New Ways to Leverage Data to Drive Business Value
No longer the exclusive domain of tech companies or IT departments, data has become a business driver in a just about every industry and line of business. Data drives business value in two ways: It grows top-line revenue as companies create innovative new products and services — even entirely new business models. And it increases bottom-line profitability — not just by streamlining processes, but also by automating the management of assets and end-to-end supply chain through the Internet of Things (IoT).
As Gartner’s Andrew White stated in a recent blog post: “Data and analytics is not about a dashboard or delivery of an analytic to the point of a decision! That is so yesterday. Data and analytics is more about reimaging the decision in the context of an outcome.” To look at it another way, data has become currency, and businesses are finding innovative ways to monetize it. In fact, BCG estimates that big data and advanced analytics could unlock more than $1 trillion in value annually by 2020.
Perhaps the most visible way that data can drive revenue is in the data-driven disruptors that have risen since the dawn of the internet, from Amazon to Uber and beyond. These companies use data to create new business models that have reshaped their industries. But data doesn’t have to mean disruption. It can be leveraged by any company to target customers more accurately, gain a clearer understanding of the customer journey, and enhance the customer experience. None of these approaches are likely to upend an industry, but the better a company can process customer data the greater an edge it can gain over competitors; whether tracking online activities or using location-tracking to better anticipate and meet customer needs.
In addition, many companies are offering data as a service, or layering additional services on top of their data as a value-add. Even traditional manufacturers are differentiating their products with enriched data and analytics, a practice that Barbara H. Wixom and Jeanne W. Ross, principal research scientists at the MIT Center for Information Systems Research, call “wrapping information around core products and services.” My colleague Anant Kadiyala, Director of Industry and IoT Solutions at Oracle, highlights an additional nuance in the data/revenue equation, arguing that alongside the B2C solutions above, companies must also deploy data in a B2E (business-to-employee) model as well, in order to align employees and business processes to enhance customer engagement. To cite just one example: data-rich employee dashboards that permit rapid and efficient escalation of customer-side issues in real time.
The second way in which data can drive business is by improving operational efficiencies to impact profitability. We’ve seen this for years now as companies automate business processes. However IoT has added an entirely new dimension to automation, with more to come.
