Seeing the future with BI

Although playing defense was what pulled Chase-Pitkin into applying business analytics, Dorsey’s team -- like Rothman’s at EMA -- makes use of the capabilities elsewhere. According to Dorsey, analytics help the company with pricing experiments, allowing it to design new approaches in response to discoveries about customers’ behavior. “It makes us a heck of a lot more sophisticated,” according to Dorsey.

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Actually Actuarial
Pairing real-time data with targeted business analytics can have a dramatic effect. During the past 18 months, Apex Management Group, a health-care consulting and insurance services organization, has shifted away from being a producer of static, flat BI reports. The old model didn’t work for the companies’ actuaries, who try to chart a course for the future, not plumb the three- to six-month-old past, which is how long the previous system took to deliver actionable knowledge.

“In order to get to the next realm, we had to get predictive modeling, forecasting, deep kinds of cluster analyses,” says Dr. Jody Porrazzo, Apex’s director of econometric risk strategy.

Porrazzo and her group deployed a solution that includes SAS Institute's Enterprise BI Server. She chose to deliver some fast, obvious benefits -- for example, the senior manager who used to get one three-week-old report every three weeks now gets one every morning with data fresh from 3 a.m. that day.

Apex is cranking out actuarially informed applications as quickly as the environment is changing, enabling major parts of the organization to evolve in real time. As Porrazzo says, “You can’t be agile and surprised at the same time.”

For example, Porrazzo built a risk-factors model for congestive heart failure. As patient data pours into Apex’s data warehouse, the analytics pick out which patients are at risk and send a notification to the patient’s case manager. The case manager accesses the case file and risk factors via the Web, examines the details, and makes a judgment as to whether the patient requires intervention.

Apex is building tools for a very different future based on its BI infrastructure. For example, Porrazzo’s team wants to enable medical personnel to move away from the old model of using a static manual of protocols and toward a knowledge-based, evolving set of guidelines based on actual outcomes.

“The proof of success is success,” Porrazzo says. “Instead of relying on the manual, they can rely on outcomes. You already have the medical record data and the claim information. With our system, we will link it together for better qualitative outcomes.”

The Apex plan not only provides better quality but also gets benefits to the bottom line.

“We can reduce health-care costs,” Porrazzo claims. “Think of workman’s compensation. We work for re-insurers, and they have the case notes -- details like the type of accident, costs, demographics. But they also have the date the patient returns to work. I can use the analytics to get a model of when the client will return to work and then hook it up to the medical case notes, the records, and the claims."

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The result is a beneficial ripple effect through the core of Apex’s business. “I now have a true financial picture of benefits and costs,” Porrazzo says. “I can produce a better underwriting model.”

Reality in Focus
Strategic use of analytics based on fresh data -- and the increased distribution of insight throughout organizations -- is helping the best minds work in parallel toward business objectives. As Porrazzo says, “Before we integrated the data and applied analytics, we just had islands of information, data mavericks who gripped the useful data tightly without sharing. Now they have to share -- and we have one version of the truth.”

With this new analytics-powered, real-time model nearing liftoff, initial pilot programs and deployments are yielding insights into better designs and staffing models. It’s a serious step into a new foundation for organizations looking to increase the quality of their outcomes while holding the line on costs.

In 18 months, proliferation of recent technology and deeper experience will upset the established competitive order in more business sectors. By then, early adopters of the new, more agile BI may already be enjoying real business advantages.