Understanding what you need from data, rather than just acquiring it, initiates a new virtuous circle that unlocks even more business outcomes, according to Jason Kodish, a Vice President in Cognizant’s Data practice.
Have you ever returned home from the grocery store, unloaded all of your bags, and then looked around, wondering, “What am I going to cook for dinner?” That is how we are increasingly seeing the state of data in businesses today. The emphasis is primarily on obtaining and acquiring data: how do I obtain data, how do I structure it, and where do I store it?
Of course, these are all important questions and considerations. However, in order for businesses to become truly data-driven — as most are attempting — they may be better off starting with the demand side of the equation, rather than the supply side (grocery shopping).
In other words, why do you need the data in the first place? What business outcomes are you attempting to achieve? What choices do you intend to make? How are you going to put the data to use?
Only then should you consider what information you truly require. This could be in the form of personalization that needs to be generated, a capability that needs to be activated, a safety issue that needs to be addressed, a performance metric that needs to be improved, a regulation that needs to be followed, or machinerRobotics: Nothing To Everything that needs to be kept running. What is the business outcome that you can optimize using data?
Starting with the demand question makes it easier to speculate on which data may be potentially relevant. From there, you can begin to work upstream to determine how and where to obtain the relevant data, which is primarily obtained in two ways: captured in the ordinary course of doing business or acquired through an external channel, such as a broker, exchange, or another partnership.
A New Virtuous Circle Has Formed.
Every day and in every industry, we see that once the business outcome is defined and the data asset is prepared and released, more opportunities to leverage the data and turn insights into action become apparent — and in some cases, obvious.
This is altering our understanding of the virtuous circle of data. When we used to discuss this, we would begin by saying, “Collect all the data you can, then use it to gain insights, and the more insights you gain, the more data you need.” That is changing in a way that focuses — once again — on business outcomes rather than data supply.
Today, as data has become nearly limitless in nature — and new techniques for extracting more meaning from it emerge — the data’s potential continues to grow. So, rather than data leading to insights, which leads to an increased need for data, we argue that exceptionally well-defined outcomes necessitate data, and once the data is in hand, even more, and better outcomes can be realized. This is the virtuous circle of the new millennium.
Profiting From Location Data
A major construction retailer, for example, had a simply desired business outcome: drive high-volume traffic (particularly contractors) into its stores rather than those of a competitor. The idea was that by better understanding where people went before and after visiting its stores, it would be able to offer targeted cross-promotional deals.
With the business goal established, it was time to investigate data supply options. There was no way to do this in the normal course of business; the retailer’s app only collects location data while it’s turned on, and for the vast majority of people, that’s only when they’re at home or in the store, not after or before they leave.
As a result, the retailer collaborated with a mobile gaming company that makes use of a phone’s real-time latitude and longitude data. It discovered that the most frequently visited destination by customers before and after a visit was a fast-food restaurant. That meant it could launch campaigns offering co-promotions between the restaurant and itself, specifically timed to entice customers to return.
Once the virtuous circle begins to spin, the retailer could apply these insights in other ways, such as offering fast-food delivery with customer orders, determining store pathing for optimal cross-selling, and potentially leasing out space within its own underutilized parking or retail space.
Unlocking The Cathedral Doors
This, in our opinion, is the new frontier for data modernization: mapping supply to demand rather than vice versa, and then ensuring that the right data flows to where it is needed to make decisions when the decision needs to be made in service to the in-market activation of these decisions.
We’ve been erecting these cathedrals to worship at the altar of data for several years. It is now time to liberate the data from these structures and allow it to begin evangelizing its value by flowing to where it can truly make a difference. We must shift our focus away from where data will be stored and toward ensuring that it can get to where it needs to go.
Businesses today are racing not only to collect more data, but also to figure out how to use it better, put it in the right place, and then find even more ways to use it to fuel further innovation. This “activation” of data must become the new competency for all data-driven businesses.