The Surge in Predictive Analytics

Moving Big Data Solutions from Concept to Culture Paula Tolliver Corporate Vice President, Information Systems, Procurement, and Business Services Operations The Dow Chemical Company What is Big Data?

Big Data (Noun) That amount of data or complexity Which puts you out of your Comfort Zone

2 THE CHALLENGE?

VOLUME

VARIETY

VELOCITY

VALUE DATA SIZE

TODAY THE FUTURE 3 The Surge in Predictive Analytics

12% 2009 Predictive 33% 2012

31% Retrospective 29%

50% Both Equally 28%

1% Don’t Know 10%

Source: Analytics in Action: Breakthroughs and Barriers on the Journey to ROI. Prepared by Base: Total Respondents Accenture Analytics, with Findings from a Survey of Analytics Practitioners, 2013

4 Data as a Source of Inspiration

12% in 2009

Not at all really To a great extent 13% 25%

To only a minor extent 18%

To a moderate extent 44%

Source: Analytics in Action: Breakthroughs and Barriers on the Journey to ROI. Prepared by Base: Total Respondents Accenture Analytics, with Findings from a Survey of Analytics Practitioners, 2013

5 Moving Big Data Solutions from a Concept to a Culture

Paula Tolliver Corporate Vice President Information Systems, Procurement And Business Services Operations

The Dow Chemical Company Dow.com Topics

• Introduction to Dow • A New Reality – What we believe about insight and analytics • The NEXT BIG THING that will help us to achieve BIG THINGS • The journey ahead requires transformational leadership • A Case Study • Catalyzing a culture of analytical decision-making • Organizing for success – Making analytics foundational • Lessons Learned

DOW CONFIDENTIAL - Do not share without permission 7

The Dow Chemical Company – Who are we?

• Founded in 1897 in Midland, Michigan • Combine the power of science and technology to passionately innovate what is essential to human progress • Manufacture more than 5,000 products at 197 sites in 36 countries • Customers in approximately 160 countries

North America Asia Pacific Sales: $20,294 Sales: $10,247 Emerging Emerging 2008 28% 52,000 Employees 2012 35% Developed Developed Latin America Europe, Middle East & Africa Sales: $7,060 Sales: $19,185

2012 data; dollars in millions

DOW CONFIDENTIAL - Do not share without permission 8 A Diverse Product Portfolio & Customer Base Data… Data… DATA

Complex Global Supply Chain

DOW CONFIDENTIAL - Do not share without permission 9 Topics

DOW CONFIDENTIAL - Do not share without permission 10 A New Reality – for EVERYONE “Beware of geeks bearing formulas.” – Warren Buffett, 2008

“Big Data – Why Warren Buffett Invested $10 Billion In This High-Tech Trend” – Andy Batts Seeking Alpha headline September 2012

DOW CONFIDENTIAL - Do not share without permission 11 A New Reality – What is Big Data?

• Volume, variety and velocity of information increasing exponentially • Originating from internal / external sources • Structured, semi-structured, unstructured What can Big Data do? • Inform better decisions… … AT THE RIGHT TIME • Provide deeper context and comparison in the midst of complexity and uncertainty • Enable competitive advantage

DOW CONFIDENTIAL - Do not share without permission 12 A New Reality: Uncertainty Is a Certainty!

“The sustained uncertainty in the world economy continues to present an incredibly challenging operating environment… We have to take action.”

– Andrew Liveris, Dow CEO August 1, 2012

DOW CONFIDENTIAL - Do not share without permission 13 A New Reality: A Need for Better Information Are you capitalizing on Big Data?

Business leaders make critical Of business leaders don’t have access 1 in 3 decisions without the information 53% to information from across their they need. organizations required to do their jobs

If not, here’s what you’re missing: Organizations adept at analytics enjoy… Organizations applying analytics to data for competitive advantage are 1.6x more revenue growth, 2.2x 2.0x more profit growth, and more likely to substantially outperform their More stock price appreciation than industry peers 2.5x their peers

† Big Data: The New Natural Resource, IBM; Presented at IBM Information on Demand Conference, October 2012

DOW CONFIDENTIAL - Do not share without permission 14 Topics

DOW CONFIDENTIAL - Do not share without permission 15

Harnessing the Power of Analytics: A Transformational Approach Catalyze a Culture of Analytics • Anticipate and build capabilities • Cultivate executive understanding and support • Put points on the board NOW (credibility) • Gain ground and build momentum Organizing for Success…Make it Foundational • Multiply the analytics community, capabilities and resources • Connect the right problems with the right solutions

DOW CONFIDENTIAL - Do not share without permission 16 Catalyzing a Culture – Build Capabilities and Credibility

Phase 1 Phase 2 Phase 3 Phase 4 Anticipate & Build Build & Cultivate Support Points Now & Build Momentum Analytics Foundational Pre-2000 2000-2005 2005-12 2013+ 2009 began Analytics interface (embedding)

Differentiated • Strategic partnerships • Delivered $ Millions – business Business Operations • Build capabilities performance (expertise & tools) • Benchmarked leader – enabled • Modeling for Manufacturing • Developed growth external credibility by Analytics and R&D and hiring strategy

DOW CONFIDENTIAL - Do not share without permission 17 Catalyzing a Culture – Phase 3 Projects

Target Priorities / Focus on Core Business Needs Creating Quick Wins / Engaging Early Adopters • Purchasing / Market Analysis • Supply Chain Optimization Advising Core Business Decision Processes • Pricing • Value Chain Optimization • Inventory Management Predictive Forecasting • Predicting the quarter and forecasting the next three years

Reward users by making insight easy and timely to obtain.

DOW CONFIDENTIAL - Do not share without permission 18 Catalyzing a Culture – Gain Ground and Build Momentum… Continue to anticipate and look for breakthroughs… Customer Insights • Am I at risk with any customers? Which ones? Why? • What is the downstream impact of that risk? Market Insights • What is the marketplace saying about my product? • How can I improve my product relative to the competition? • How much value did my customer get from our last product improvement? • How can we “share” in that value delivery?

DOW CONFIDENTIAL - Do not share without permission 19 Multiplying the Analytics Community and Connectivity

Corporate and Business Analysts Chief Strategy Officer

Chief Financial Officer Commercial MBAs Finance Analysts Operations Analysts PhD / Masters Business Services Analysts Mathematicians Business Insight Competency Center Analytical and IT Strategy/ Governance Functional Application Teams Portfolio/Priorities People / Capital Data SMEs

Chief Information Officer Data Experts (IT and Subject) IT Architects IT Data & Info Stewards

DOW CONFIDENTIAL - Do not share without permission 20 Organizing for Success – IT Strategy & Architecture

Consumption Layer – Views & Tools Right tools for Operations, Executive and Data Exploration

SQL Query Diamond Systems Executive Insight Suite: Visualization Suite: SAS Tools Reporting Tableau, PowerView (Aster, SAS VA)

In memory Analytics, User Self service table joins

Processing Layer – TNF (Key, Key, Key) Just in time No Archive EDW Hadoop Big Data Extract Transform, Load and Manage Data Quality Foundation Layer – Data SAS ES SAP BW Radian 6 True DAS Asset Global sources Genomics Utilization SharePoint & NEA Insights Sysomos

DOW CONFIDENTIAL - Do not share without permission 21 Topics

DOW CONFIDENTIAL - Do not share without permission 22

Lessons Learned

• CIOs need to innovate and build capabilities before the need is recognized or articulated

• Executive support and C-suite roles are vital to transformation

• It’s essential to keep the priorities of your businesses top of mind

• To make analytics foundational, you must build:  Capabilities, including strong data management  Credibility for those capabilities  Connectivity (connect the right problems with the right solutions)  A prolific, competent analytics Community

Get started!

DOW CONFIDENTIAL - Do not share without permission 23 Questions? • Planning EXCELLENCE IN ENTERPRISE ANALYTICS • Continuous Process Improvement • Project Methodology PROCESS • Data Management and Governance • Business and IT Alignment • Vision and Leadership • Team COMPETITIVE Composition • Data Visualization ADVANTAGE • Web Portals / • Enterprise PEOPLE Authority Dashboards • Problem-specific • Change Business Solutions Management Predictive Analytics TECHNOLOGY • • Decision Management

25 Change Management PROCESS

COMPETITIVE ADVANTAGE PEOPLE

TECHNOLOGY

26 Business Analytics Maturity Assessment PROCESS

COMPETITIVE Overview: ADVANTAGE PEOPLE Two-day on-site discovery session focused on understanding the client’s business and IT objectives, key initiatives, existing information management TECHNOLOGY and analytics architecture, top challenges, and priorities. Process: • Review current business requirements, timeframes, critical success factors, and key business metrics (e.g. customer retention, customer acquisition). • Review operational data sources to support business priorities. • Review analytical priorities, strategy, process, and gaps. Deliverables: • Technology roadmap to optimize the client’s current and future IT-enabled analytical process. • Projected business value resulting from proposed analytical architecture and process improvements.