Companies and people see data as facts and figures. But SAS Institute believes that it is the lifeblood of the business. As the leader in business analytics software and services, SAS transforms data into insights that give companies a fresh perspective on their business and help them discover new opportunities.
As the head of a global team of 5,000 professionals in 48 countries, Mikael Hagstrom leads SAS’ Europe, Middle East, Africa (EMEA) and Asia Pacific regions, which account for more than half of SAS’ total revenue. Hagstrom, who was recently in Mumbai to attend SAS Forum conference, spoke to Rakesh Rao about adoption trends of analytics in various industries and advantage it offers to Indian customers.
How is the market for business analytics software and services?
Analytics is much more than a buzz word in India, and has now become integral part of any business module. It is not only about business modules, but also about managing the clients (which are large and diverse). Adaption of analytics is high in India and is rapidly stepping up. Today, users of analytics are no longer big-boys of corner office; it is going down to where client/customer interaction is taking place.
Last year there was lots of interest, but it was a wait-and-watch attitude. This year, customers are lot more confident and are exploring at ways to use analytics to enhance their businesses.
Compare to the other countries, how is the adoption in India?
The market for analytics has matured in India for high volume business. The large conglomerates are slow to embrace, but the challengers (to the established companies) are implementing customer-centric approach to their businesses and are quick to incorporate analytics. India is large country with customer demands changing from state to state, city to city. Hence, companies are adopting business modules which are more customer-centric, rather than product-specific.
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So, in India, we are seeing a two-speed progress. In case of the challengers (having high adoption), India is clearly ahead of other emerging markets. When it comes to traditional, large conglomerates there have not been a major difference as global competitiveness gains importance over local conditions.
What are the drivers for adoption of analytics in India?
Competitive pressure is the one. Other is increasing your revenue, while maintaining/reducing your cost.
If you simply do automation, you are going to have a declining curve when it comes to revenue and the cost you put in. Analytics has different return-on-investment (RoI), and that is driving the companies to adopt it. Competitive pressure and RoI-driven decisions are driving companies to embrace analytics.
How is the response from manufacturing industries (ie, excluding financial institutions and telecom companies)?
If we exclude these two sectors, then one has to look at public sector services. Though there are technological improvements, these do not necessarily mean changes in how the things are done. Changes in business processes are important because, if you do not, you will not be able to leverage information in a right way. So we have the first step in public sector, but not necessarily the second.
Retailers (especially multinational chains) are taking advantage of analytics to understand consumer behaviour better to improve their business processes. Manufacturing plants are also open to analytics as they have realised that just automation will not help them to improve quality, reduce cost, etc.
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In last two years, social data has exploded. And this is the area, which companies are tapping into to understand how the costumers feel about their products, etc. We are moving away from product to experience. This data is already available.
The next data explosion, which is round the corner, is in the processing industry (ie, sensor data). Here companies can improve business processes and increase the productivity because analytics becomes integral part of your manufacturing set up. This will accelerate adoption of analytics in the process industry.
Is Indian process industry open to using analytics?
Asset optimisation is increasingly been seen as imperative to improve profitability. If you move away from scheduled to predictive asset management one can save millions of dollars (depending upon the scale and capacity of the plant) in a blink. It’s all about analytics. This type of adoption (of analytics) is happening rapidly now and, with sensor data, it is going to be mandatory.
This is already happening in India. Energy companies are using analytics to predict energy demand in near future and match their production/supply to meet this demand so as to reduce losses and improve profitability. Even refineries are open to leverage analytics to solve their business challenges.
How are other technologies such as cloud and social media helping adoption of analytics?
Cloud and social media help in democratising analytics. Cloud help in making analytics available to more consumers at lower cost. Hardware and infrastructure for analytics is costly (may not be as much expensive as automation systems) for small entrepreneurs. Cloud will address that.
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Social media gives more data sources. Analytics become more important because you will be drowning the data otherwise. Drowning is expensive since you have to handle large volume that you cannot capitalise on.
How optimist are you about India?
You have large highly motivated and educated young workforce. This is India’s strength. Developed economies of US and Europe have to grow 3% to come back on track. And that can only happen if there is inclusive workforce with young population. So far they have not been able to do that. But, India has done it successfully.
The winner of the future will be the country that can have inclusive workforce to drive economic growth. We are seeing optimising coming back and India picking up growth.
Your outlook for SAS in India?
We have about 30% marketshare globally, and in India we have about 50% share. Market and strengthen of organisation in India makes me believe that we have the potential to double our revenues every third year.
While India has recorded slower-than-expected growth rate in the recent times, there is no reason for Indian economy to stagnant. India is in a better position from skills point-of-view to recover and grow fast. I believe confidence in India will come back soon. That is going to drive analytics.
India is not going to out-compete the rest of world in automation, but it has skills and capabilities to out-compete in the field of analytics.