Business Analytics: The $250K Engagement

by Cesar Bacani, 16 November 2011

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Risk Management Technology

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analytics business insights corporate governance data warehouse risk management

Consultants are often described as people who tell you what you already know, just in fancier language. There’s some truth in that, says Tim Phillipps, Global Leader for analytics and also for the forensic and dispute practice at Big Four firm Deloitte.

“That’s what people have been saying about consultants for many decades,” he says. “The difference with analytics is that the approach we take often lets the data speak for itself. We’re just the vehicle that shows where the anomalies and the opportunities are inside the data.”

Phillipps (pictured) spoke to CFO Innovation’s Cesar Bacani about how companies can make sense of the reams of data that companies typically accumulate, towards the end of increasing sales, enhancing profitability, right sizing the workforce and dealing with regulatory and other risks – at around US$250,000 per engagement, on average, although some projects can be priced as low as US$50,000. Excerpts:

From Deloitte’s experience, how do companies in Asia use analytics?

It’s very much around the share of wallet. If I’m a mid-tier financial institution with some larger competitors or smaller competitors, how do I gain a larger share of customers and get a bigger share of their wallet so that they’re spending more with me? It varies depending on the material or the geography, but the story is fundamentally the same. [Analytics to grow sales], that’s one priority domain.

The other domain is workforce analytics. That runs from safety in the oil and gas industry, for example, right through to workforce management and planning for the future. What will the future workforce look like if we go through another recession and we have to reduce the size of the workforce?

The third one is the risk and regulatory space, risk in the sense of things like capital risk, financial risk, and the regulatory side, particularly those focused on regulated entities. Are we complying with all the requirements? Are we providing information which is truly accurate and correct to regulators?

We don’t sell hardware and software. Our interest is in helping CFOs and CEOs and boards get much greater insight into what’s happening inside their business.

We just use lots of the available software tools out there -- quite often, whatever a company has. Our approach is all about analytical methodology. It’s about smart ways of thinking about how to use the data to get the right answer.

So you don’t really need a data warehouse, analytics software, all the bells and whistles?

One of our clients in southwest Asia recently came to us and said, “Can you talk to us about building a big data warehouse in-house?” We got there and said, “It’s fantastic that you want to do that, but let me ask you a few questions. What do you want to know? What do you want the data warehouse to be able to tell you? What is important to your business? How will it inform your strategy?”

They couldn’t answer those questions. They had been told by a software supplier that a data warehouse will answer all that. What we’ve suggested to them is that they start at the other end, that they do some ad hoc analysis [first], find out what’s really important, and then use that to specify what the hardware/software is that they need to build, to answer those questions. It’s sort of a reverse approach.

Rather than build a big data warehouse that you might spend 12 months building and spend a lot of money on it and at the end you say, “Well, now we’ve got it. What are we going to ask it?” [Going the other way] usually keeps CFOs happy because it makes the company much more focused on what really makes a difference.

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