Ignore the gatekeeper at your peril
“Every business is a digital business,” opens Ray Eitel-Porter, Accenture Analytics’ MD, during his talk at Internet World on building foundations in Big Data. And he’s right, in this day and age if you’re a business and you don’t believe that you’re a digital one, then sorry, you don’t deserve to be a business anymore.
It’s evident by just looking at the companies who have managed to survive the rocky consumer market in the last few years. Those who embraced the digital realm survived, others fell by the wayside or clambered back onto the ark as the flood waters rose around them. The companies who had been sitting pretty in data for years before managed to stay relatively dry from the outset.
Putting the analogy aside, Eitel-Porter brought up some very good points. Accenture’s business falls on helping companies handle their data strategy and using his own analytics tools and surveys he’s noticed a trend in what’s going on in the data space at the moment.
While fluid and flexible startups seem to be the hot-topic at the moment, Eitel-Porter says that data is showing that larger enterprises are actually the “digital disruptors”. They have money, they have clout, and they can get almost anything done. They have bigger aims, bigger requirements and generally aspire to do bigger things – although, I would argue that they generally have their own interests at heart, compared to a plucky startup who wants to improve user’s lives.
The trouble is, these larger companies are like steering tankers; you can’t just change direction and expect it to turn. So, they’re actually partnering up or acquiring these agile startups and getting them to do the job for them. It’s a great way to reduce resource management issues that really hinder innovation inside larger companies.
But why is data so important now, when before it really wasn’t seen as something that had to be attained and analysed properly?
Quite simply, as Eitel-Porter puts it, there was just no way to do so five or so years ago. Now businesses are dealing with reams of data that’s pouring into their systems from customers all over the world – as any digital business now knows, if you’re online, you’re a global business. It’s gotten to the point where any successful business has employed a Chief Data Officer to just analyse everything they have and create a team who can really understand what all this data means. Forty per cent of companies feel that data isn’t bringing them the return on investment that they desire, but it’s no surprise when only one in five companies actually look at data across their entire business instead of treating each area as a separate data pool. It helps to region your data at times, and drill down into separate silos, but unless you can have a complete picture it’s mostly useless in comparison.
One great example of using data to improve user experience and business practice comes with Facebook. The social networking site has, for the most part, changed how we think and act with others online, so it’s no surprise that they’re also the ones leading the change. Facebook analysed all of the millions of images it was hosting online, seeing how many people accessed them and how frequently they did so. They noticed that for all of those images, eighty per cent of Facebook’s traffic only went to eight per cent of the images it hosted online. So, in the interest of reducing costs and improving user experience they created a three-tiered photo storage system. Popular images are stored on a super-fast and high-priced server, less common ones go on a reasonably speedy and moderately priced server, and those images that hardly anyone ever looks at end up on a slow and cheap server. It hardly impacts user experience when visiting the less popular images, but saved Facebook a lot of money in the process.
Being data-savvy also has an impact on the people you hire and the level of success your business will have too. Research by Accenture that Eitel-Porter brought up during his talk shows that 91 per cent of high-performing companies have a serious commitment to utilising data. They spend their money on analytics, predictive analytics and storing and understanding Big Data problems. They also sourced smart and tech-minded talent through partnerships with technology colleges and courses, grabbing them young and open-minded. Because of this, high-performers generally had better selling products and outcomes from marketing campaigns to engaged consumer bases.
Compare this to the companies who don’t put data at the forefront of their business, and, well, the picture is grim.
As Eitel-Porter nicely summed up, “analytics will be the driver of competitive business.”