It is true that the buzzword in industry is analytics. This seems surprising to us in the market research industry. Data and analytics has been our baby for the last 50 years. When you drive your car, of course you need to look out of the window, but you would be a fool to set off without checking your fuel gauge or occasionally looking at your speedometer. A map may come in useful or, more likely today, a Sat Nav (GPS). Our industry has long provided much of the good data on the company dashboard and the Sat Nav to guide your journey.
The problem is that data is fast becoming a commodity. There is so much data handed out for nothing. It is in front of you in the newspaper. It hits you from the television. It sits under your nose in your company and, of course, it abounds on the net. In fact, most of us are paralysed by too much data.
However, there is some data that is almost invaluable. Just think of the things you would like to know about your market. Which customers are likely to be buying the products or services you sell in the next few months or weeks? And when they do buy, what will drive their decision? Where do you sit in their consideration set? What are the unmet needs in your market and how could you satisfy them? What will your market look like in five years’ time? Who will be the competitors to wrestle with then? The list could go on and on.
What do you think? Will data be the new plastics?
By Stefan Stern
Last week a very wise man – OK, it was my chief executive – said a smart thing. “Data is the new plastics,” he declared. This was a sly reference to a famous scene in the film The Graduate. What he meant, I think, was that the unlikely subject of data has suddenly become fashionable. It is now the sort of discipline you might encourage your son or daughter to pursue.
Clever people talk knowingly about “analytics” – managing better with the use of data – as if they have discovered the secret of business success. Perhaps they have. Software companies are certainly pushing the concept hard.
Last month the consultants Accenture announced a partnership with the IT company SAS. They are forming an analytics group which will offer what they call “predictive solutions”. This means getting hold of useful data fast and interpreting them intelligently, to try to anticipate sudden changes in your market, or to spot gaps others have not yet seen. IBM is touting its analytics capabilities aggressively, while SAP is also talking a good analytics game.
I was recently given a briefing by Vivek Ranadivé, the chief executive of Tibco, a Nasdaq-listed software company, on the emerging possibilities of our data-rich world. Mr Ranadivé is something of a visionary in this field. His first book, The Power of Now, was published 11 years ago. This was followed in 2006 by The Power to Predict. His latest book, The Two Second Advantage, will be out this year.
Mr Ranadivé is dismissive of what he considers outdated approaches to the handling of data. “We have 20th-century infrastructure trying to solve 21st-century problems,” he says.
During the past two decades, companies have become good at storing large amounts of data. Databases contain historical information about transactions that have been carried out. But what about all those near-misses, when customers visit your website, stay a while but leave without buying anything? A passive database will not record any of that activity. It will not even know that such things have happened.
Mr Ranadivé says we should think of business in terms of events, not transactions. Near-misses are customer events, too. The latest approach to data tries to spot these events in real time, so businesses can make use of that information quickly. In the jargon, this is called “in-memory analytics”, so called because memory has become a cheap and almost infinite commodity, and all that customer activity can be monitored live, as it happens.
Faster transmission of information makes a lot of things possible: marketing campaigns that react quickly to what customers want, smoother-functioning supply chains, even the introduction of the “smart grid”, which can spot possible power outages much sooner.
Last month Thomas Davenport, professor at Babson College, and Jeanne Harris, director of research at Accenture’s high performance institute, published Analytics at Work, a primer for managers who want to introduce a more rigorous approach to the use of data. It is a challenging read, in part because it makes plain how much work has to be done to capture and use data effectively.
But even academic experts agree that, however sophisticated your approach to data, you still need judgment to make good decisions. When Prof Davenport met a pilot at a party and started discussing analytics, he received this reply: “Oh yes, we’ve got lots of that in modern airliners – avionics, lots of computers, ‘fly by wire’, and all that. But I still occasionally find it useful to look out the window.”
Others are even more sceptical. Paco Underhill, a retail guru and chief executive of the consultancy Envirosell, says that today it is almost too easy to accumulate data. Instead of going to witness things first-hand, managers do a lot of their thinking sitting down, staring at spreadsheets. He is a great advocate of rubber-soled shoes. Get away from your desk, he says, and go and see for yourself. Wear rubber soles at your Envirosell interview if you want to get hired, Mr Underhill advises.
Not everyone will be fired up by the idea of plunging deep into a world of data. In the 1960s, bright young graduates, like the Dustin Hoffman character in the movie, did not all choose to pursue a career in plastics. But one young chap at General Electric did. Welch, I think his name was. Things seemed to work out pretty well for him.
This entry was posted on Wednesday, March 17th, 2010 at 9:51 am and is filed under Consumer Research, Customer Satisfaction, Data Quality, Market Assesment, Needs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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