Background

For each type of analysis think about:

• What problem does it solve, and for whom?
• How is it being solved today?
• How can it beneficially affect business?
• What are the data inputs and where do they come from?
• What are the outputs and how are they consumed- (online algorithm, a static report, etc)
• Is this a revenue leakage ("saves us money") or a revenue growth ("makes us money") problem?

Use Cases By Function

Marketing

• Predicting Lifetime Value (LTV)

  • what for: if you can predict the characteristics of high LTV customers, this supports customer segmentation, identifies upsell opportunties and supports other marketing initiatives
  • usage: can be both an online algorithm and a static report showing the characteristics of high LTV customers

• Wallet share estimation

  • working out the proportion of a customer's spend in a category accrues to a company allows that company to identify upsell and cross-sell opportunities
  • usage: can be both an online algorithm and a static report showing the characteristics of low wallet share customers

• Churn

  • working out the characteristics of churners allows a company to product adjustments and an online algorithm allows them to reach out to churners
  • usage: can be both an online algorithm and a statistic report showing the characteristics of likely churners

• Customer segmentation

  • If you can understand qualitatively different customer groups, then we can give them different treatments (perhaps even by different groups in the company). Answers questions like: what makes people buy, stop buying etc
  • usage: static report

• Product mix

  • What mix of products offers the lowest churn? eg. Giving a combined policy discount for home + auto = low churn
  • usage: online algorithm and static report

• Cross selling/Recommendation algorithms/

  • Given a customer's past browsing history, purchase history and other characteristics, what are they likely to want to purchase in the future?
  • usage: online algorithm

• Up selling

  • Given a customer's characteristics, what is the likelihood that they'll upgrade in the future?
  • usage: online algorithm and static report

• Channel optimization

  • what is the optimal way to reach a customer with certain characteristics?
  • usage: online algorithm and static report

• Discount targeting

  • What is the probability of inducing the desired behavior with a discount
  • usage: online algorithm and static report

• Reactivation likelihood

  • What is the reactivation likelihood for a given customer
  • usage: online algorithm and static report

• Adwords optimization and ad buying

  • calculating the right price for different keywords/ad slots

Sales

• Lead prioritization

  • What is a given lead's likelihood of closing
  • revenue impact: supports growth
  • usage: online algorithm and static report

• Demand forecasting

Logistics

• Demand forecasting
  • How many of what thing do you need and where will we need them? (Enables lean inventory and prevents out of stock situations.)
  • revenue impact: supports growth and militates against revenue leakage
  • usage: online algorithm and static report

Risk

• Credit risk

• Treasury or currency risk

  • How much capital do we need on hand to meet these requirements?

• Fraud detection

  • predicting whether or not a transaction should be blocked because it involves some kind of fraud (eg credit card fraud)

• Accounts Payable Recovery

  • Predicting the probably a liability can be recovered given the characteristics of the borrower and the loan

• Anti-money laundering

  • Using machine learning and fuzzy matching to detect transactions that contradict AML legislation (such as the OFAC list)

Customer support

• Call centers

  • Call routing (ie determining wait times) based on caller id history, time of day, call volumes, products owned, churn risk, LTV, etc.

• Call center message optimization

  • Putting the right data on the operator's screen

• Call center volume forecasting

  • predicting call volume for the purposes of staff rostering

Human Resources

• Resume screening

  • scores resumes based on the outcomes of past job interviews and hires

• Employee churn

  • predicts which employees are most likely to leave

• Training recommendation

  • recommends specific training based of performance review data

• Talent management

  • looking at objective measures of employee success

Use Cases By Vertical

Healthcare

• Claims review prioritization

  • payers picking which claims should be reviewed by manual auditors

• Medicare/medicaid fraud

  • Tackled at the claims processors, EDS is the biggest & uses proprietary tech

• Medical resources allocation

  • Hospital operations management
  • Optimize/predict operating theatre & bed occupancy based on initial patient visits

• Alerting and diagnostics from real-time patient data

  • Embedded devices (productized algos)
  • Exogenous data from devices to create diagnostic reports for doctors

• Prescription compliance

  • Predicting who won't comply with their prescriptions

• Physician attrition

  • Hospitals want to retain Drs who have admitting privileges in multiple hospitals

• Survival analysis

  • Analyse survival statistics for different patient attributes (age, blood type, gender, etc) and treatments

• Medication (dosage) effectiveness

  • Analyse effects of admitting different types and dosage of medication for a disease

• Readmission risk

  • Predict risk of re-admittance based on patient attributes, medical history, diagnose & treatment

Consumer Financial

• Credit card fraud
  • Banks need to prevent, and vendors need to prevent

Retail (FMCG - Fast-moving consumer goods)

• Pricing

  • Optimize per time period, per item, per store
  • Was dominated by Retek, but got purchased by Oracle in 2005. Now Oracle Retail.
  • JDA is also a player (supply chain software)

• Location of new stores

  • Pioneerd by Tesco
  • Dominated by Buxton
  • Site Selection in the Restaurant Industry is Widely Performed via Pitney Bowes AnySite

• Product layout in stores

  • This is called "plan-o-gramming"

• Merchandizing

  • when to start stocking & discontinuing product lines

• Inventory Management (how many units)

  • In particular, perishable goods

• Shrinkage analytics

  • Theft analytics/prevention 

• Warranty Analytics

  • Rates of failure for different components
    • And what are the drivers or parts?
  • What types of customers buying what types of products are likely to actually redeem a warranty?

• Market Basket Analysis

• Cannibalization Analysis

• Next Best Offer Analysis

• In store traffic patterns (fairly virgin territory)

Insurance

• Claims prediction

  • Might have telemetry data

• Claims handling (accept/deny/audit), managing repairer network (auto body, doctors)

• Price sensitivity

• Investments

• Agent & branch performance

• DM, product mix

Construction

• Contractor performance

  • Identifying contractors who are regularly involved in poor performing products

• Design issue prediction

  • Predicting that a construction project is likely to have issues as early as possible

Life Sciences

• Identifying biomarkers for boxed warnings on marketed products

• Drug/chemical discovery & analysis

• Crunching study results

• Identifying negative responses (monitor social networks for early problems with drugs)

• Diagnostic test development

  • Hardware devices
  • Software

• Diagnostic targeting (CRM)

• Predicting drug demand in different geographies for different products

• Predicting prescription adherence with different approaches to reminding patients

• Putative safety signals

• Social media marketing on competitors, patient perceptions, KOL feedback

• Image analysis or GCMS analysis in a high throughput manner

• Analysis of clinical outcomes to adapt clinical trial design

• COGS optimization

• Leveraging molecule database with metabolic stability data to elucidate new stable structures

Hospitality/Service

• Inventory management/dynamic pricing

• Promos/upgrades/offers

• Table management & reservations

• Workforce management (also applies to lots of verticals)

Electrical grid distribution

• Keep AC frequency as constant as possible
• Seems like a very "online" algorithm

Manufacturing

• Sensor data to look at failures

• Quality management

  • Identifying out-of-bounds manufacturing
    • Visual inspection/computer vision
  • Optimal run speeds

• Demand forecasting/inventory management

• Warranty/pricing

Travel

• Aircraft scheduling

• Seat mgmt, gate mgmt

• Air crew scheduling

• Dynamic pricing

• Customer complain resolution (give points in exchange)

• Call center stuff

• Maintenance optimization

• Tourism forecasting

Agriculture

• Yield management (taking sensor data on soil quality - common in newer John Deere et al truck models and determining what seed varieties, seed spacing to use etc

Mall Operators

• Predicting tenants capacity to pay based on their sales figures, their industry

• Predicting the best tenant for an open vacancy to maximise over all sales at a mall

Education

• Automated essay scoring

Utilities

• Optimise Distribution Network Cost Effectiveness (balance Capital 7 Operating Expenditure)
• Predict Commodity Requirements

Other

• Sentiment analysis

• Loyalty programs

• Sensor data

  • Alerting
  • What's going to fail?

• De duplication

• Procurement

Use Cases That Need Fleshing Out

Procurement

• Negotiation & vendor selection
  • Are we buying from the best producer

Marketing

• Direct Marketing

  • Response rates
  • Segmentations for mailings
  • Reactivation likelihood
  • RFM
  • Discount targeting
  • FinServ
  • Phone marketing
    • Generally as a follow-up to a DM or a churn predictor
  • Email Marketing

• Offline

  • Call to action w/ unique promotion
  • Why are people responding- How do I adjust my buy (where, when, how)?
  • "I'm sure we are wasting half our money here, but the problem is we don't know which ad"

• Media Mix Optimization

  • Kantar Group and Nielson are dominant
  • Hard part of this is getting to the data (good samples & response vars)

Healthcare

• CRM & utilization optimization

• Claims coding

• Forumlary determination and pricing

• How do I get you to use my card for auto-pay? Paypal? etc. Unsolved.

• Finance

  • Risk analysis
  • Automating Excel stuff/summary report