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In the age of the digitally empowered consumer, data is the lifeblood of industry. Fuelled by ubiquitous smartphone/connected device availability and consumer preferences, global markets are being disrupted by the accelerated rise and convergence of Social, Mobile, Analytical/Data, Cloud and Internet of Things technologies (SMACIT).
The corresponding information funnel, i.e. data, provides a platform for bringing direct consumer relationships to a new personalised and profound level, by delivering continuous value creation to the individual user, and for businesses, by creating a competitive point of differentiation within an increasingly commoditised and borderless global marketplace.
For the avoidance of doubt, all companies are now data businesses. Consider the worlds largest taxi company that owns no taxis – Uber is a data company. The largest accommodation provider that owns no real estate – Airbnb is a data company. The world’s most valuable retailer that has no inventory – Alibaba is a data company. The most popular media owner that creates no content – Facebook is a data company. You get my point……
Commerce flows on data ecosystems
In order to compete in this new industrial age of digital transformation, businesses must evolve from a product led approach to a consumer centric service-based business model, founded on data delivering continuous value creation at an individual level.
By creating commercial graph ecosystems to capture and analyse data in real time, businesses can derive valuable consumer insights, contextual preferences, behaviours and predictive models showing likely intent, to deliver personalised value exchange to the end user across the entire consumer life cycle.
And while ‘digital native’ companies are ahead of the Big Data curve due to the fact that the founders and first employees built a new proposition in the digital space where the fundamentals of the business are data led, the opportunities for traditional industry can be equally positive. For businesses that think otherwise, well, they are likely to miss out on $430 billion in productivity benefits alone by 2020, according to International Institute for Analytics.
Not all data is created equal
The crucial insight here is that not all data creates value. ‘Digital native’ companies are built upon a data-driven culture, where data sits front and centre in all units of the business – consider it the focal point that makes the products and services perform in unison.
The flip side for traditional industry caught up in the ‘data is the new oil’ fever – as the above image metaphorically illustrates – is that they often feel like they are drowning in a data tsunami as a direct result of data hording policies, where all ‘data’ has perceived value. The logic is that at some future date & time it will be an add-on to the core product or service offering .
The key problem with such a policy is that the vast amounts of acquired and retained data offer no value and/or unknown value to the core business proposition. In fact, according to a recent global report by Veritas, 85% of captured data is useless to business and is likely to create a $3.3 trillion drain on resources due to a culture of data hoarding based on inadequate and poorly devised data strategies.
The ultimate goal (i.e. business objective) is a customer centric transformation strategy that delivers continuous customer value creation. The business now becomes a powerful platform, leveraging data analytics to create superior and unique customer experiences that are aligned with the consumer (life cycle) journey.
By designing highly personalised and contextual digital services based on data insights, it can foster deeper consumer centric interactions that strengthen brand equity, and fuel cumulative consumer advocacy to maximize the network effect, and viral consumer network adoption.
Furthermore, it establishes strong scalable advantages by improving executive strategies leading to business process optimisation, and enhancing capital and resource efficiency across the business. It provides continuous customer insights in product and/or service adoption, improved customer relations and thus customer lifetime value, and supports future up-sell and cross-sell services evolution. In addition, it helps transcend core services by fueling future innovation and facilitates growth opportunities via adjacent market disruption.
To conclude, I think Daniel Keys Moran captures it nicely with “You can have data without information, but you cannot have information without data”.
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