Data-driven business innovation is not something of distant future anymore. It is a reality of today. Many businesses are already reaping benefits of monetizing internal data that they already possess. Some are taking data-driven business innovation to the next levels by mashing up internal data with public data sources like social media feeds, weather data, and real time traffic information. Whereas others are working on generating new data from sources which were not possible in the past. For example, sensors and affordable wireless data communications is enabling gathering data from vehicles, agriculture, manufacturing, equipment utilization, and other. So what is fueling this revolution and why now? Following are few main reasons why this is happening and why you should give it a serious consideration.
- Cost of Storing Data – Cost of storing enormous amounts of data has decreased to a level where it is almost insignificant. Quite contrary to the old days when capital investment was needed to build storage infrastructure, now almost unlimited and on-demand data storage is available from many Cloud services providers.
- Availability of Analytics Tools – Data analytics tools, both commercial and in the open source, are available to process very large amounts of data at extremely low cost. Hadoop based technologies, Cloud services, and Machine Learning are fueling development of new tools.
- Use of Unstructured Data – Older technologies for data storage and analytics were mostly based upon structured data. However, machine learning and AI advancements have made it possible to use unstructured data for business purposes. Now it is possible to monetize notes from customer service representatives, IVR, and unstructured public data sources.
- Visualization – Data visualization is key to effective data-driven decision making. Now these tools are available as a service, enabling creating powerful visualizations and dashboards very quickly and without purchasing expensive tools.
- Wireless Communications – Very affordable wireless data communication is enabling collecting data from mobile sources and remote locations that was not possible just few years back.
How businesses can monetize vast amounts to data and create data-driven strategy for business innovation? The answer is a little different depending upon type of business and the industry segment. Following are some of the ideas that you can think about as a starting point.
- Customer Insights – A better understanding of customers and getting insights into customer behavior is every business’ dream. Data is enabling businesses gain customer insights for better customer services and building innovative brands. This is especially interesting for B2C interactions in financial, insurance, retail and other industries.
- Product Improvement – Many manufacturers are using data to improve products, identify product defects, understand how products are being used, and in many other ways.
- New Business Models – Many companies are using data to create new revenue streams at different levels. Some companies are simply getting into the business of selling data while others are offering data analytics as a service. Equipment manufacturers are working on providing proactive maintenance in addition to machinery, all with the help of data gathered through different sensors.
- New Levels of Efficiency and Process Improvement – Data is fueling gaining new levels of efficiency in business processes, manufacturing processes, and even in service industries.
The bottom line is that it is imperative for every business to understand the data assets they possess, understand the data value chain, and initiate a data-driven business transformation strategy.