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Analysing the future
Big data analytics has become the new darling of the software world as it continues to refine and help businesses reduce waste, increase profits and improve products and services. SAS is both the market leader in analytics software and still growing significantly. We hear what it’s like from the inside.
SAS is a world leader in business analytics software and the largest independent vendor in the business intelligence market. The Belgian business was founded in 1989 and has grown consistently and steadily, reaching a turnover of 39 m € in 2012 and employing over 130 staff.
The objective of the business is to provide customers with analysis and interpretation of ‘big data’ – the significant numbers that enable managers and business owners to forecast and predict trends, identify sections of the business that can be developed and improved, identify where markets are heading and what will be the profitable segments in the future and other headline interpretation and projection.
Patrick Van Deven is Country Manager for SAS Belgium and Luxembourg; he picks up this thread. “Analytics is certainly the hottest segment in the software market over the past few years. It has actually changed the way people think about how the world works and revolutionised the process of predicting and planning for the future of business. SAS is a world leader in this field and the largest data mining company in the world.”
The company has existed for 36 years and has adapted and remodelled itself to reflect all the massive technological changes that have happened over the intervening period. This has meant moving from the age of the main frame, centralisation and IT centric services to the much more dispersed, compact and customer-focused model of today.
“The sort of information analytics we supply are the lifeblood of progressive business,” Van Deven continues. “It can mean the difference between survival and failure. And the technology and systems are open to everyone now. They are easier to understand and use so access to the vital data is opened up. We have two arms to the business – software and services – and we market through 600 consultants; 60 of them work directly for us and the rest are partners. The software side of the business represents about 85% of our turnover.
“The analytics are becoming more and more sophisticated – and continue to evolve at a fast pace. For example, retailers can now examine sales and prices at such a micro level that they can begin to determine the optimum price to charge in different stores for different products to maximise profitability. This used to be done by human judgement – even intuition perhaps – but now it can be achieved scientifically and we can adjust the strategy finely to see what effect these changes might have. You can also try alternative strategies and scenarios to produce the desired result.”
“And it doesn’t just apply to retail. For example the first of our customers to really use big data in a very applied way was a pharmaceutical company; in fact they’ve recently received an award for this work in the field related to rare diseases. What they were doing was trying to monitor the ‘chatter’ from patients and families on social networks as well as the conversations of specialists and other developers. Their goal was to be able to further develop and adapt their medication and so provide a greater benefit for the patients. The job was huge but they used what we call ‘text mining’ to collect and analyse the data. I believe this will be the next big thing in analytics.”
People still key
And how has SAS changed itself to reflect technological developments, market conditions and customer expectation. “Actually SAS hasn’t changed that much fundamentally,” says Van Deven. “Because we were in a forward-looking business and sector when the founder, Jim Goodnight, started up the company the values and ethos had to be very much about innovation, managing change – and people. He was always aware that people were integral to the success of a business like ours but also that they had to be a good fit. You need people with the right skills and aptitude certainly, but you also want people who can work together as a team towards shared goals. I don’t think that has ever changed in SAS. The organisation was designed with a particular strategy and culture in mind and people join who are compatible with that.”
“The world has changed for sure,’ Van Deven continues. “And we want to continue to change the way the world works. Analytics and big data are already doing this though you might not always realise it.’
Analysing the world
Van Deven explains, “Take the coupons you get from supermarkets or the online ads from the likes of Amazon, eBay and Facebook posted on your account to encourage you to look at other products. These are all the results of analytics. Governments are using them, for example the Belgian government is employing the science to combat fraud; even President Obama’s election campaign used them to determine how to present himself and his policies. They are actually much more prevalent than you might think.”
“We don’t see it is as intrusive or a Big Brother sort of scenario,” he argues. “It is more about helping companies understand consumer behaviour and wants and meeting them better, and understanding how systems, markets, supply chains work in practice, to improve their efficiency. None of our clients have ever expressed the desire to use it to monitor or control any aspects of individuals that would be ethically suspect. They are very respectful of the regulations – and so are we.”
On-going partnership with Vlerick
“We have been a partner with Vlerick for five or six years,” Van Deven tells us. “They have assisted us in two major cycles of work – one on analytics, another on supply chain intelligence. They provide research and consultancy analysis for us. They have also done advanced management training for my team and I. This was a specially designed programme focusing on elements like leadership.”
“We have an on-going partnership with them,” he continues, “we undertake joint research and produce business cases for analytics that can be used in teaching and in the commercial environment. We also have mutual networking interests and there is continuous dialogue and sharing of information and insights between Vlerick, our customers and ourselves. So it is an important relationship for us in the way we develop ideas.’
Developing staff for the future
Van Deven is very clear and vociferous on the main issue that affects the company’s future. “Lack of staff. It is the same story right across the industry and in many of our client sectors also. Young people do not seem to be attracted to the sector – possibly because they didn’t fully understand what it is or what is required to embark on such a career. It was such an obvious and fundamental weakness that we decided we needed to do something about it. So, seven years ago, we initiated a summer programme to identify and train young people who might be suitable to work in this particular IT area. They get paid for the time they spend with us and, when they have finished the programme they can come to SAS or perhaps another company looking for these types of skills. We find that even the ones who leave tend to gravitate back towards SAS through networking and other contacts so we tend to get useful spinoffs even if we don’t directly employ the student.”
“It is a great way for us to get young people to assess and for them to see if they want to work in this area. It also makes sure we are getting some access to the pool of talent before they are attracted into other sectors or disciplines. We have made some changes to the curriculum this year including web-enabled learning so we are expecting even better results.
“SAS has managed to achieve significant growth while still being market leader, which is pretty rare. Initiatives like this have helped to keep us where we are; people tend to gravitate towards successful, visionary companies because they see they will get opportunities there and they will be able to use their skills and be rewarded for hard work, creativity and innovation. All the smaller independents in this market have been absorbed by the big multinational players like IBM, Oracle and SAP so we have to find ways to differentiate ourselves and make SAS attractive.”
Changing for the better
“Analytics is a force for good. For example, it can be used in supply chains to adapt the model so that, for example, less fresh food is thrown away as the right volumes are sent to the right places. It means too that there are less trucks on the road, less pollution and so on. So you see everyone benefits. Waste is reduced and unnecessary work and travel is eliminated. Can you imagine this applied throughout industry and commerce? It could have massive benefits for business and consumers – and offshoot advantages to the environment, general economy, and resource management. The potential is almost limitless.”
A word from Vlerick
Professor Robert Boute
: Because of big data, managers can measure, and hence know, radically more about their business than ever before. But it is key to have the right tools and models to turn this data into good decision-making. The opportunities to improve supply chains using big data are tremendous: it not only allows companies to analyse their actual supply chain practices in greater detail; in combination with advanced analytical models, this increased intelligence also fosters more informed decision making. Together with SAS, we are developing an analytic model to determine the most cost-efficient routing through the supply chain, taking the limited capacities in the supply chain into account. It helps to find out which products need to be delivered directly from production to the customer, and which ones should pass through a central or local Distribution Centre. It’s an increasingly difficult optimization problem, especially given the increase in hybrid distribution modes of traditional B2B deliveries and B2C e-fulfilments.
The use of data-driven analytics will undoubtedly change future supply chain management. By allowing companies to design supply chains that are ever more efficient and responsive, this trend creates increased surplus for all stakeholders, including the end consumers.