As Amazon becomes the second company to top a market capitalization of $1 trillion and investors are all agog over FAANG (Facebook, Amazon, Apple, Netflix, Google), what’s the single word you’d use to describe why these companies have been so successful? That’s right: Data.
By now, most senior executives understand the importance of data at a theoretical level. But many continue to worry about how their business could be further disrupted by Amazon or a new data-driven start up using AI, NLP, ML, IoT or some other acronym. If you’re one of them, it’s worth taking a pause to look from the outside into your business and industry to find the key trends you can leverage to grow and defend your markets, and the insightful data needed to make it a reality. Insights, after all, can help you improve your core operations and launch new businesses or business models that capitalize on changing customer needs.
To me, five key trends need to be considered:
- Platform is king: Growth and importance of the “platforms” that leverage the cloud, mobile technologies, big data analytics and social business. The number of industry-based platforms is steadily rising, driving innovation and transformation.
- Use of new technologies: Machine learning, natural interfaces and data-fueled applications that enrich data to create actionable insight for their users.
- Business models: Industries have been disrupted and are in the process of being transformed – not just in technology but in data-driven areas like finance, health and education with the creation of new services and business models.
- Skills gap: Companies are only as good as the teams they build and the individuals they recruit, retain and develop. Companies need to be agile to survive and thrive. Talent is key and leading companies have invested in people with data analytics skills to deliver improvements and new initiatives.
- API economy: Application Programming Interfaces, which connect your data to the world of cloud-based applications, makes it cheaper and faster for startups to challenge established players.
Data is the common denominator across all these trends. But why is data key? We constantly hear that data is the new oil, the fuel that drives the engines of business. But just as crude oil needs to be processed into usable gasoline, data needs to be processed and refined into insights. Cognitive technologies like machine learning (ML), natural language processing (NLP), speech recognition, and robotics thrive on data. These in turn can generate insights to enable better decisions to be made or processes to be automated which in turn create a positive feedback loop of continuous improvement. But the insights foremost must come from you and your team: What do you want to know about your customers, your market and how your goods or services are being consumed? Companies that gain such visibility and insights have a competitive edge and innovate more quickly.
The trick is to ensure the right data is analyzed in the correct way by the right person, or bot, to take the required action. This in turn helps build a smarter digital enterprise. The companies that will survive and excel in the future are those that use these new digital technologies, and rethink their processes, to enhance the value they create. Customers don’t buy technologies. They buy the value you create for them.
The winning organizations won’t do all this by themselves but instead will partner with selected companies in the often fragmented and complex ecosystems in which they operate. This enables these data-driven organizations to improve their internal operations and grow revenue by creating greater customer value. This only happens by prioritizing innovation, leveraging changing industry trends and generating the right data.