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The Predictive Business: When Real-Time is Not Enough

Business is moving faster than ever. And real time is no longer enough.

To get and stay ahead of the competition, companies must not only sense the present, but see the future and proactively shape it to their advantage. That means anticipating risks and trends in the market, as well as developing plans and adapting processes to execute on them before anyone else.


The future of business is the Predictive Business. And while it may sound like a pipe dream, it is fast becoming a reality. Fueled by advances in technology, new business models and data types, innovative companies around the world are:

  • Predicting the future with accuracy
  • Assessing potential strategies and identifying those with the highest likelihood of success
  • Acting quickly to capitalize on these predictions by rapidly adapting their businesses processes to execute optimal actions ahead of the competition

Several technological advances are converging to enable companies to embrace the Predictive Business model:

The convenience and agility of the Cloud — Projecting future market and competitive dynamics is only half the battle. The Cloud empowers companies to innovate and adapt processes quickly to capitalize on market shifts. In the Cloud, people and organizations that share a business process also share the underlying technology infrastructure that enables that process. And they can engage in the process from any device, whenever and wherever required.

The connectivity and insight of social and business networks — Social tools like those used to manage our personal lives have infiltrated the enterprise and are changing the very nature of business and engagement. We are mobile, and apps on our phones and tablets give us new ways to discover and collaborate with our peers and trading partners. Just as consumers tap into personal networks to learn, share and shop better, companies are harnessing insights from business networks to detect risks and market changes, as well as chart recommended courses of action proven by others.

The power and speed of in-memory database and analytics — Companies can capture, analyze and act on information faster than ever before, thanks to major advances in technology. By combining both transaction processing and analytics on a single platform, in-memory technology eliminates the delays and inefficiencies inherent in parallel operational and business intelligence systems. It also enables companies to aggregate, correlate and assess countless bits of information and scenarios to determine the best course of action faster than ever before.

The accessibility of mobile — Today’s workforce demands flexibility in where, when and how they do their jobs. And companies are delivering on it, embracing Bring Your Own Device and mobile strategies that empower employees to access and share intelligence and execute the best courses of action whenever and wherever they are.

Why Predictive Business Matters

What you can’t predict can hurt you. Companies that don’t accurately anticipate customer demands run the risk of designing products that fall short of their needs — and fail in the market. Not sensing potential market, commodity or risks in the supply chain can lead to higher costs and missed sales opportunities. Organizations that rely on traditional methods to monitor employee performance, manage communications and drive collaboration may see poor execution and increased defections. And businesses without a clear view into their spend will miss opportunities to control their costs and more effectively manage their capital.

Companies that embrace predictive business can avoid these pitfalls and vault ahead of the competition.

Everywhere you look, information, objects and activities are moving at incredible speeds. And companies are using technology to share what they do, buy, think and watch at the moment it is occurring.

It’s a brave new world. And there will be laggards and leaders. The laggards will remain content to process and react to information in real time. Leaders will understand the need to move faster, sensing and predicting ways to drive smarter, better decisions and deliver the future of business today.

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      Author's profile photo Derek Klobucher
      Derek Klobucher

      Thank you for sharing your insights, Timothy. Will there be much difference in the ways big and small businesses embrace predictive business?

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      That's a great question Derek. Technology is a great equalizer. So the predictive business should be within reach for companies of all sizes.

      In fact, considering that the hard part of the predictive business is committing to changing your businesses processes and engagement model, one could argue that small- and midsize businesses are in a better position to capitalize more quickly. There are a number of examples of small firms using predictive business technologies and approaches to drive step-changes in operational performance, create new business models, and be disruptive in their own right:

      • ·         Every day, Gilt Group, the king of online flash sales, sends 3,000 highly targeted emails to its 3.5 million members predicting items they might like based on what they have shopped for in the past as well as what others who bought the 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. And the predictive approach has paid off. Gilt posted $500 million in revenue in 2011 and $600 million in 2012.

      • Mediafly, a fast-growing mobile content solutions provider uses business networks to engage in dynamic discounting service that accelerates receivables to 14 days instead of 90+. This gave the company the money it needed to hire additional developers to support new clients and expand its business. A major waste management company used the same service to earn more than $100K in discounts from suppliers in a single month through, giving it more capital to fund its operations.

      Of course, big companies like EMI, Cisco, and Union Pacific are embracing predictive business approaches to make some game-changing moves of their own. We are certainly just on the cusp of the predictive business era. But the accelerated pace of change (and the technologies enabling it), I expect predictive business approaches to become mainstream within the next five years.

      Author's profile photo Former Member
      Former Member

      Timothy, there has been much discussion about how SAP HANA can compress databases and run reports hundreds or thousands of times faster. Are there any examples you can share about companies that use SAP HANA to optimize inventory levels and transportation costs?