Most industries have been disrupted, or are in the
process of being disrupted, by accelerating changes in their markets. The
Retail and Consumer Goods industries are no exception.
Shifting consumer behaviors, enabled in part by digital
technologies and the Internet of Things, are the prime movers of the headwinds
companies now face. Enormous amounts of new data are being generated and coming
online every day, that presents the opportunity to do something differently and
move the needle on business performance.
Another force of change, however, are the companies
leading the way in Big Data. These companies are illustrating how analytics and
new insights can not only differentiate you from the competition, but in some
cases dominate markets. For everyone else, this march of progress is creating
urgency to act quickly.
What many Retailers and Consumer Goods companies are
experiencing is a gap between their investments in the underlying technologies
of Big Data, and the anticipated benefits. The macro industry indicators around
challenged sales growth, margins, and consumer loyalty reflect this reality.
The gap looks a bit different between companies at the
bleeding edge of adoption and those just beginning their journeys. Yet there is
one thing in common between the two: wide-ranging views on what Big Data
represents in terms of value creation and how it fits within the organization.
Following are key trends affecting how companies are
addressing the challenge of employing Big Data for strategic, competitive
differentiation.
Considering your data as an asset
Gartner describes how companies can value data as a
financial asset or instrument, with data being accounted for on a company’s
balance sheet. This is not unlike Oracle’s view of treating data as capital. Even if you do not literally
approach your data in this manner, consider this: When retailer Radio Shack
filed for bankruptcy recently, initial reports around the sale of its assets
suggested Amazon prized their store locations to facilitate local pickup and
return service. In the end, the bankruptcy court found Radio Shack’s most
valued asset to be its customer data.
Had Radio Shack better recognized the value of its
decades of accrued consumer insights to understand changing consumer buying
preferences and adapt their business model accordingly, could they have avoided
bankruptcy?
Your Big Data leaders
Some companies are creating new roles, such as Chief
Digital Officer, or Chief Analytics Officer, to own Big Data strategy. Many
have yet to appoint such an executive, and are instead assembling a proxy for
the role: some combination of the CIO, CMO, CFO or COO, an Analytics Leader and
line of business leaders. Whichever model your company employs, it’s important
to know that Big Data is a multi-dimensional value driver.
Big Data is not a functional application, or a single
enabling technology for one silo of your business. The difference with Big Data
is that it represents ways for individual areas of your business to improve
with new insight, based on an understanding of all the possible data available
to the company – across silos, and even extending outside the company to the
dozens, if not hundreds, of vendors working on behalf of line of business
managers. It’s when analytics are applied to this diversity of data that new
insights can direct new decisions among functional areas of the business.
The role of line of business managers
The implication of the above directly reflects the
experiences of progressive adopters of Big Data analytics as well as those less
mature. Companies at the bleeding edge are finding the #1 inhibitor to Big Data
value is having more line of business managers recognize the opportunity.
Data science and advanced analytics talent is in high
demand, with a scarce supply. Irrespective of the hiring and retention
challenges, however, the lesson is that we must remember: most managers, in
most companies, still make most decisions by gut feel based on inaccurate or incomplete
information. That’s the data driven gap that companies are desperately trying
to close with Big Data, no matter their maturity.
Therefore, you must also remember that Big Data value is
as much a function of culture and mindset, as technology. You want managers
interested and engaged in making data driven decisions.
The changing role of IT
At a Gartner conference recently, a large roster of
companies succeeding with Big Data was cited. The session also mentioned what
Gartner was seeing among these companies: a bifurcation of IT, into an “I”
organization for information analytics and a “T” group to manage technology.
A singular group could not easily balance the needs to
operate technology at the lowest cost, while simultaneously helping the
business unleash the value of Big Data analytics. Gartner’s view reflects the
moves many companies have made to develop new departments outside of IT for
Data Science and Advanced Analytics.
Organizational versus technology considerations
Gartner also found that the same division would not occur
with the underlying technologies supporting both “I” and “T.” A single platform
should account for the needs of both your day-to-day business performance
reporting that IT manages, as well as the needs of analytics professionals who
need a productive environment to explore, model and deploy new insights back
into the business for managers and systems execute and measure. The underlying
data is therefore available to both, and a single approach also offers the most
efficient and cost effective solution versus maintaining separate and loosely
coupled technologies.
These ideas differ from how companies on the bleeding
edge have adopted numerous open source products outside the core technologies
used for business performance analysis and reporting.
Start with the end in mind
It helps to step back and start with the end in mind.
Your ideal state is one in which your business managers leverage data to make
better decisions, your organization is realizing the value of data and
analytics as differentiators, and functions collaborate with one another based
upon the new insights offered when you can leverage all available data sources
to fuel a data driven business.
Paint the vision, pursue the project
The way to think about all of this is to adopt a vision
for your company – such as the end state I mention above, and proceed with
specific actions, or projects, that demonstrate steps to achieving the value.
Your teams have the opportunity right now to rapidly spin up projects
leveraging cloud technologies to deliver value today.
To help managers believe in the value of data driven
decision making, they must see the value first and you must deliver results
quickly – which is what cloud computing represents. People’s attention spans
and personal agendas simply will not accommodate the typical timelines
associated with traditional technology projects.
Doing this well with an initial set of internal champions
creates positive chatter and momentum for others to engage in the process. This
is how you overcome the challenge that progressive adopters of Big Data
analytics are experiencing with a deficit of data driven managers.
The leaders in your company carrying the Big Data torch should
proceed along these lines. You want your leaders to drive to an integrated
vision for data and analytics, which leads to more managers adopting and
championing data driven decision making that materially improves the
performance of your business.
Gib Bassett, Consumer Goods and Retail Industry Principal
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