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The Decision Factor offers insightful comments and observations on analytics—from views on new technology approaches and market dynamics to the latest industry trends driving demand for faster, smarter information analysis. This blog contains personal views, thoughts, and opinions from SAP employees, mentors, and friends working in the area of analytics. It’s not endorsed by SAP nor does it constitute an official communication of SAP.


CSPs Can Stay Competitive by Using Data-Driven Insights to Improve Customer Engagement

big data word cloud above a laptop

“Out with the old and in with the new.” Is that the mantra of this new millennium that’s fueled with disruptive changes in business models and enabled by technology? You know what I mean— Skype, Whatsapp, FaceTalk, Facebook (communications), Uber, BlaBlaCar (Transportation), Netflix, iTunes, Napster (entertainment), Amazon (retail), Paypal, and Bitcoin (currency) are all examples.

What are the traditional businesses doing in the wake of such disruption? One thing they can do is hang on to their customer base and provide outstanding customer service, which ensures the customer won’t turn to an alternative. To make this a reality, every …

Analytics and the Internal Audit Report

analyzing data magnifying glass

Internal auditors have been using analytics (historically called ‘data mining’ or ‘computer-assisted audit techniques’ (CAATS)) to find potential issues for decades.

When I was with Coopers & Lybrand, we used analytics for a variety of audit purposes, including reperforming calculations, sampling transactions for manual auditing, and identifying unusual transactions for further inspection.

When I ran internal audit at Tosco and Solectron, we used analytics to detect millions of dollars of potential duplicate payments; at Solectron, we used analytics and a Benford’s Law routine to identify potential fraud in Suzhou, China; and at Business Objects analytics helped us search out …

Are Your Analytics Short-Sighted?

Are Your Analytics Short-Sighted?

We’ve all heard the old management phrase, “You can’t manage what you don’t measure,” but the reality is far more complicated than that. It isn’t practical or economically feasible to measure everything in a business. At the end of the day, it’s not about measuring what’s measurable— it’s about measuring what matters. Organizations have to choose what to measure when they’re building their analytics, which isn’t a trivial task.

Measure Past, Present and Future

Most analytic applications have historically focused on measuring past performance on a quarterly, monthly, weekly, or daily basis at best. Nowadays, technology makes it easier than …

Analytics at the North Pole — Manufacturing Master Class

North Pole

The sun sets on the North Pole around September 24, and doesn’t rise again until March 19. Without the sun’s warmth, temperatures plunge to an average -34 degrees Celsius (-29 degrees Fahrenheit). In this land of bitter cold and darkness runs the largest and most complex manufacturing operation in the modern world.

Santa Claus lives at the North Pole, with a number of magical elves and flying reindeer. Aided only by these unusual creatures and the dim light from the aurora borealis, Mr. Claus conducts his famous business. He compiles customer lists of children throughout the world and categorizes children …

An Employee Isn’t a Number but a Lot of Numbers


Imagine if your workforce were measurable. Not just measurable by performance but by characteristics AND performance. Wouldn’t that be great? You could individualize the employees and make them each a unique asset of your company that you can leverage optimally like any other asset.

With these employees, you could achieve so many good things.

Build successful managers by finding clusters of leaders in certain roles

Organizations are only as good as their management. Often managers are poor leaders who fail to motivate their teams to deliver the maximum output. However, research has shown that the output of an organization …

A Picture Is Worth a Thousand Words — Visualize Your Big Data to Innovate and Differentiate


What is big data? There are many definitions and opinions about this topic, but most agree that it has three main characteristics, namely volume, velocity, and variety. A recently published Gartner research report on the topic offers the following definition:

“Big data” is high-volume, high-velocity and high-variety information assets that demand cost-effective, innovative forms of information processing for enhanced insight and decision making” (Source: The Importance of ”Big Data”: A Definition, Mark Beyer, Douglas Laney, G00235055).

Communication service providers (CSPs) have all three attributes in plenty, and they’ve been investing in managing, safeguarding, and storing this data. The …

Will Next-Generation Technologies Solve the Compliance Challenge?

Woman Using ATM

Recent articles on ING agreeing to pay a >$619-million fine and HSBC facing over $1-billion fine have put anti-money laundering and compliance back into the limelight. These fines are mind bogging in size and reflect that although millions have been spent on technology in this area, they’re not fixing the problem.

What Are the Problems?

Ever-increasing compliance data is becoming a big data problem, requiring new approaches to sift through the information and the erroneous activity Latency …

Analytics — from the World of Finance to the HR Organization

Collaborative tools

In the finance and banking industries, organizations have employed for years mathematicians, statisticians, engineers, physicists, and highly-skilled specialists with super-strong analytical skills. They put these skills to work, sifting through volumes of financial, economic, and social data to identify trends, pick out the “needles in the haystack,” and determine the probability of markets going up or down. Their brain power, combined with machine resources, is focused keenly on exploring and acting on new ideas to increase the return on investments, whether through gaining a sub-second advantage in trading or in long-term ventures.

However, the …

The Power of Human Capital Analytics

Primary Challenges Facing Your Organization in the Next Two Years

The Digital Transformation of People Management, a recent Oxford Economics research paper, dropped a bomb: only 31 percent of HR departments surveyed provide key analytics across the enterprise to support and drive the business forward (this figure drops to an alarming 24 percent for firms in highly developed economies).

In yet another survey, Analytics: The New Path to Value, an MIT Sloan Management Review, the authors (Steve Lavalle, Michael S. Hopkins, Eric Lesser, et. al.) claim the challenges …

Improve Your Organization’s Bottom Line with Profit and Cost Management Analytical Applications


I’ve implemented net-profit and cost-management analytical applications – that include realistic, indirect cost at customer and product levels –at a variety of companies. Without exception, each one rapidly and significantly improved the bottom line.

Most companies know revenue, discount, COGs, and some direct costs at the customer and product level, but to complete the net-profit picture, they also need realistic indirect costs, which includes acquiring, supplying, and cost-to-serve.

Improving Customer and Product Bottom Line

Most analysts and experts say that knowing the true net margin at the customer and product level allows you to answer the question ”Which of my …