internet just 20 years ago. This amounts to exabytes of data being created on a daily basis. If you tried to picture each individual data value that is being generated just in your company, your head would spin. The human brain is incapable of processing hundreds and thousands of variables at once, let alone millions and billions. Yet information


sas com 3.Q2013

FIGURE 1: How a traditional spreadsheet can be transformed into multidimensional data that can be sliced and diced by applying filters on any level of a hierarchy.

{ Visualizations are the single easiest way for our brains to receive and interpret large amounts of information.

can inform and enlighten your business practices, direction and vision. Fortunately, there is something to help your brain not only imagine your corporate information, but also consume it. Enter data visualization. Data visualization is the representation of data in a pictorial or graphical format. The purpose of data visualization is to simplify data values, promote the understanding of them, and communicate important concepts and ideas. Visualizations are the single easiest way for our brains to receive and interpret large amounts of information. Data visualization gives business users the ability to use information intuitively, without deep technical expertise. Even novice users can create data visualizations that are meaningful, such as pie charts, line graphs, bubble charts and heat maps.

Advanced data visualizations support more in-depth and complex analytics. A visual tier that sits on top of the analytics program lets users view the results of complex algorithmic processing. Not only can they get insight into whats happened, they can forecast what might happen, using rich graphics to quickly derive business actions. The fact is, when people transition from spreadsheets to data visuals, they are able to register the values they are seeing as a whole. Consider the manufacturing director of product reliability for an international company that produces small motors, like the ones you find in toothbrushes, toys or cellphones. Each year the company makes millions of vibrating cellphone motors. One of the directors principal responsibilities is to determine how reliable the




WHAT ARE THE TOP BENEFITS of data visualization?

Respondents to a recent IDG research study cited the following benefits of data visualization tools:

Improved decision making

Better ad hoc data analysis

Improved collaboration/ information sharing

Provide self-service capabilities to end users

Increased ROI

Time savings


Reduced burden on IT

cellphone motors will be with each year of age. If the products reliability falls short of the standards set forth by the cellphone manufacturers who use the motors, his company could lose major contracts. A traditional electronic spreadsheet cannot visually represent the amount of data that is collected on the age and reliability of the cellphone motors. In print, the spreadsheets would look like small mountains on the directors desk. In both cases, the director would lose countless hours poring over millions of rows of data, and he would still be none the wiser about his original question of the age of the motor and its reliability. Data visualization represents the data in a way that the director can easily interpret, saving him time and energy. For example, Figure 1 shows the number of units that correspond to each age (represented by the color gradient) as well as the reliability as the age of a unit increases. In a matter of seconds, he can see that units approaching 10 years of age are approximately 40 percent reliable. This visual simplifies the totality of the data, instantly clarifying what is happening with the reliability of the cellphone motors. Regardless of his computer expertise, the director can quickly derive meaning from the data that supports his job function. When the visuals are generated only by a technical user, on the other hand, it can leave a lot open for interpretation. Whether they work at the corporate headquarters or in the field, employees can use data visualization tools to unite around common visuals, inviting new conversations around data usage and

decisions. In the long run, this collaboration can save time and help bridge some of the decision gaps between business areas. Mobile applications for tablets increase the sharing and dissemination of data visuals among business users. Web-based applications unchain us from traditional desktop applications and encourage mobility and real-time interaction. Managers, account representatives and executives can all access visual reports and see key performance indicators from anywhere. Having a centralized access point for important reports and indicators minimizes the endless paper and email trails that often result in miscommunication and misinformation. There is no going back. The flow of data will not shrink in the near future; in fact, it will continue to grow exponentially. Time is doing us no favors, and we may not always have access to, or the resources for, all the technical experts that we think we need. Today we can use data visualizations and the advanced analytics that support them to meet these challenges head on.
Analise Polsky is a thought leader on the SAS Best Practices team. The focus of her work is developing and delivering data quality, data stewardship, culture and change management, and data visualization best practices.



Check out SAS Visual Analytics resources


sascom 3.Q2013

Envisioning the future with data visualization

EURAMAX Coated Products gets faster access to predictive decisions with SAS Visual Analytics

he leadership team at Euramax Coated Products knows that the companys success can depend on understanding and sometimes even redefining the future. One example of this vision? The extraordinary color performance of the worlds largest pre-coated aluminum roof at Ferrari World in Abu Dhabi, United Arab Emirates. The massive, red, logo-shaped structure looks almost like a futuristic ship has landed gracefully in the desert terrain. Another example is the companys commitment to business analytics and data exploration. Exploring data helps both our analysts and our decision makers in gauging the dynamics of our




for generating the best visualizations for your data

Understand the data you want to visualize.

Determine the kind of information you want to convey.

industry, says Peter Wijers, Euramax Business Support Manager. Were consistently striving to improve our processes and detect root causes for discrepancies in results. Confidence in the quality of our data leads to more rapid and fundamentally sound decisions. SAS Visual Analytics helps Euramax experience that confidence. With the completeness and the speed of data that SAS Visual Analytics provides, Wijers says, combined with its intuitive interface, our analysts can, and will, push themselves to get answers to their questions. More dynamic exploration Euramax Coated Products is a premium coil coater, serving the European, Middle East and Asian markets. Its three coilcoating lines manufacture pre-coated aluminum and steel for applications in architectural products, transportation and corporate identity design. Euramaxs pre-coated metals cover all kinds of products, from building facades to household appliances, working with some of the most prominent brands in the world. The companys objectives in employing visual analytics were to: Gain more dynamic reporting and exploration capabilities. Provide for more probing research. Enhance mobility, including the ability to carry data out into the field and share it with customers. We wanted to have our data available at any time, to gain quicker insights and make better decisions, anywhere, Wijers says, and to be able to present data in a variety of easy-to-grasp formats. Euramax now employs SAS Visual Analytics in multiple countries to improve production operations and broaden its research. The software is also used for financial reporting, with more applications being added on an ongoing basis. Drilling down The most common problem with static reporting, Wijers says, is that you can see deviations in the end result but still dont know the causes. Requests to analysts for detailed information take time and detailed results often raise more questions. Often an analysts gut feeling is right, but he doesnt have the means to easily verify it, he says. SAS Visual Analytics reporting tools allow users to quickly and easily add filters or drill down to a more detailed level of information. Focusing on the real causes But sometimes those gut feelings are wrong and heres where SAS Visual Analytics really comes in handy.

Know your audience and how it processes visual information.

Use a visual that presents the information in its best and simplest form.

With the completeness and the speed of data that SAS Visual Analytics provides, combined with its intuitive interface, our analysts can, and will, push themselves to get answers to their questions.
Peter Wijers, Business Support Manager, Euramax


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Euramax uses Lean Six Sigma teams to analyze and solve process issues in a structured manner. While productive, this process often reveals that expectations and gut feelings cant be proven. Sticking to those gut feelings can hinder employees in their search for improvement, Wijers says. While identifying outliers, visual analytics allows you to see correlations that werent expected, and the focus can be put on the real causes. Road warrior-worthy Equally important to Euramax is the mobility of SAS Visual Analytics. Many Euramax employees travel the world and are regularly confronted with the need for information instantly on their mobile devices, often with no Internet connection available. With SAS Visual Analytics, the key data is stored with the reports, so access is ensured 24/7, anywhere, Wijers says. Reports are also designed for the individual-user level, allowing Euramax to set up a safe structure for access. Our people now have what they need, when they need it, he says. Wijers is confident of the response as Euramax continues to make SAS Visual Analytics available to more employees: Theyre going to be thrilled to have it. Freedom and flexibility of analysis Wijers sees visual analytics as opening up the opportunity to explore new areas of efficiency and innovation to answer questions that havent previously been posed. Its a common fact that when analysts take a lot of time in offering findings, managements motivation to request different approaches to the analysis wanes, Wijers says. But with SAS Visual Analytics, once the data is loaded, analysts are off and running, without the need for any specialized support. With that level of freedom and flexibility of analysis, answers can be found much faster, and with a higher degree of quality. The power and ease of use of SAS Visual Analytics will allow our employees to analyze data in a much more efficient way. Now, knowing that all of the reporting is based on detailed flat data, editing a report and searching for root causes in deviations will be easy to do. Once users understand the power that SAS Visual Analytics offers, theyll be much more highly motivated to explore the data and offer new insights.


build reports that wow

With SAS Visual Analytics, an interactive report-building interface puts a variety of options for designing dynamic reports at your disposal. You can create stunning reports fast and make them interactive by adding features such as filtering, highlighting, radio buttons, drop-down/combo boxes, and more. Support for native apps on tablets means you can create touch-optimized reports with dynamic scrolling, pinch and zoom, etc. You can also customize themes and colors, and override formatting to adhere to organizational style guidelines and brand standards.



Learn more about SAS Visual Analytics




Are you ready for ANaLytiCs 3.0?

Dont worry. We got analytics pioneer Tom Davenport to tell us everything you need to know.

Tom Davenport is an analytics industry pioneer and serves as the IIA Director of Research and faculty leader. He is a visiting professor at Harvard Business School, a distinguished professor at Babson College, a research fellow of the MIT Center for Digital Business, and a senior advisor to Deloitte Analytics.

new age is dawning in the analytics industry: Analytics 3.0. It marks a new analytical era. Its about the widespread creation of new products and services based on analytics, and the point at which leading organizations will embed analytics directly into decision and operational processes. And the ones who get there will realize measurable business advantage from the combination of traditional analytics and big data. This Q&A with Tom Davenport, Director of Research for the International Institute for Analytics (IIA), will help you understand how analytics is evolving, where you need to go, and how to get there.


sas com 3.Q2013

What are the characteristics of Analytics 3.0? Davenport: The most important aspect is that analytics is driving not only major operational and strategic decisions, but also the creation of new products and services for companies in every industry not just online firms, as in the big data era. The easiest way for me to explain the other attributes is to give you a list. They include: In a synthesis of traditional analytics (1.0) and big data (2.0), organizations are combining large and small volumes of data, internal and external sources, and structured and unstructured formats to yield new insights in predictive and prescriptive models. Analytics is central to the organizations strategy. The Hadoop-alooza (excitement about big data technologies) continues, but often as a way to provide fast and cheap warehousing or persistence and structuring of data before analysis. Faster technologies such as indatabase and in-memory analytics are being coupled with agile analytical methods and machine learning techniques that produce insights at a much faster rate. Many analytical models are being embedded into operational and decision processes, dramatically increasing their speed and impact. Data scientists, who excel at extracting and structuring data, are working with conventional quantitative analysts who excel at modeling it and the combined teams are doing whatever is necessary to get the analytical job done.

Companies are beginning to create chief analytics officer roles or equivalent titles to oversee the building of analytical capabilities. Tools that support particular decisions are being pushed to the point of decision making in highly targeted and mobile analytical apps. What defines Analytics 1.0? Davenport: Analytics 1.0 represents an era in which enterprises start assembling business intelligence systems and expertise to drive reporting and descriptive analytics. During this era, very few enterprises view their systems as capable of generating predictive or prescriptive analytics. Enterprises focus on the internal, structured data that they generate without giving much thought to other types or sources of data. In this era, most organizations do not view their data as a valuable asset, like equipment or inventory.

3 WAYS to do high-performance analytics

To ensure that you have the right combination of technologies to meet the demands of Analytics 3.0, SAS offers three distributed processing options: SAS In-Memory Analytics Big data and intricate analytical computations are processed in memory and distributed across a dedicated set of blades to produce highly accurate insights that you can use to solve complex problems in near-real time. SAS In-Database Data integration and analytic functions are executed inside the database, which enables better data governance and speeds time to insight since theres no need to move or convert data repeatedly. SAS Grid Computing SAS jobs are processed in a shared, centrally managed pool of IT resources, which promotes efficiency, lower cost and better performance.




All industries will be affected by Analytics 3.0. The benefits from effectively leveraging big data, embedding data into decision making and truly becoming an analytical competitor will apply to any firm in any industry.
Tom Davenport, IIA Director of Research and faculty leader

What defines Analytics 2.0? Davenport: The primary difference from Analytics 1.0 is the emergence of big data: fast moving, external, large and unstructured data coming from various new and interesting sources. As such, it has to be stored and processed rapidly, often with parallel servers running technologies like Hadoop. The overall speed of analytics increases, and visual analytics (a form of descriptive analytics) gains prominence; however, predictive and prescriptive techniques are still not the main use of analytics. The users are primarily online firms. In this stage, a new community of data scientists emerges that fosters experimentation, hacking and data mashups. Regardless of industry, most enterprises are discussing new data product business opportunities that may lie ahead of them. Big data is still

very popular and, for many organizations, remains a challenge they are struggling to overcome. Among these three analytic eras, where do you see most businesses operating? Davenport: The majority of companies today are still operating within Analytics 1.0 and, in online firms, 2.0. But industry leaders are entering the Analytics 3.0 world. To achieve competitive advantage, firms must prepare for and embrace Analytics 3.0. Who are some of the companies leading the Analytics 3.0 charge? Davenport: Procter & Gamble is a prime example. P&G CEO Bob McDonald and CIO Filippo Passerini share an enthusiasm for sophisticated analytics and have created a culture that supports


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moving business intelligence from the periphery of operations to the center. GE is another early adopter. Theyre investing multiple billions of dollars in a new center for software and analytics. The goal is to offer new services based on the analysis of big data from industrial products theyre putting sensors in gas turbines, jet engines and locomotives. You see it in other industries as well. In pharmaceuticals, bioinformatics and computational biology are becoming as important as chemistry in creating new drugs. In auto insurance, several companies, including Progressive and State Farm, are putting devices in cars that measure how far and how fast you drive, and pricing your insurance accordingly. Are there specific tools required for Analytics 3.0? Davenport: Companies need to have the technical infrastructure to manage the volume of data. This includes technologies like Hadoop, in-memory and in-database analytics, and enough computing power to handle the complex calculations. In addition, companies need appropriate tools to effectively support decision making at the front lines, such as mobile and self-serve analytical apps. Which industries will be most affected by Analytics 3.0? Who will benefit the most? Davenport: All industries will be affected by Analytics 3.0. The benefits from effectively leveraging big data, embedding data into decision making and truly becoming an analytical competitor will apply to any firm in any industry. However, the speed with which companies are able to enter this world will depend on the analytical maturity of the industry. Transport, retail and banking are already highly analytical; there are firms in these industries already entering the era of Analytics 3.0. By contrast, I get frustrated with other industries that have big data but

dont use it much, like telecom and entertainment. What role will data scientists play in this evolution? Davenport: Data scientists are a critical element of the shift to Analytics 3.0. They have the skills to extract and structure the complex, high-volume data sets that organizations use. However, they need to work closely with IT and traditional quantitative analysts to develop insights for the business. It is critical that there is close collaboration and communication between the business, IT and analytics teams. How can companies prepare for Analytics 3.0? Davenport: Companies can prepare for Analytics 3.0 in several ways. They need to start with discussions among senior management about how they play in the data economy and what resources they already have. They will also need to create a chief analytics officer (or equivalent role) to oversee the strategic deployment of analytics. Next, theyll need to invest in the technology needed to manage big data and provide insights quickly. Finally, companies will need to recruit, retain and effectively use analytical talent. Theyll also need to ensure that analytics groups are aligned with the business and focus on critical business questions.



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Everythings going mobile including your wallet

Smartphone usage gives marketers an unprecedented window into consumer behavior

by Lori C. Bieda

ith the rise of mobile devices, marketers have perhaps the most robust source of customer insight and consumer access that theyve ever had. Handled properly, they will also have the ability provide the next generation of content, coupons and services for consumers. By 2014, mobile is projected to overtake desktop Internet usage globally1, meaning the window into consumer online behavior is literally in the palm of our hands. The opportunity for customer analytics is vast, and the volume of information generated is unprecedented. The age of big data for marketers is driven by smartphone data.

The mobile wallet race As consumers become increasingly attached to their mobile devices, everyone from telcos, retailers, banks and payment networks (such as Visa, MasterCard and Amex) to new media providers (like Facebook, Google and Apple) are rushing to offer mobile apps that allow consumers to leave their wallets behind and make purchases directly from their phones. Beyond simply engaging consumers at an app level, think of the customer insight marketers would have with the added insight of customer purchase patterns. The mobile device becomes the new credit card and window to the world, opening up a whole new vista of marketing and payment analytics.

Mobile: Its not just another channel For marketing analytics practitioners accustomed to mining huge volumes of channel and campaign data, mobile could be looked at as just another channel; its just one more component of a multichannel marketing strategy. Marketers might even view mobile myopically as a push channel, a place to send SMS messages and offers as part of an integrated campaign. But that would just be scratching the surface of mobiles customer insight and marketing potential. Marketing has evolved into a dynamic exchange whereby marketers capitalize on what they know about a customer based on past behavior, combined with new insights gathered through live


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{ The message is simple: If you want to engage your consumer, you need a mobile strategy. And if you want to maximize the impact of the channel, you need analytics.
channels in real time. Marketing has become a game of connecting content to customers. That content could be offers, but it could also be product or service information, or a myriad of other items that help create an exceptional client experience. The marketer who does that more quickly and relevantly than the competition gains share of mind and wallet. And thats why mobile is not just another channel to push marketing offers out. The mobile device is a digitized projection of consumer interests and intent. Its a gold mine of data for marketers looking to serve up a supreme experience and its a consumer engagement platform with unprecedented power to influence, taking a 360-degree client view experience to a whole new level. Effective mobile strategy Consider this: Today, smartphones influence 5.1 percent of annual US retail store sales, translating into $159 billion.2 Yet by 2016 its predicted that influence will climb to 19 percent, or $689 billion3, according to Deloitte. The message is clear: If you want to engage your consumer, you need a mobile strategy. And if you want to have an effective mobile strategy, you need analytics. That journey begins with setting up the right data hooks to better understand your customers behavior on mobile devices and mapping back to what you know about your customers via all other touch points on and offline. From there, you can use marketing analytics to understand and predict what content to present to customers and prospects based not only on their past behaviors and interests, but also contextually based on what theyre looking for and where theyre located. To do that effectively requires not only integrated marketing analytics, but also an integrated marketing system to enable that flow of content when and how the customer needs it. The smartphone offers great potential for relevant and timely engagement, something marketers have long strived for, and consumers crave. Marketers looking to gain a competitive edge need to invest the time to capture and convert mobile data into insight that enriches the client experience. Without that, marketers will be left toiling away in traditional marketing channels that will quickly become displaced and marginalized by the power of the tiny screen sitting in the palms of our hands.
1 2,3

Source: Stanley Research. Deloitte, The Mobile Influence Factor in Retail Sales, 2012.

Lori C. Bieda is the Executive Lead for Customer Intelligence at SAS. As a marketing and analytics executive with 20 years of experience devoted to driving profitable business growth through the strategic use of customer intelligence, Bieda has helped Fortune Global 500 organizations across many sectors evolve their marketing and analytics expertise.



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hat types of injuries result in hospitalization? How does dental care in remote areas compare with that available in urban regions? Is Australias medical workforce growing to meet the demands of society? When Australian policymakers ask these types of questions, the Australian Institute of Health and Welfare (AIHW) supplies the answers. As the countrys national agency for information and statistics about health and welfare, AIHW aims to improve the well-being of citizens through better use of information and statistics. Governments and community leaders use information from AIHW to discuss, debate and design policies for health, housing and community services. Warren Richter, Senior Executive for ICT and Business Transformation at AIHW, recently took some time to discuss the importance of visual analytics in the policy development process, and to describe how big data is affecting the agencys work.

to support policy decisions

A discussion with the Australian Institute of Health and Welfare


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WHY is data exploration important for the Australian Institute of Health and Welfare? Richter: Our mission is clear: Provide authoritative information and statistics to promote health and well-being. Thats what were all about. We collect, analyze, and disseminate information in the areas of health, age-care services, child-care services, housing assistance, child welfare, and other communityrelated sectors. We have also produced some performance indicators and targets for national agreements. Today, its not so much what we do with analytics; its a question of what we want to do. We have a long history of linking large and complex data sets for research and statistical purposes, and we have recently become one of the first two organizations accredited as an integration authority under the very strict Australian government arrangements for integrating data sets containing sensitive information about individuals. That means, after approval by an independent ethics committee, we are able to produce detailed information for research and analytical purposes. We take this role and our responsibility to preserve privacy and confidentiality very, very seriously. We undertake around 90 data integration operations every year, some of which are extremely complex. These accreditation arrangements enable the Australian government to make more data available for research and analysis. This is going to be of great benefit to the community over time. We are using SAS and SAS Visual Analytics to explore this data. There is a neat convergence of data and capability here a rigorous confidentiality and accreditation arrangement to free up data combined with the very exciting capabilities of in-memory analytics packages such as SAS Visual Analytics. HOW does big data influence your work? Richter: Statistical agencies like ours have dealt with big data for a long time, and we can continue to do the traditional analyses with existing tools. But the availability of large and more complex data sets is transforming what we are able to do. In our case, its come about

not through the Internet, but through the willingness of the Australian government to make more data available for analysis under strict conditions. But getting data from the Internet is also going to be relevant to us, because we are starting to explore opportunities to access real-time data as a byproduct of administrative operations as they occur, not just as they occurred in the past 12 months or so. Some statistical agencies around the world are taking direct feeds from point-of-sale terminals, for example, so youre measuring the economy as its happening. We think there will be opportunities to do similar things in the health sector. WHY did you select SAS for visual analytics? Richter: It boiled down to value for us: whether SAS Visual Analytics could handle the size and complexity of the data sets, whether it was easy to use, and then, of course, whether it supported the analytical techniques and visualization approaches that we require. Instead of focusing on every last whiz-bang, push-button feature, it was




High-profile patient safety issues have put increasing pressure on regulatory authorities, government officials and health care providers to identify potential problems before they become a threat to public health. SAS Visual Analytics helps rapidly uncover key insights across growing volumes of real-world medical and safety data.

more important for us to be able to use SAS as an extended platform so we can manipulate the underlying data sets and expose the analyses behind the visualizations. Its about the value for money and enhancing our existing data exploration capabilities. Increasingly, were being asked by government agencies to develop such things as clearinghouses of information not exactly data warehouses but dashboards that expose a particular sector or area within a sector for access by decision makers. SAS supports that vision. We also want to support decision makers and policy analysts in our client agencies, such as the Department of Health and Ageing. We need to work with agencies on policy problems, providing them with the data they need, when they need it, and helping them draw insights from that data with visualizations. We dont want to continue just doing what weve traditionally done,

which is to report on something. Were getting ready to support them as they explore and understand the data and to help them apply the right analyses. We want to provide even more value than we currently do. Essentially, we aim to help analysts to get the information they need in real time as they do their jobs, rather than make them wait 18 months for a report, which may not even fully answer the question at hand. CAN you give a few specific examples of policy areas that will be using SAS Visual Analytics? Richter: Increasingly, were supplementing more of our publications and cubes with visualization. And we plan to extend it to develop some new service offerings for our clients to support their decision making. One area in which AIHW is already using visual analytics is the development of new approaches for presenting


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The Australian governments new statistical data integration arrangements enable more information to be made available for research and analysis. This is going to be of great benefit to the community over time. We are using SAS and SAS Visual Analytics to explore this data.
Warren Richter, Senior Executive for ICT & Business Transformation Australian Institute of Health and Welfare

decision makers with information about mental health services. We are very excited about the way we can quickly and easily produce dashboards with rich visualizations from very complex and rapidly changing data sets and make them available online. We will be extending this capability to other subject areas very quickly. HOW might visual analytics be used to identify new types of questions and explore data differently? Richter: You know, if you have a small data set and you want to do some visuals using old-fashioned, run-of-themill analytical techniques, you can do that fairly easily. Even in a spreadsheet, you can run a simple regression on a small data set, but its not as easy when youve got a very large and complex data set to explore. Its very valuable to be able to say, Heres the data bang youve got it. Lets start to look at it without having to determine what sampling or subsetting technique to use, and determine if that is valid. We just dont have to worry about that now. Before visualization, you had to know exactly what analysts were looking for before you could build your cubes. Now we can make the whole data set available to everyone all of the time, subject to privacy and confidentiality considerations of course. Its terrific to

be able to get something going very quickly across large and complex data sets as they are created. IN CONCLUSION, can you summarize your long-term goals for visual analytics? Richter: We want to use the data that we currently have to shed more light on issues, to describe the real world better by using visualizations, and to support our key clients directly via visual analytics as they make policy recommendations and formulations using real-world data as it is created. We think we can help them formulate better policy proposals by giving them a much more intimate relationship with and a better understanding of the data. The ability to access a very large and complex data set easily and to do a what-if train of thought analysis together with our clients is very exciting, and we are looking to develop this as an ongoing high-value service.



SAS Visual Analytics resources




Money in the bank

Royal Bank of Canada used SAS to help avoid $15 million in credit fraud losses

or banks, credit fraud can be a royal pain. According to a Government of Canada report, the Canadian banking industry estimates that mortgage fraud causes hundreds of millions of dollars in losses annually.1 Mortgages are just one product within a banks credit portfolio, so this represents a mere fraction of the total lost to fraud each year. Royal Bank of Canada (RBC) wanted to use analytics software to predict credit fraud as a way of preventing such theft before it happens without affecting its relationships with legitimate customers. The best possible anti-fraud scenario is to prevent it from happening in the first place, but its a fine line between managing your customer relationships and catching fraudsters you dont want to interfere with providing service to good customers, said Brian Samarasekera, Head of Fraud Risk, Analytics and Detection at RBC. Lending products like


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mortgages, loans and credit lines are highly competitive, so its essential to hit the fraudsters only and not impact people who might go to another bank if they have a bad experience. RBC wanted to address what Samarasekera described as a sizable fraud loss component in its credit portfolio of mortgages, loans and credit lines. He was tasked with developing detection tools to prevent as much fraud loss as possible without limiting business growth or hurting RBCs standing with customers. Weeding out fraudsters Credit application documents contain information provided to the bank by customers applying to borrow funds. According to Samarasekera, SAS enables RBC to develop solutions to assess the veracity of customer information at a more advanced, detailed and corroborative level, ultimately helping the bank differentiate between fraudulent and legitimate credit applications. Previously, RBC had depended primarily on base-level fraud rules, negative file and credit bureau fraud alerts to identify and prevent credit fraud. The bank wanted a more effective method to stem its fraud losses. We were having difficulty bringing together disparate data both from internal and external sources and initially, we did not know what information was important to us in predicting cases of fraud, Samarasekera explained. But we knew we needed an advanced analytical tool to help us analyze all of these disparate data in order to make decisions. The SAS solution Kameron Yiu, Analytics and Modeling Manager within Samarasekeras unit, said it was clear that SAS was the best option for building a solution given his teams familiarity with SAS and the softwares reputation as a powerful analytical tool within RBC and the industry as a whole. With SAS Business Analytics, RBC is now able to bring together disparate data

Since we launched our SAS softwarebased fraud-rules engine, RBC has avoided approximately $15 million in credit fraud losses.
Brian Samarasekera, Head of Fraud Risk, Analytics and Detection, Royal Bank of Canada

including application data, bureau data, negative file data and derived-value data to perform sophisticated data mining, matching and relationship analyses to detect fraud. Data never corrupts on its own. If you have the right tools to get at the data, then all the nuggets of relevant information can be skimmed from the top, Yiu explained. A good data management tool is essential because you tend to find seasonal spikes, recurring patterns, demographic patterns all kinds of information that you can carve from data by using the right tools. SAS allowed us to develop a substantially sanitized data environment which was conducive to building and validating a few decision tree models that provided us with suites of fraud rules to target suspected fraudulent credit applications. RBC benefited from SAS collaboration with enterprise data warehouse leader Teradata. With the integration of the two, RBC applies the power of SAS using the Teradata Customer Enterprise Data Warehouse as a single source of information




rather than the multiple sources that existed before. This provides RBC with the ability to execute more quickly on the newest available customer information containing fraudulent or suspicious indicators. Yius team used SAS/STAT to develop spatial mapping to derive fraud predictive values and identify the movement of fraudsters. This enabled the team to recognize relationships between fraudsters behaviors and target areas where fraudsters are most likely to strike. The clustering functionality in SAS helps us build effective models by identifying the most significant predictive variables; we use the SAS segmentation methodology extensively to identify and differentiate fraudulent application patterns, Yiu said. SAS Business Analytics also helped the team manage the false-positive ratio of the fraud rules by containing it to acceptable levels, thereby minimizing negative impact on legitimate customers. Since we launched our SAS software-based fraud-rules engine 12 months ago after having created a complementing robust operational/investigative environment to treat alerts, RBC has avoided approximately $15 million in credit fraud losses Samarasekera said. Coupled with the manageable false-positives, we view that as a huge success.

Where does your institution rank in fraud prevention?

Start with a self-assessment to understand where your institution stands and what it needs to do next. Use the simple five-level assessment framework below to get started: LEVEL 1 The company is not using any tools and cant measure the sources of fraud or the magnitude or direction of payments risk. LEVEL 2 The company has processes and tools, but still bases investigations on intuition, tends to keep information siloed, and may not properly apply or understand the technology outside the immediate project team. LEVEL 3 The company has defined processes and uses tools to acquire data and assess fraud and risk. However, the ad hoc tools used to acquire data and manage fraud and risk may not be integrated with one another to make cross-channel communication and measurement effective. LEVEL 4 The company has a managed and measured approach. The institution can benchmark itself against industry performance, has processes in place to understand and root out new types of fraud and consider fraud potential prior to entering new businesses. LEVEL 5 The company is optimized. A portfolio approach is used to aggregate enterprise-level, crosschannel payment risk. The company is completely up-to-date with regulatory compliance and relevant regulatory guidance.



Download the white paper: Enterprisewide Fraud Management


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Shannon Heath is on the SAS External Communications team, identifying and developing communications strategies to generate awareness of the SAS brand and products, as well as SAS Alliance activities.


When parts of Iron Man 3 were filmed on SAS campus, the company became Stark Industries for a day

t seems like only yesterday that the SAS Executive Briefing Center (EBC) parking lot was filled with Craft Services tents, high-end luxury cars, movie cameras and, oh, a few celebrities. But its been a year since parts of Iron Man 3 were filmed on SAS campus and SAS became Stark Industries for a day. Surely many of you have by now seen the movie, and hopefully recognized that the beautiful lobby and glass doors of Stark Industries looked like the SAS EBC lobby. As I watched Happy Hogan walking through the SAS lobby on the big screen, and later Pepper Potts and Aldrich Killian saying their goodbye in front of the building, I started thinking clearly there must be other similarities between our two companies besides our lobbies. For example, both companies are eco-friendly workplaces. Stark Tower is powered by its own arc reactor, capable of sustaining the tower for a year at no cost to the city. The SAS EBC is LEED-

certified and also boasts many self-sustaining features, including water and energy conservation, a green roof, rainwater repurposing, electric car charging stations and more. Both companies team with superheroes. Tony Stark hangs with his Avengers buddies Captain America, The Hulk and Thor to protect the world. SAS co-created the Heroes of Analytics (, including Illumino, Megavox, Magnacomm, Predicta and Exploris, to help the world through analytic innovation. Both companies are Transforming the World. Stark Industries develops advanced defense technologies (such as Iron Man's body armor, S.H.I.E.L.D. helicarriers, Avengers' Quinjets and more). SAS develops advanced analytics for defense organizations (and for other industries, including health care, fraud, financial services, hospitality, retail and more). Both companies are led by innovative thinkers. CEO Tony Stark created his powered suit of armor,

which protects his body and the world. SAS CEO Jim Goodnight created THE POWER TO KNOW through advanced analytics, which also transform the way the world works.



Meet the Heroes of Analytics




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SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. indicates USA registration. Other brand and product names are trademarks of their respective companies. 2013 SAS Institute Inc. All rights reserved. S106702US.0513