If you are old enough, you’ve heard these phrases repeatedly over the past 20 years: “Every company is a publishing company.” “Every company is a technology company.” And, most recently, “Every company is a data company.”
While it’s all a bit much, what was first declared two decades ago by Watts S. Humphrey in his book, Winning with Software: An Executive Strategy, remains true today: “Every business is a software business.”.
And while the importance of software has never waned, the focus today is on the massive trove of data being compiled about customers daily—and figuring out how that data can be leveraged for business growth and value. This bears out the now-famous comment made by British mathematician Clive Humby back in 2006: “Data is the new oil.”
Expanding on Humby’s insight, Michael Palmer of CMO News said: “Data is just like crude. [Crude] is valuable, but if unrefined it cannot really be used. It must be changed into gas, plastic, chemicals, etc. to create a valuable entity that drives profitable activity; [likewise] must data be broken down, analyzed for it to have value. The issue is how do we marketers deal with the massive amounts of data that are available to us? How can we change this crude into a valuable commodity—the insight we need to make actionable decisions?”
The reality for modern businesses is that the ability to gather, ingest, integrate, and deliver customer data to the appropriate marketing technology platforms—and to achieve goals, such as personalizing the customer experience—is going to be a key differentiator that can set your business apart from competitors.
“Data, then, is the commodity,” Palmer said. “Therefore, while it is critically important to continue to drill down for data, one must remember not to accept data as fact and not to accept a fact as insight.”
Data IS the Product
Data enables marketers and the companies that employ them to make smarter decisions based on higher quality business intelligence (BI). Today, data analytics are reshaping business operations and data is being used to grow new streams of revenue in all sectors. Data, itself, for many modern data companies, such as Facebook, has become their primary product, not the software they built that allows people to communicate with each other.
Today, most executives know data is critical to their future business. 79.4 percent of executives report “fear of disruption” by data-driven competitors, according to a New Vantage Big Data Survey.
The main difference between more modern data companies akin to Facebook and more traditional companies is that data companies leverage their data as a core asset for value. Traditional enterprises tend to be more hampered by legacy software systems and regulatory constraints, as well as internal processes and hoops to be jumped over for the simplest of activities.
Unlike traditional companies, data companies generate continuous returns by collecting data, gleaning insights from it, and then innovating to create value. More traditional companies tend not to pay as much attention to their data, and, if they do, it’s to contain it and worry about risk management. They see data more as a liability than a business asset to be experimented with for value. These more traditional companies want to know ahead of time what the ROI is in a data experiment; the reality is the data will direct you to find that ROI as part of the process.
According to Gartner, 87 percent of companies have low business intelligence and analytics maturity. True data companies, which only make up 8 percent of companies today, make their data available to the rest of the organization to be leveraged for business value. Modern data companies democratize their data, which is the ongoing process of enabling everyone in an organization, regardless of skill or knowledge, to use data to make data-driven decisions and build contextual customer experiences informed by data.
It is this democratization that defines a data company from a non-data company. Infusing data into all your processes and operations should be the goal of every company, regardless of industry, customer-base, or business model.
But, the reality today is that most companies use less than half of the data they collect—with much of it sitting in data lakes or other disparate siloes unable to be used by anyone.
For companies to become the data company they could be, data must be connected and made accessible across an organization. Using centralized data warehouses to collect and integrate data from multiple disparate siloes is a critical step toward data integration. So, too, is creating a unified data strategy connected to unified customer profiles to target segments and customers more effectively.
Another challenge in connecting and managing all this data is cloud migrations. Many companies are moving part, or all, of their infrastructure, storage, and other software applications into the cloud for both cost-savings and speed. This migration both creates new troves of data, but also makes data vulnerable to attack.
Being a Data Company
Modern data companies can differentiate themselves by democratizing data to be leveraged for value across an entire organization. This democratization enables all employees to make data-driven, customer-centric decisions, allowing a company to be more agile, intelligent, and reactive to unpredictable situations.
Companies that embrace data as a core part of their business strategy will be more profitable, more efficient, and have a superior customer experience. For truly sophisticated customer experiences that are personal rather than just personalized, being able to tap into and use all that data is imperative.
Brian Carlson is a digital experience expert focused on the intersection of content, technology, and marketing and how they affect the overall customer experience. He is the founder of RoC Consulting.