4 steps to becoming a predictive business

8
NO. 62 E-Book SAP Center for Business Insight | Brief | Q&A | Case Study | Inquiry | E-Book Steps to Becoming a Predictive Business

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Why Is Becoming a Predictive Business Important? 2 Reasons: First, we all know that business is becoming more global and executives need better ways to understand demand from many new and wildly different markets. Second, technology is finally catching up to the need to be able to predict market demand and then quickly match up resources for production and delivery – to become a predictive business. Here are 4 ways to do it.

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Page 1: 4 Steps to Becoming a Predictive Business

NO. 62E-Book

SAP Center for Business Insight | Brief | Q&A | Case Study | Inquiry | E-Book

Steps to Becoming a

Predictive Business

Page 2: 4 Steps to Becoming a Predictive Business

E-Book: 4 Steps to Becoming a Predictive Business2 NO. 62©2014 SAP AG or an SAP affiliate company. All rights reserved.

Two reasons: First, we all know that business is becoming more global and executives need better ways to understand demand from many new and wildly different markets.

Second, technology is finally catching up to the need to be able to predict market demand and then quickly match up resources for production and delivery – to become a predictive business.

Here are 4 ways to do it.

Why Is Becoming a Predictive Business Important?

Page 3: 4 Steps to Becoming a Predictive Business

E-Book: 4 Steps to Becoming a Predictive Business3 NO. 62©2014 SAP AG or an SAP affiliate company. All rights reserved.

Disruptions can be much bigger than a supplier running out of a component. The growing frequency of flooding, droughts, hurricanes, tsunamis, and carbon pollution are cutting into bottom lines, ruining brand reputations, and disrupting business on a global scale. Predictive analytics and automated monitoring tools can be on the lookout for red flags, such as an increase in late shipments or a fire at a plant, and alert the right people before the entire production line grinds to a halt.

Read more in The Future of Resource Management: Become Predictive.

Predict Disruptions Before They Happen1

Fewer than

have direct connections with

suppliers

10%Supply Chain Professionals:

Only

have information available

within 1 day

20%

Page 4: 4 Steps to Becoming a Predictive Business

E-Book: 4 Steps to Becoming a Predictive Business4 NO. 62©2014 SAP AG or an SAP affiliate company. All rights reserved.

Determine the Best Actions toTake2

Companies collect tons of data; the big issue is how to make the best decisions from it. New York City’s Mount Sinai Hospital ran hundreds of simulations to optimize its patients’ first 8–12 hours in the hospital. That analysis helped improve utilization, which had the financial effect of adding 100 new beds – without actually adding a single one.

Source: Zachary Tumin, Doing Business the Data-Driven Way (Ariba 2013)

Page 5: 4 Steps to Becoming a Predictive Business

E-Book: 4 Steps to Becoming a Predictive Business5 NO. 62©2014 SAP AG or an SAP affiliate company. All rights reserved.

Gilt Groupe, the leader of online flash, or deal-of-the-day, sales, sends 3,000 highly targeted e-mails to its 3.5 million members each day. The messages predict what items members will like based on what they have shopped for in the past and what others who bought similar items like. Gilt updates its predictions daily and shares detailed demographic portraits of who’s buying what with its brand suppliers to help them understand and better target customer demands.

Source: Zachary Tumin, Doing Business the Data-Driven Way (Ariba 2013)

Act Fast3

Page 6: 4 Steps to Becoming a Predictive Business

E-Book: 4 Steps to Becoming a Predictive Business6 NO. 62©2014 SAP AG or an SAP affiliate company. All rights reserved.

Intangible assets – essentially the knowledge embedded in your products, services, processes, and employees – are key factors for building a more predictive business. Here are three strategies for keeping intangibles, and therefore your company, from stagnating:

Manage Your Intangibles4

• Don’t create isolated skunkworks. Innovation actually benefits from corporate knowledge. Integrate entrepreneurial teams with staff who are experts on corporate process.

• Share intangibles. Partnering might be the optimal path to innovation given the so-called patent cliff when patents expire. Companies can cooperate on innovation and compete on a higher level, such as packaging and design.

• Rethink traditional roles. Those who are closest to the data, such as supply chain managers, have the power. Try partnering them with R&D and marketing to bring a real-world perspective to innovation.

Read more in The Future of Resource Management: Become Predictive.

Page 7: 4 Steps to Becoming a Predictive Business

To get the full story, download the in-depth report The Future of Resource Management: Become Predictiveand the expert Q&A Redefining Resource Management.

E-Book: 4 Steps to Becoming a Predictive Business7 NO. 62©2014 SAP AG or an SAP affiliate company. All rights reserved.

There’s More

The SAP Center for Business Insight is a program that supports the discovery and development of new research-based thinking to address the challenges of business and technology executives.

Page 8: 4 Steps to Becoming a Predictive Business

SAP Center for Business Insight | Brief | Q&A | Case Study | Inquiry | E-Book

© 2014 SAP AG or an SAP affiliate company. All rights reserved.No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG or an SAP affiliate company.

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