Domino’s Pizza, Inc. (DPZ), International Business Machines Corp. (IBM), and Union Pacific Corporation (UNP): How These Companies Are Benefiting From Business Analytics

Logistics

The railroad sector has some pretty large barriers to entry, but that doesn’t mean you can’t be out competed by your competitors. As the industry saw consolidation, the bigger players always seemed to always get a leg up on smaller competitors. The space of analytics software is no different.

Union Pacific Corporation (NYSE:UNP) is a giant in the transportation sector. With over 31,000 miles of track, this behemoth generates millions of points of data from the speed of a train, to the number of cars that are being hauled, to the types of containers that are being delivered. With all of this data, new analytics software can help predict the amount of fuel that is needed in a train and the most efficient speeds to run at, all while providing customers an up to date mapping of where their product is. Union Pacific Corporation (NYSE:UNP) will be able to better control fuel expenses and provide customer service, but those aren’t even the biggest benefits.

Analytics software will provide these companies predictive models of where their train engines will need to be and what kind of train cars will be needed. The software will be able to tell Union Pacific Corporation (NYSE:UNP)’s management team that there was a shipment of auto parts to a Ford Motor Company (NYSE:F) plant on Tuesday, and on Friday they will need to have rail cars equipped to pick up SUV’s from the same Ford Motor Company (NYSE:F) plant as they start to roll off the assembly line. This is where the company will really see savings add up, as the computers will be able to most efficiently map where their railcar should be traveling to.

Foolish bottom line

Companies that adopt this type of software to analyze large amounts of unstructured data will see increases in their revenue and better services. Additionally, these same companies will see cost savings by reducing wasted marketing or fuel expenses. Software companies like International Business Machines Corp. (NYSE:IBM) that are providing this type of software to their clients will benefit from the huge recurring revenue streams from the software licenses for years to come.

The article How These Companies Are Benefiting From Business Analytics originally appeared on Fool.com and is written by Wes Patoka.

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