If you’re a company establishing a data strategy, it’s not enough to say “let’s use analytics” or “let’s incorporate AI.” There are countless applications for big data and analytics, both good and bad. And there’s a nearly infinite number of ways you can incorporate them into your organization. The biggest hurdle is knowing where to start.
Unless, that is, you read the reports IBM produced for The Softchoice Innovation Executive Forum (IEF) 2018. IEF is an exclusive, members-only program consisting of over 400 Senior IT Leaders from across North America. The aim is to drive peer collaboration and mind-share while focusing on the challenges facing the modern IT leader, inclusive of disruptive innovation and organizational transformation. In these reports, IBM surveyed top c-suite executives and their organizations about their data strategies. A few clear insights emerge that could help you structure your own adaptations.
Keeping Personalization Personal
Personalization is a clear and established way to use big data to boost customer satisfaction. It’s highly lucrative, as well. A recent report from BCG states that personalization will shift $800 billion in revenue to the 15% of companies that do it best.
But none of that means it’s easy. A recent IBM Business Values survey showed that many executives are wrong in their intuitions about what’s important to consumers. It can be difficult to go from a mass of data about consumer transactions to a real understanding of the people behind the data.
That’s why the top-performing c-suite executives in IBM’s report take a more nuanced approach. These people, whom IBM calls ‘reinventors’, are different. They not only plumb huge amounts of data, but temper it with direct feedback from every available audience. Their firms engage in co-creation—one example being MUJI, the clothing company that solicits and responds to consumer suggestions. They engage in design thinking, combining their own research with direct surveys. They also closely monitor competitor decisions. After all, they might be missing something the competition already understands. In short, the reinventors pair big data with humility and curiosity.
Big Data, Big Ideas
This is not the only way top performers use data differently. They also tend to use it in non-traditional ways. They don’t stop at using big data in corporate strategy and marketing. The firms that use data most successfully also incorporate it in idea generation—a less common approach. In short, top executives, and thus top firms, treat data as a versatile resource.
Accordingly, their firms also ensure data literacy among their employees. Alibaba, for one, provides analytics training to all relevant departments. They feel it’s important for the whole business to understand the data they have access to. This allows a company-wide, holistic understanding of their data-driven perspective. In turn, this spurs innovation on every level, allowing creative employees in any department to produce new insights. They directly encourage this with the Horse Race, an internal ideas competition.
A Wider Platform
There’s one more innovative way that reinventors use data: to drive new business models. And one business model, in particular, is fashionable: the platform model. This is unsurprising given the success of Amazon, and Uber, and many others. Accordingly, 28% of c-suite executives surveyed by IBM report that their firms are currently diverting capital to platform development. And 46% report their firms are considering doing so. Companies getting into the platform business include stalwarts like Caterpillar and Nike.
Platform models are great from a data perspective. While they’re data-hungry, they also generate tremendous amounts of data themselves. This data can be used to improve the platform itself as well as other areas of the company’s business. Take Nike, and its NikePlus platform, a training and health service exchange. By generating data about how customers pursue these services, the NikePlus app engenders new product development. In cases like this, data creates a positive feedback loop. It helps develop platforms which, in turn, help produce new data and new insights.
Overall, top executives and their firms don’t just look at big data as an advanced form of marketing information. They treat it as an integral part of the way their businesses operate — and as a huge source of competitive advantage. Players like Alibaba, Caterpillar, and Nike are eager, not resistant, to embrace big data with big new strategies. Firms that don’t do the same squander a valuable resource and risk falling behind. This provokes the question: which kind of firm will yours be?
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