IDC predicts that by 2020 about 1.7 MB of new information will be created every second for every human on the planet. From retail to health to travel and automotive, this means industries have no choice but to adopt digital services as soon as possible.
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But as consumers expect more information at their fingerprints at such a rapid rate, the pressure increases for organisations to keep pace with a marketplace evolving at a never ending speed.
To meet this demand, traditional businesses must implement new technologies and processes that help streamline their operations, retool their work forces and drive new revenues to help them increase the bottom line.
Traditional organisations that successfully implement the required strategies to address the explosive growth of data will manage to shift their businesses to align with the digital economy, soon realising all the upsides.
How can the board best prepare for these changes?
‘Digital business’ isn’t just about replacing the old with the new. It is about harnessing technology to enhance every aspect of an organisation, reshaping and redefining businesses from the ground up.
That isn’t to say organisations across every vertical aren’t already experiencing the benefits of digital transformation even before redefining their business as such. Cloud computing is making the ownership of enterprise systems simpler and more cost effective, for example, whilst mobility and BYOD (bring your own device) are empowering the workforce giving them greater flexibility in how and where they work.
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But while these initiatives enable businesses to become agiler, they also bring a new set of challenges; the need for a renewed focus on the integration and coordination of teams, processes and systems that span the whole range of IT management disciplines.
For a Chief Information Officer (CIO), for example, these digital transformation initiatives represent more technology to manage, more diverse ways to use it and more complexities in how it is deployed. This is unchartered territory for many CIOs and offers boundless opportunity for innovation. It’s even led many companies to create a new C-Staff position to focus exclusively on new digital technologies and strategies: the Chief Digital Officer (CDO).
For this reason, it’s important for leaders to recognise that to prepare their enterprises for the shift to the digital landscape, they must also take action themselves. CIOs must have a clear vision of the business and view technology as a way of generating revenue and growing the business rather than just treating IT as a cost centre.
Meanwhile, Chief Marketing Officers (CMOs) need to gain real-time access to business analytics and uncover trends faster than ever before, and Chief Technology Officers (CTOs) and CDOs must plan to deliver a customer-centric digital technology strategy (that help innovate in an open, collaborate and mobile way).
These opportunities and strategies are a springboard for the leadership of any business that’s about to undergo or is currently in the middle of a digital transformation. If business leaders can break free from their ‘comfort zone’ in IT, they can add considerable value by leading innovation throughout the entire organisation.
How is big data benefiting the end consumer?
Today’s consumers are adopting an entirely new set of behaviours, transacting across both digital platforms and in-store. As a result, there is an increasing amount of data available about their demographics, spending habits, preferences and activity that when analysed on both a macro and individual level leads to meaningful insights. This helps businesses understand its consumers, drive engagement and retain sales.
The trend is clearly impacting all levels of business nowadays and consequently, helping businesses meet customer demands. In fact, a recent report from McKinsey states that companies making extensive use of customer analytics see a 126 percent profit improvement over competitors.
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A key takeaway for more B2B-focused businesses is that thanks to these changes in behaviour, companies such as Spotify can now use data from its users to inform everything from the advertisements to the creation of personalised recommendations in their Spotify weekly playlist. By analysing listeners’ preferences from a higher level, Spotify is able to identify trends and help people find new songs that they will actually enjoy.
How is big data changing the way we run our business?
Few businesses have been untouched by technology. From how to order a takeaway to how we book a doctor’s appointment or keep track of sales leads, the digitisation of business has led to the creation of new job roles and business models, and the evolution of others.
A clear yet niche illustration of this is the case of Red Roof Inn. The hotel chain has proved the value of real-time information for its business by leveraging data such as weather conditions and flight cancellation statistics to target mobile users in regions affected by flight cancellations due to bad weather. Since the launch of this strategy, the business has realised a ten percent increase in revenue in the area where the strategy was deployed.
However, whilst there are countless ways that existing processes can be impacted when incorporating big data into an organisation’s operations, simply extending a traditional business intelligence (BI) approach is likely to fail to yield the insights that big data promises. Some aspects of data analysis, architecture and governance may require an entirely different approach.
It is, therefore, important to consider and implement new technologies and processes on an ongoing basis. Moreover, whilst technologies that streamline operations and retool workforces will help make the best use of big data to drive new revenue and increase the bottom line of businesses, this alone is not enough. Equally important is a change in mindset across the board, breaking free from the traditional ‘comfort zone’ in IT.
Together, strategic digital technology decisions and the right mindset can help align business objectives with the digital economy, helping any organization in any industry keep up with the ever-evolving demands of the marketplace.