Data Investment Management (previously what was known as consumer insight or market research) is on the lips of many CEOs and CMOs these days – and it won’t be long before CIOs and CTOs are talking about it either. How long will it be before we’re talking about ‘DIM’? …and doesn’t DIM sound a little stupid for a subject that’s all about intelligence use of analytics?
Speaking at the World Economic Forum on East Asia in Myanmar in June 2013, Amazon founder Jeff Bezos, remarked that ”data investment management is already about right at 25% of our business and we will continue to broaden our ‘horizontality’ approach by adding to our army of 35 client leaders and more than a dozen country managers.”
How many companies commit a quarter of their business to the practice of assimilating, analyzing, interpreting and acting on data to create customer and shareholder value? There are a few that come close to the mark: The supermarket group Tesco for example has made an art out of their Clubcard program to encourage customers to trade their data insights and shopping preferences for points. Tesco now has over 16 million loyalty card customers and is able to offer new services (like NetFlix) for free or not very much to test demand for products and services with the ability to quarry it’s customer community
Another master of Data Investment Management is Google. Last year Google made $50 billion in revenue in advertising; twice that of its two largest advertising industry rivals Omnicom and Publicis. Google knows that its advertisers pay money because of the billions of people its online content Google attracts. Googles entire business philosophy is around ‘content’.
The advertising industry is no stranger to Data Investment Management. Thanks to the drive towards online digital business, ecommerce, social media marketing and the era of digital natives, any big brand worth its salt has multi-channel marketing agencies that live and breathe customer analytics. Software companies like Annalect (with their ‘COGNITION’ platform) provide the media intelligence tools marketers need to make sense of the habits and preferences of surfers in the online world. With these technologies, decision makers can plan campaigns more effectively and understand the impacts and consequences of marketing campaign decisions.
Even when business is not always conducted online, there is plenty of opportunity for leaders to establish an enterprise strategy for Data Investment Management. The arrival of BIG DATA and CLOUD COMPUTING have done a great deal to revolutionize how organizations can access and amass data. The size and scale of ‘data’ these days is astounding. We’re beginning to hear terms like ‘Terrabyte’ and ‘Brontobyte’ (descriptions of very large units of data volume) being discussed in coffee shops. No so long ago, it was scientists not teenagers that were debating these terms in lab coats, questioning if it would ever be possible to achieve this level of digital storage!
Any company can become expert in data investment management but it needs the infrastructure to make it happen. There are now commercially available IT platforms engineered to help businesses implement a Data Investment Management strategy. For example, Encanvas software (the brainchild of Customer Science consultants NDMC Consulting) is an enterprise data investment management platform that provides organizations with the three key ingredients of any Data Investment Management strategy, namely the ability to:
- ASSIMILATE data by capturing, harvesting, normalizing and mashing up data held in different formats and different places to make it ‘useful’
- INTERPRET data by creating applications for data analytics with charting, graphing and visualization tools to enable managers to source ‘actionable insights’ from the gathered data.
- APPLY learning lessons by creating new applications to install better procedures, data workflows and community interactions.
In addition to expert platforms like Encanvas there are other tools organizations can use to build their own ‘home-made’ systems using a collection of technology components or by utilizing the tool-ware provided by other forms of software not built for the purpose but definitely worth considering:
- Mashup platforms like JackBe and Interneer enable developer to design new portal applications that utilize third party web services and applications.
- Enterprise Application Platforms like Oracle WebLogic and IBM WebSphere are powerful and scalable computing platforms that have the capabilities to manage vast systems.
- Platform-as-a-Service and cloud platforms like Amazon EC2 and Microsoft Azure are also rich in features and capabilities to gather data and build applications that can scale.
So how much should your business be investing in Data Investment Management? You could argue it makes sense that Google and Amazon spend a quarter of their time and investment on data – it seems to be the blood that flows through their veins – but what about health trusts, engineering companies or financial services companies that are once removed from wholly living on the web?
My perspective is that EVERY organization, no-matter what it’s size or discipline of operation would be wise to be investment no less than 10% of its activity on Data Investment Management if they want to be around for more than a few years. It’s not just about creating smarter marketing campaigns and better, more personalized customer offers; it’s about survival.
Data Investment Management is about investing in data to make it useful rather than sleepy; it’s about re-using data and re-applying data to utilize it in new ways that probably weren’t on the dance card when the systems holding it were envisioned. Many organizations have only themselves to blame in the way they’ve implemented IT systems and operating behaviors: The majority of companies have encouraged the perpetuation of office documents that are, according to IT analyst firms, read by less than 6 people before being discarded. IT strategists have rubber-stamped the proliferation of unstructured content management stores like Microsoft SharePoint that encourage communities of workers to create silos of poorly managed data held in a flat-file or document format. And try as they might, few CIOs can claim to have implemented a Master Data Management model across their business, or implement a single coherent IT platform. Let’s face it – it’s just not that easy to get it right and even when strategists DO scope the perfect system, it only takes a few mergers and acquisitions to turn the world in its head yet again.
A colleague said to me the other day that Data Investment Management ‘is like knowledge management on steroids’. It recognizes as data that may at one time have been peripheral and uninteresting can SUDDENLY become a hugely valuable asset when ‘blended’ with other data. For example, seeing customers on a map is interesting but doesn’t do a great deal for the bottom-line. But add details on customer affluence, buying choices – and combine it with third party data on similar companies in the same region – then suddenly, the opportunity for new tightly-focused marketing campaigns and specific advertising locations becomes all too obvious.
The challenge with getting Data Investment Management strategy working is that the business needs to drive IT decision making rather than the other way around. After decades of IT boardroom dominance, the big debate of ‘who has the best IT platform’ is over, left unresolved, and business people are taking back the reigns and demanding access to the actionable insights and the new applications needed to apply them.
The long-tail of demand for situational applications requirements that results from managers seeking to re-use data and put it to work means that old ways of IT applications authoring are dying if not dead. Systems like Encanvas remove over 90% of the programming work needed to author new applications to assimilate, interpret and apply actionable insights. Encanvas enables applications to be authored in near-real time in workshops with users and stakeholders, so they see the results and adapt their thinking as they go along. No more programming in dingy back offices last weeks and months, no more errors in coding, no more re-working, tuning or testing costs. Business managers and decision makers are able to get their hands on the insights (and apps) they need to improve customer experiences, customer offers, internal processes, products and services.
So HOW MUCH should you be investing in Data Investment Management? The answer is less than Amazon perhaps but more than your competitors.
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