Would You Like 985% ROI?

According to a new study by Forrester Research, that's what some companies are getting by implementing Oracle Real Time Decisions (hat tip Manan Goel). This was a case study comissioned after an independent group at MIT discovered that firms employing metrics-based decision making are 5-6% more productive on average. This includes metrics such as asset utilization, and return on equity. This can mean big money to big companies, and in this particular case delivered 985% return-on-investment.

Dang...

For those who don't know Real Time Decisions (RTD) is an analytics engine in Oracle business intelligence stack. It's primary goal it to answer the question: what is the next best step? It uses just about anything as a data source, and as long as you can create a feedback loop to determine which action was "best," it will slowly tune the system to recommend what happens to be working best at the time.

For example, assume you have 5 banner ads on your home page about promotional products and services. Now... people find you home page from any number of references, or Google search terms. Which banner ad should you show them? Well... obviously the best one to show them is the one that they're most likely to click. Clearly if they search for "discount chairs" you might want to show an ad for discount chairs... but maybe for some odd reason "discount tables" or even "floor wax" gets more clicks. Using RTD, you can tune your system to react dynamically to what is currently popular with people who search for those terms.

From an e-commerce perspective, this boils down to cross-selling and up-selling opportunities that don't annoy the customer. First, it lets you create a customer "profile" -- not based on what the clicked in their profile, but according to where they live, the color of their hair, previous purchases, etc. Based on that, plus a feedback loop on future purchases, you can show targeted ads that are proven to deliver results.

Well, OK... so maybe one company got 985% ROI, but will you? Well, that depends a lot on the quality of the data you have in the first place. Or, as we say in the software word: garbage-in, garbage-out. And collecting that data can be a lot of up-front work. But if you collect the right stuff -- and are diligent about managing it -- you could see that 5% boost as well.

In any event, at least now we have some pretty solid evidence that you don't need to be eBay or Google to get value from data-mining... even mid-sized companies these days have some pretty rich data sets... if you know what to look for ;-)

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