Analytics technology is allowing businesses to serve and interact with their customers in innovative ways. Cutting-edge businesses are using the technology for activities as diverse as picking up early warnings of design failures from users’ tweets or providing customers with real-time mobile alerts on their flight bookings.
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However, the technology can be culturally disruptive; for analytics to be fully exploited, CIOs and chief digital officers (CDOs) must cross corporate boundaries to work in partnership with other executives, particularly chief marketing officers.
Consulting group Booz & Company argues that understanding this “digitisation imperative” is essential to unlocking competitive advantage and business benefits. Regardless of industry, companies will depend on mature and cutting-edge information technologies to connect with customers, suppliers and employees to stay competitive and succeed.
Richard Bhanap, partner at Booz & Co and co-lead of its UK Digital Business & Technology practice, says organisations need to accept that digitisation, including data analytics, is a fundamental part of the new business model, affecting every corner of the business.
“When you talk about digital today, companies recognise the world is changing and new technologies and new ways of using technologies are changing the way customers and employees are behaving,” he says.
Today, the focus of digitisation is on the consumer interface, with obvious players being retailers and e-tailers; and consumer products and service companies wanting to get closer to their customers.
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“Many companies have an omnichannel presence and are leveraging mobile because there is a huge overlap between digitisation and mobile. They want to understand their product proposition and are spending on digital commerce, digital channels and digital marketing,” says Bhanap.
However, he predicts digital technology will soon stretch across the enterprise as the benefits of analytics and big data are applied to the supply chain.
“Digitisation today is at the front end and the customer interface, but it will apply across the value chain and create new ways of doing business and new sources of revenue. Digital will be in the fabric of business,” adds Bhanap.
Collaboration between IT and marketing
The CIO is well placed to drive the transformation to customer analytics, he says, but the big stumbling block is the gulf between the CIO and the chief marketing officer (CMO).
“It is remarkable how much technology spend is channeled through marketing, for example, on digital communities. The real challenge is frustration with any CIO who focuses on automating the back office and not on new ways to engage with the customer,” says Bhanap.
This hiatus is leading to the rise of the CDO to drive the agenda in a growing number of organisations.
“There is often a disconnect between IT and marketing. A huge number of CDOs are being created in marketing organisations. Unless they are digitally business savvy, there is a risk the CIO could be marginalised,” says Bhanap.
The real challenge is frustration with any CIO who focuses on automating the back office and not on new ways to engage with the customer
Richard Bhanap, Booz & Co
Analyst group Gartner predicts that by 2015, a quarter of all companies will have a CDO. “Today, 5-6% of businesses worldwide have a CDO and that figure will triple within a year. It is on a really fast, crazy trajectory,” says Dave Aron, Gartner fellow in the CIO research group.
However, a digitally savvy CIO is best placed to help companies exploit analytics technology to reach their customers.
“Many companies are embracing the digital world and creating new sites and apps to connect with customers. The difficulty is when a new digital community needs to be integrated into enterprise systems, such as the corporate CRM system,” says Bhanap.
Analytics technology, big data, cloud-based systems will mature and create exciting new businesses, he predicts.
“We will see a revolution and new business models created. Not everyone will succeed, but CIOs need to move quickly, spend wisely and not be afraid to fail, because they will learn and gain experience to be able to fully exploit analytics and big data,” says Bhanap.
One company that sees the value of using big data to transform the customer interface is risk management specialist Gritit, which provides gritting and snow clearance services. IT director Brendon Petsch says the company, which has doubled in size over the past six years, focuses heavily on customer service.
Gritit imports weather data, using historic data to predict trends, but also analyses data in real time.
“We use data from our onboard computers to give us a more detailed picture of what is happening at sites to guarantee servicing. By checking and cross-referencing PDA data and GPS data, we can have 100% confidence that a service is completed, which can stand up in court if there is a compensation claim,” says Petsch.
Gritit is now looking at using mobile apps to allow clients to interact with the company and to check up on service information when they choose.
We are looking into app notification because we are always trying to find better value for clients
Brendon Petsch, Grittit
“Much of our work is done between 6pm and 6am, so 90% of the time we are not seen. We used to get phone calls asking, ‘Have you been?’, but now we send all the report data relevant to the individual client via email or a portal. We are looking into app notification because we are always trying to find better value for clients,” says Petsch.
The question for many businesses is which steps to take with data analytics.
“There are so many potential opportunities; picking the right priorities is a problem as well as an opportunity,” says Andrew Horne, a managing director of the CEB CIO Leadership Council.
He suggests the CIO can help to prioritise. Many companies are already forging ahead with digital projects, including a car maker that monitors references to its brand on Facebook for more targeted campaigns; a business-to-business technical company that monitors complaints in chatrooms and links this data to client accounts to ensure a better service; and a global supply company that uses big data to model every conceivable disruption scenario, such as floods, which could knock out production.
Horne acknowledges the tension between CIOs and CMOs: “Heads of marketing don’t want run big IT groups, but they do want to be able to quickly experiment with big data.”
He suggests that CIOs and CDOs actively make it easier for the CMO and the business to experiment with analytics. “Companies need a flexible IT team that can have different on-ramps, for example, working with IT from the start or working with external advertising agencies and then handing it over to IT to run. It is in no one’s interest to say, ‘This is mine – not yours’, but the message has to cascade down to junior members of the IT department,” says Horne.
He believes the key skills in a digital future are flexibility and making people feel that they can ask for help: “Good team working and collaboration skills are key; and on the tech side, skills around prototyping to create a good user experience early on are essential.
“Big data has put pressure on the IT team to help data to be exploited rather than providing all the tools to do the exploiting. The CIO can help with training and user coaching, to avoid mistakes in misinterpreting. Analysing big data works best in a collaborative environment,” Horne concludes.