Originally authored by Martin Murtland. Updated by Len Gilbert 2021.
What’s a four-letter word that best describes why five companies – Apple, Microsoft, Amazon and Google/Alphabet – are worth over $1 trillion each?
That’s right: Data.
By now, most senior executives understand the importance of data at a theoretical level. But many continue to worry about how their business could be further disrupted by Amazon or a new data-driven start up using artificial intelligence (AI), natural-language processing (NLP), machine-learning (ML), the Internet of Things (IoT) or some other acronym.
If you’re among the worriers, it’s worth pausing to look from the outside into your business and industry to find the key trends you can leverage to grow and defend your markets. It’s essential that CEOs go after the insightful data needed to make it a reality.
Insights, after all, can help you improve your core operations and launch new businesses or business models that capitalize on changing customer needs.
Start by focusing on these five key trends.
Data trend #1: Platform is king
Platform is a group of technologies that are used as a base or infrastructure upon which other applications, technologies or processes are developed for the end-user.
Netflix, Amazon, the Microsoft Office suite and the New York Times’ website and mobile apps are all considered platforms. The number of industry-based platforms is steadily rising, driving innovation and transformation.
Do you have a platform? If not, should you build one? Or does it make more sense for your organization to piggy-back on existing platforms?
These are key strategic decisions that companies need to make.
Data trend #2: Mining for insights
Data, by itself, is useless. But a wide array of technologies enrich data to create actionable insights, including tools that help you visualize data, use ML to speed routine processes and leverage AI to analyze patterns and learn more about your customers.
In a recent engagement for a business information company, we learned the most important need that their prospects expressed was for actionable insight provided by machine-learning processing of legal documents. Investing in this technology will help our client expand their customer base and drive significant revenue.
Data trend #3: Business models
Creative destruction and disruption creates opportunities. Industries that have been disrupted (and which ones haven’t?) are in the process of being reinvented through the creation of new services and business models.
Companies with proprietary data are able to use the data internally and/or sell it externally and thus are much better equipped to do the disrupting rather than getting disrupted themselves.
Data trend #4: Skills gaps
Companies are only as good as the teams they build and the individuals they recruit, retain and develop. Companies need to be agile to survive and thrive. Talent is key and leading companies have invested in people with data analytics skills to deliver improvements and new initiatives.
Are you hiring data scientists, or providing your existing analysts with additional data and visualization training?
Data trend #5: API economy
Application Programming Interfaces (APIs), which connect your data to the world of cloud-based applications, make it cheaper and faster for startups to challenge established players. Businesses today can cut costs dramatically by connecting their data to third-party applications rather than purchasing and managing those applications in-house.
Data is the common denominator across all these trends. But why is data key?
We constantly hear that data is the new oil, the fuel that drives the engines of business. But just as crude oil needs to be processed into usable gasoline, data needs to be processed and refined into insights. Cognitive technologies like ML, NLP, speech recognition and robotics thrive on data.
These in turn can generate insights to enable better decisions to be made or processes to be automated which in turn create a positive feedback loop of continuous improvement. But the insights foremost must come from you and your team: What do you want to know about your customers, your market and how your goods or services are being consumed?
Companies that gain such visibility and insights have a competitive edge and innovate more quickly.
The right data needs the right analysis
The trick is to ensure the right data is analyzed in the correct way by the right person, or bot, to take the required action. This in turn helps build a smarter digital enterprise. The companies that will survive and excel in the future are those that use these new digital technologies, and rethink their processes, to enhance the value they create.
Customers don’t buy technologies. They buy the value you create for them.
The winning organizations won’t do all this by themselves but instead will partner with selected companies in the often fragmented and complex ecosystems in which they operate. This enables these data-driven organizations to improve their internal operations and grow revenue by creating greater customer value. This only happens by prioritizing innovation, leveraging changing industry dynamics and generating the right data.
We at dPrism are experts at helping you chart your new digital landscape. Reach out for a chat if you’d like to learn more.