Business intelligence in a changing world

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Business intelligence in a changing
world Robin Bew, Chief Economist Special
Libraries Association Conference, June 7th, 2005
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Session roadmap

• How is the world changing?
• short term issues, long term challenges
• How are businesses responding?
• winning in a world of change
• What does this mean for business intelligence?
• staying relevant as business needs evolve

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How is the world changing?
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Short-term economic outlook
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Key points for 2005-06

• Exceptional times dont last
• 2004 the best year for quarter of a century
• but will not be repeated
• Struggle between cash and debt
• interest rates rising, but still low
• debt levels worryingly high
• Growth performance reasonable
• but cyclical divergence?
• Refocusing on domestic opportunities
• Downside risks remain significant

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US personal debt
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US outlook

• Problems are in the personal sector
• corporate sector in reasonable shape
• What will stop the consumer?
• debt service payments
• wealth
• housing, equity valuations
• Rising debt burden is unsustainable
• saving will stabilise (or rise)
• Gradual softening of economic growth

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Japan - blowing hot and cold
GDP growth,

• The cold
• In and out of recession
• Export led
• Capex consumption follow
• Strong yen
• Fiscal mess
• Demographics
• The hot
• Monetary policy
• Banking sector
• Domestic restructuring
• Inflation outlook

Y on Y
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Euro zone

• Poor acceleration, good brakes
• Export main growth driver
• Only growth driver in Germany Italy
• Domestic demand revival in France, smaller
  markets
• Growth under threat in 2005 and 2006
• US, Asian slowdown
• Strong euro
• Little policy stimulus
• Structural rigidities
• Credit data
• The meaning of no

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Emerging market focus

• Asia
• the rise of domestic demand, currency pressures
• East Europe the CIS
• productivity, trade, oil
• the significance of tax rate differentials
• Latin America
• policy orthodoxy, but still vulnerable
• Middle East
• awash with liquidity, but security issues
• Africa
• institutional failure in the second tier countries

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China and India

• China surging ahead
• oversupply in many sectors
• Risks to leaving investment unchecked
• Bad debts, margin squeeze, corporate failure
• short-term outlook, also long-term hangover
• India has slowed
• but no need for despondency
• Sector successes
• services, manufacturing
• But Chinese style performance unlikely

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Short-term worries
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Global pressure points

• The US dollar
• America choking on its own debt
• Liquidity withdrawal
• risk assets vulnerable
• China slowdown
• slowing, slowing, gone?
• Oil prices
• any relief?
• Physical security

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The changing shape of the global economy
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Changing global demand
US trn
GDP at mkt exchange rates
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Dynamic markets
Real output, 2005100 E7 China, Brazil, Korea,
India, Russia, Mexico, Taiwan
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US dominance threatened?
US trn
GDP at PPP conversion rates
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The changing growth league
2000-09
2020-29
Annual average real GDP growth,
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How are businesses responding?
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Changing business

• Business 2010
• EIU study in conjunction with SAP
• Survey of 4,000 executives and senior managers
• Key findings
• Changing strategic priorities
• Changing business models
• Innovating to stay ahead
• Improving the customer experience
• Changing role of IT

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Changing strategic priorities

• Specialisation to counter threats
• industry giants emerging mkt start-ups
• Speed and flexibility
• becoming core competencies
• People over technology
• finding and keeping the best
• Corporate governance
• global regulatory reach, so global application
• Partnership
• adding value via suppliers

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Changing business models

• Need to be adaptable
• more important than product innovation
• cope with changes in the marketplace
• often more important than product development
• Technology reinventing the business
• internal processes
• greatest efficiency gains
• e-business
• demand driven

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Innovating to stay ahead

• Understanding the customer need
• the greatest challenge
• more important than time to market, predicting
  future trends
• Using your data more efficiently
• internal systems, mobile technology
• Maintaining intellectual capital
• preventing brain-drain
• building a knowledge base

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The customer experience

• Quality
• of product and delivery
• Customisation
• one size fits all will no longer suffice
• Availability
• opening the company to the customer
• on line access to products, information

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Changing role of IT

• IT as a competitive tool
• not just a way to cut costs
• IT as a tool of the people
• technology useless without skilled staff
• What should IT allow companies to do?
• get the right information at the right time
• access to information anywhere
• instant alerts as things go wrong

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What does this mean for business intelligence?
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A more demanding market

• What does the EIU see?
• granularity
• increased demand for emerging and pre-emerging
  market information
• demand for industry information
• demand for risk analysis
• understanding the customer need
• need for customisation
• flexible delivery mechanisms
• demand for ever higher quality
• relevance, accuracy and speed

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How has the EIU responded?

• Increased our country coverage
• 201 markets, 150 with numerical forecasts
• Built a strategic industry capability
• integrated with our macroeconomic view
• Increased on focus on risk
• launched an operational risk service
• upgrading our financial risk service
• Hugely boosted our custom business
• market studies, political reviews, industry
  benchmarking, modelling and forecasting

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Flexible delivery mechanisms
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Maintain our tradition of quality

• 130 in-house country analysts
• 600 contributing analysts based in-country
• quantitative and qualitative approach
• reliable sources of local data in 201 countries
• sensitivity to geopolitical dynamics
• independent view
• ongoing assessment of global trends and events
• almost 60 years of experience

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Quality centered methodology

• Ensure quality
• Review of analysis by country experts
• Automated checks
• Final approval by regional heads

• Qualitative and quantitative approach
• Apply global assumptions
• Use a variety of models
• Provide qualitative insight

• Gather dependable information
• Use in-country analysts
• Select most timely, reliable data
• Conduct primary research

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What does all this mean for you?

• Your reality
• more demanding internal clients
• evolving offering from your suppliers
• The challenges (as we see them)
• match information to the need
• ever greater understanding of your clients needs
• ever greater understanding of the strengths and
  weaknesses of your sources
• The result
• a significant source of value to your business

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