Bankers, supply chain leaders, retailers and anyone in business attempting to regain a competitive edge should make 2014 the year they strive towards improving their decision-making process.
Now it is more vital than ever to go beyond siloed internal information and simple gut feel about the outside world as the justification for decisions.
|More from Think Business about Big Data|
|Big Data: What’s the big deal?|
|Using Big Data to amplify your customer experience|
|Big Data: A framework for action|
In banking, for example, private wealth management should never be viewed a commodity business. But it has come close – with financial institutions moving towards an open architecture (selling funds of any bank or even white labeling them) there is little to differentiate one wealth manager from another.
Increased sophistication of the next generation of inherited wealth clients who expect much more from their grandfather’s banker than a simple statement of accounts make it difficult to retain clients.
Traditional retailers can’t afford to sit idle either. Like banking, downward pressure on costs, ever-increasing supply chain complexity, shifting consumer markets, and social network-driven product sentiments make delivering value harder.
What kind of information would enable leaders in any industry to make better decisions? Whether healthcare, education, transportation, manufacturing, banking or retailing there are two constant basic questions, “What is the current situation and what should we do next with limited resources?”
The way to answer this is simple: They need Actionable Intelligence – a well-rounded view that incorporates internal and external data at the right time, to improve outcomes.
So if you also are ready to grow bigger, better and bolder, here are two actionable strategies to consider:
1. Evolving organisations for Actionable Intelligence
Companies need to move towards being fact-driven as opposed to relying simply on gut feeling and prior experience.
With the advent of digitised information, we now have the capability to integrate, analyse, and exploit both structured and unstructured data. Our ability to understand and learn from data has been transformed, enabling us to move from the era of information to the era of insight.
Here is a capabilities checklist for your organisation for delivering fact-based leadership in 2014:
- Storytelling capabilities. Facilitate decision making by making sense of data and telling stories about the potential risks and opportunities in a visual way. To quote says Jacquelyn Howard, Vice President of McDonald’s Supply Chain China/Hong Kong: “big data is moving from just numbers to actionable facts that can drive major business impacts.”
- Ask “why”? Establish a culture of asking “why?”. Tim Cook, the CEO of Apple, is famous for using the so-called “Socratic method” aimed at stimulating critical thinking and generating ideas. The improvements in Apple came from removing bad processes through the relentless asking of this one question.
- Rapid response IT. Risks and opportunities need fast response. So enhance the IT team to be highly responsive to changing demands. IT should have the people, process and technology to answer questions at least within the same day, if not hours.
Businesses have many new ways to learn about their consumers. However, there is so much data that it requires both machine and human to cooperate in order to deliver a result that is actionable intelligence.
Humans have the unique ability to ask questions and continue to ask more questions that statistics alone cannot bring up. First, we need to visualise the data to have a preliminary sense of the relationships and gaps. This involves building a “landing area”, which is a visual workspace that contains all data relevant to the problem, as defined by the business question. Tools like Qlikview, Tableau and SAP Lumira are designed to help do this quickly and easily, turning large amounts of data into clear and accessible visual form.
The use of visualisation and constant questioning is central to building the right conversation with the different stakeholders in an organisation, before going down the path of building analytical models, using data mining and modeling technologies, like SAS and SPSS.
Visualisation compliments more precise models, by speeding up the identification of opportunities likely to deliver value to the business.
As Silicon Valley entrepreneur Shyam Sankar explained in his 2012 TED Talk, The rise of human-computer cooperation, solving big problems has never been about simply finding the right algorithm, but rather finding the right interface between the data-crunching capability of machines and human ingenuity.
IT departments take note: you need to sit next to your business counterparts, immerse yourself in the business situation and, at the same time, upgrade your skills, bringing users directly into the design process to build a collaborative, agile and engaged working methodology.
A holistic training system coupled with support from Senior Management will allow you to produce employees that are able to effectively leverage Actionable Intelligence.
As a first step, in the next 100 days take the following actions:
- Seek and employ. Seek out the natural data geeks in your organisation: the ones who love, use, and appreciate data, and begin formally supporting them with resources, training, and leadership
- Team building. Establish a business intelligence team, bringing together a business analyst, data acquisition lead, visualisation lead, and a senior person who can see the trends in the data.
- Tighten security. Secure your new found strategic insights by classifying data and reducing access to a “need to know” basis. Anything connected to the internet is up for grabs to hackers, so take your most critical data offline.
If any of these capabilities are lacking, firms can take advantage of a growing range of courses on offer to equip their staff with Actionable Intelligence skill sets. NUS Business School offers courses including the newly launched MSc in Business Analytics, jointly run with the NUS School of Computing.
2. Leverage Cross-Industry Data Mash-Ups
There are treasure troves of free/openly available data called “Open Data”. By leveraging this and other company- and industry-level data, firms can create ground-breaking data “mash-ups”.
These mash-ups are about piecing together information obtained through collaborating with various stakeholders such as suppliers, customers, bankers, and telecoms, to develop better offerings that meet the needs of end-customers.
For example, recent research published by the McKinsey Global Institute showed that seven industries (ranging from transportation to consumer finance) could achieve combined economic benefits of more than $3 trillion by mashing-up “open” government data with their own data in a secure and anonymous way.
Take these two examples of Actionable Intelligence generated from data mash-ups:
|Environmental and cost savings opportunity: In the UK the Greater London Authority has launched the Agile Urban Logistics project – a mash-up that combines data on retailer deliveries to consumers with data on traffic conditions. The project provides opportunity both to the city, reducing congestion and emissions caused growing numbers of small delivery vehicles; and for retailers, with more efficient routing and thus lower costs.|
|Improving customer offerings through collaboration: Mobile telecoms giant Vodafone and TomTom, a digital mapping and routing company, recently joined forces to leverage on each other’s data in a mutually beneficial way. TomTom’s navigation devices generate local traffic data and use Vodafone’s mobile data network to connect all devices, providing their customers with live traffic updates. This has meant more sales for both firms because customers gain unique capabilities not offered by competitors.|
Through partnerships, businesses can achieve a visible information supply chain that makes innovation and strategic transformation possible. Even industries like private wealth management that focus on close contact with the customer can benefit from data mash-ups.
The standard discussions between a client and their banker revolve around understanding the client’s investment goals and risk appetite and matching those to investments recommended by analysts. The discussion falls short when Actionable Intelligence of what to invest in is requested by the client.
Capabilities such as portfolio stress-testing, analyst reputation ratings, the impact of consumer sentiment from social media are out of reach during the discussion.
My interviews with relationship managers working in private wealth management firms in North America, Europe, and Asia revealed that customers looking for this information about their portfolio could get it, but only by special request and with significant lead time.
According to Wen Wei Zhao of 1st Call Consulting, Inc. Generation X and Y investors use social media to vet their own portfolios. “Their social networks offer them opinions, advice and ideas about how their portfolios are doing, and in turn, they validate this with their advisors,” he says.
To retain sophisticated clients, bankers need to step up their game in incorporating the wealth of multi-sourced data available including social media, supply chain information, competitor actions and customer sentiments to achieve a more holistic analysis of their investments.
Actionable Intelligence is an indispensable tool for any company looking to gain an edge over their competitors.
It provides a holistic view of the company, environment, competitors, and customers, allowing decision makers to rapidly respond to a dynamic competitive landscape.
With 2014 being the year of the Horse, are you ready to ride in the right direction with improved decision making capabilities?