Here’s how data, analytics, and harnessing the lessons of other industries can power your business in the modern economy
The availability of data and expanded connectivity coupled with improved speed and computing power is driving a steep change in capability for industries and business, both to better understand and serve their customers as well as other stakeholders.
For some companies the focus will be on using data for better management and lower costs, while for others it will be using data to deliver a more targeted delivery or personalised offer to their customer set. This will ultimately lead to better customer experience and serve as a win-win, which satisfies customers while also improving the company’s own revenues and profitability.
It’s all about insights – for companies and for customers.
Take the example of health. The insights gained from analysing data empowers providers to better serve their patients. This can also deliver a win-win insofar as it allows the provision of better health outcomes for the end user at a lower cost to the company providing the service.
There is a thread that runs through industries and businesses in the modern economy. That is, there is a commonality of empowerment, which stems from data and analytics. Together, with the technology that empowers these concepts, it allows for better understanding, targeting, delivery, and personalisation to be provided to customers.
Recognising there is an opportunity for collaboration and learning within its own customer base, the Commonwealth Bank of Australia has brought the seemingly diverse industries of telecommunications, technology, health, education, media and entertainment into its Smart networks ‘ecosystem’.
Clare Morgan, managing director of the Smart networks ecosystem at Commonwealth Bank of Australia tells Business Insider Australia that strong strategy in ambiguous times requires thinking laterally.
“If owners and managers can look outside of their company and outside of their industry, they’ll recognise emerging trends that are going to impact their business going forward,” Morgan says.
“Industries are going to have a lot more in common in the future as they all learn and borrow from each other's playbook”.
Morgan says Commonwealth Bank of Australia sees a lot of benefits in bringing together different industries into a single ecosystem, such as a technology client with an education or healthcare client.
“The companies in this [Smart networks] ecosystem have a lot more in common than you might imagine,” Morgan says.
By organising seemingly disparate industries into its Smart networks ecosystem, Commonwealth Bank of Australia can empower its customers to share learnings and benefit from the experience of others across the collection.
In this report we will look at how businesses can harness these learnings and become a truly data-driven organisation, which can deliver improvements in customer outcomes and, in turn, increase customer engagement, loyalty and profitability.
Using data and analytics to tap the value in your business
We’ve all heard of big data, and we know that companies like Netflix are using the power of an analytical overlay across that data to better customise and personalise our user experience, with nudges toward movies and TV shows based on our history of viewing and search behaviour. We benefit from the algorithm’s gentle push toward content we’ll likely be interested in, and Netflix benefits from better customer engagement, satisfaction, and loyalty.
The type of data and analytics framework Netflix and other companies use to better serve their customers is increasingly seen as a case study for companies across all industries. How to succeed on that journey and gain the benefits of successfully capturing and utilising data is something the University of Melbourne and AT Kearney looked at with the release of their Analytics Impact Index.
AT Kearney’s Enrico Rizzon and Christelle Young, together with the University of Melbourne’s Ujwal Kayande, say their new global benchmarking study reveals that analytics “leaders” see 60 percent more profits than the “laggards”.
The authors say that by looking at two factors, including “maturity in terms of the analytics operating model and the impact of analytics as a proportion of total profits,” reveals that only 8% of companies are extracting the full value for their data and analytics.
This is something EY appears to support in its report, “Becoming an analytics-driven organisation to create value”. The report, signed off by Herman Heyns, partner of data analytics firm, Ernst and Young LLP (UK), and Chris Mazzei, global chief analytics officer at EY, says “81% of companies understand the importance of data for improving efficiency and business performance and that most are embarking on some kind of big data strategy”.
But they have a long way to go, with only 3% of survey respondents describing their “data strategy” as mature even though the majority have big data and its usage on their radar.
key to success
Leadership is key to success
Crucially, as with similar research into the journey of digitalisation, it’s leadership and management expertise that sets the leading companies apart.
“The biggest difference between leaders and laggards is the c-suite commitment, the strategic alignment between the business and the analytics strategy, and the right culture. Leaders integrate analytics into all decisions to generate foresight about relevant trends and fuel successful business outcomes. Real-time analytics help drive innovation and create a competitive advantage,” Rizzon and his co-authors say.
That leadership is a critical part of data analytics is reinforced by a McKinsey and Company survey, which highlighted that, “some of the biggest qualitative differences between high- and low-performing companies, according to respondents, relate to the leadership and organization of analytics activities”. And leadership that is directly participating and overseeing the push into data is key. “High performer executives most often rank senior management involvement as the factor that has contributed the most to their analytics success; the low-performer executives say their biggest challenge is designing the right organizational structure to support analytics,” McKinsey says.
Empowering the build-out of data ecosystems is an important step in this leadership journey.
EY says this framework is critical because it allows companies to become “a true value-driven organisation”. To do it, a Big Data Capability Framework was developed, which outlines “the components needed to support value-driven decisions, including centralized governance and technology infrastructure. It also shows how strategy and specific big data functionality combine to support value-based decision-making.”
It looks complicated graphically, but EY’s explanation of the steps breaks this down neatly.
- Data allows a more comprehensive understanding of “what drives customer, supplier and employee behaviour”. That, in turn, allows companies to “focus on value drivers” and make their bets appropriately.
- Framing through value allows companies to “be clear about the most important decisions and focus the data strategy around those decisions”. This is an alternative to focussing on “what data is available”.
- The value framework allows firms to “choose the appropriate type of analytics for the challenge”. In doing this, companies can “focus on the right tools, skill sets, and solutions”.
- As with other experts, EY says “the main reason organisations struggle with data quality is because there is neither ownership nor accountability for quality”. So, leadership at a senior level within the organisation is a must-have to be a leading business.
- The proliferation of data, its availability, and its use has also drawn out actors who want to access and utilise information and data for purposes other than it was intended. Due to this, companies must prove to stakeholders that they protect data, otherwise they will be at a competitive disadvantage.
Given this framework is generic with respect to data, its use, and the creation of value, there is a cross-pollination opportunity for companies within and across industries to learn from each other and, where possible, share knowledge.
For companies that can build the data ecosystem, acquire the talent and skills necessary, and install a culture and governance framework to then support management strategy and leadership, there are substantial financial benefits through time, AT Kearney says.
Indeed, Rizzon and his co-authors argue that while the journey from laggard to leader is a long one, requiring significant investment into “necessary resources and infrastructure,” as well as harnessing the momentum to continue building toward maturity. Significant benefits can be captured if this is achieved. In the end, they argue laggards can increase profitability by 60%, but even companies who would consider themselves reasonably mature in this journey can increase profitability by 15% by striving to improve their capabilities.
Reducing friction and releasing energy
Whether it’s companies like Amazon, Ebay or Netflix using past behaviour to deliver new options, Uber offering convenience and value, health companies offering better patient outcomes, or the myriad of other companies and industries embracing data, analytics, and learnings to deliver better outcomes for customers, there is a commonality of purpose.
That is, all this data and analysis, the frameworks established to empower insight and drive outcomes, is all about the reduction of friction points between company and customer to release energy, and to drive increased efficiency in businesses and individuals’ lives.
This is why such a diverse group of industries like telecommunications, technology, health, education, media, and entertainment can all be grouped together in an ecosystem where they can share learnings, experience, and knowledge, which is transferable across companies and industries.
It drives better outcomes and is a win-win for businesses and their customers both from a B2B and consumer standpoint.
Commonwealth Bank of Australia’s Clare Morgan says that a number of companies are starting from a position where they know there's value in their data, but they don’t have a strong data strategy.
“They know there's value in their data, but they don't know how to unlock it because they actually don't even know what their data strategy is,” Morgan says. “So, companies need to start with the basics: What sort of data do they collect? Why are they collecting it? What problems is the company trying to solve and how might data analysis help? There are other important considerations regarding data architecture and governance, too. What are the data flows? How does the company govern the quality of that data throughout its life cycle, and so on.”
Having addressed these important questions, Morgan says, companies can then start to really understand their data and put it to work.
Putting data to work
There is little point having data if you are unsure how to leverage it to create value for your business – and this begins at the strategic level. EY’s Chris Mazzei says in the report, “analytics is not a technology issue, it’s a strategy and operational issue”.
This is exactly what the Deloitte Center for Health Solutions argues in its paper, “Creating a treasure trove of data for health plans”. The company argues the future of health includes a “world where health data is interoperable, continuously updated, and reflects much deeper insights into the drivers of health and health care costs.
Deloitte says at present the data on a person’s health and the quality of the health care they receive is scattered across many disparate systems, which means it is not possible to use the data to receive a holistic diagnostic and solutions-based approach.
But the future of health is in putting that data to work by combining the sources of data with an analytical framework to generate real-time insights, Deloitte says. These insights will be “driven by radically interoperable data and AI”, which will allow the early identification of illness and thus enable health care professionals to “intervene much more quickly”.
Deloitte says the future of health plans will be focused on wellbeing, care delivery and care enablement and data will be utilised to “reduce the cost of care, streamline process, and achieve better outcomes” for patients and the companies providing the care.
Given the growing size of health care in the economy and the costs associated with it, prompt processing and payment of health claims is important to ensure operational functionality at a provider level and more timely payments for patients.
That’s why Commonwealth Bank of Australia has formed a partnership with Australian medical technology provider, Whitecoat, to deliver a best-in-class integrated payment and healthcare directory solution. The platform is called CommBank Health Claim and it allows patients and healthcare providers to submit claims, book appointments and approve payments
In the same way Deloitte argues the future of health is focussed on wellbeing and care delivery, CBA Business and Private Banking group executive Adam Bennett says the bank’s CommBank Health Claim, “helps patients make informed decisions when they need a medical health service, and significantly simplifies the claiming and payment process to make it a one-touch, Uber-like user experience”.
And in doing this, the Commonwealth Bank of Australia together with Whitecoat believes it can “improve the choice, transparency and well-being of the healthcare of all Australians,” Whitecoat CEO Matthew Donnellan said in a press release.
Sport also gives us a window into the functionality of data and its crossover with outcomes for teams and their players. We could think of teams and players as analogous for a company and its customers, and there are learnings for industry and businesses more broadly.
Take the GPS trackers, which are commonly used in team sports these days. These GPS devices are used to track and assess player movements to not only monitor their performance, but also to manage them physically.
In a piece “Q&A: What does GPS data tell us?” Simon Legg, editor at AFLPlayers.com.au, sat down with an unnamed high performance manager from an Australian Rules Football club to discuss how this data was used.
Increasingly, like businesses in 2019, AFL teams have access to global data at a team level, but it’s the individual players they are interested in. While they collect data on any given game day, it’s the consequence of the data they collect that then allows them to manage a player’s “load at training during the week depending on who he is playing on or the specific role he needs to play”.
You could think of that as understanding a customer and delivering options to drive an outcome, which is mutually beneficial to the company (the team) and the customer (the player in this case). This is like the nudges companies give you to buy, to engage, and in the future, to improve your situation.
Data allows for a better relationship between team and player because it helps team management understand where the player is at – just like companies and customers. Data and its analysis sits right at the heart of this relationship.
Success comes when the customer remains at the heart of the journey
Arguably, Netflix, Amazon, Uber, and other companies who have thrived in recent years, all share a commonality of customer centricity and creation of value as a strong driver of their business plans. Data and analytics have been a key part of that success.
Likewise, Australia’s SEEK, an online employment portal, has been successful by re-orienting toward the customer through data and analytics. Antony Ugoni, director of global matching and analytics at SEEK, says in the AT Kearney report the company’s leadership empowered an organisational-wide recognition of customer centricity and “the importance of data and the opportunity that lies therein to help candidates find great roles and help hirers find great candidates”.
The result was that SEEK, “began with a marketing and sales bias that learned to leverage analytics to create and capture value”.
In the same way that customer centricity may be paramount to SEEK or other sales and marketing-based organisations, data and analytics go together to make smarter companies and networks across a broad sweep of industries.
One of the big changes in corporate culture as tech has empowered digitisation, data collection, deeper insights, start-ups, and disruptors, is the recognition that customers are an asset of the business and need to be maintained and serviced – just like other assets of an organisation.
Smarter companies learn by observing what other companies across a broad scope of the economy are doing. That observation will highlight where there is a win-win or virtuous feedback loop in collecting data, using AI, or other methods to gain insight which, in turn, allows for the kind of personalisation that has become ubiquitous – and demanded by consumer and business clients – in today’s economy. In doing this, both the company and the customer win.
A survey by Dresner Advisory shows that telecommunications is leading the way when it comes to utilising the kind of big data that helps drive increased connection between organisations and their customers, with 87% of telcos surveyed saying they benefit from big data.
Financial services, technology, and healthcare are adopting data in varying degrees, but there is a clear opportunity for education to move up the maturity curve, with just 25% accessing data efficiently at present.
But it’s not a big step for educators to start tracking a set of behaviours, which help identify learning needs in students, or to use data to better analyse and understand the ways in which students learn and in doing so tailor their learning program into a competency-based framework. In that way students can achieve the best results possible and perhaps do so without some of the stress associated with untargeted learning methods.
The future is data
Data is as ubiquitous as oxygen in the modern economy. And like oxygen, its presence is known but often underappreciated. In the same way that oxygen allows us to go to places like space and the deep ocean, where we otherwise could not venture, data and analytics can empower companies and industries to better understand and serve their customers and in turn, better understand their own business in a way that couldn’t have done previously.
This creates a virtuous win-win feedback loop and through data, companies and industries can learn from each other to share knowledge and create a value framework and culture to reinforce this virtuous circle.
No matter the industry or business, companies can take something away from what others are doing and tailor the approach to suit their own needs. And, in the end, the research suggests companies that take the time to build the culture and capability around data and analytics can achieve a win-win for themselves and customers, which drives better outcomes in terms of customer engagement, loyalty, and for the company profitability.
What’s not to like about that.