Embedding big data analytics into company's DNA
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Organizations are awash with petabytes of data and this can help companies create a customer DNA from this treasure trove. Don’t create a Chief Data Officer (CDO), rather let your Chief Marketing Officer (CMO) own this massive data franchise.
The Burgeoning C-suite
In the last couple of years, a number of fancy terminologies have been inducted in the C-suite. In an attempt to be a future-proof organization, the emphasis has been on innovating operations and powering it with big data and predictive analytics. Consequently, roles, such as Chief Information Officer and Marketing Officer, have gained acceptance and traction in boardrooms.
It is estimated that poor data quality costs an average organization $13.5 million per year, and yet data governance problems – which all organizations suffer from – are worsening. India too is fast inching towards a similar situation, especially considering the fact that almost 90 percent of the data was created in last two years.
“It’s flummoxing that companies have better accounting for their office furniture than their information assets,” said Douglas Laney, an analyst at technology research and consulting firm Gartner Inc. “You can’t manage what you don’t measure.”
The exponential growth of data in last few years is a conspicuous fact that can’t be ignored. The digital data generated by India in one year is humongous. The country’s share of digital information is expected to grow 23-fold between 2012 and 2020, driven by continued growth of Internet usage, social networks and smartphones among consumers, falling cost of technology, digitization among others.
Despite the fact that companies are gathering more data than ever, studies claim that 85 percent of CMOs say they struggle to effectively access and use this data in a meaningful way.
While India is a late adopter of multi-channel customer engagement, the biggest hurdle faced by organizations infusing predictive analytics is data silos.
CDO: Let’s Not Add to C-level Confusion
It was the credit crises of 2008 that first coerced major financial companies to look at their data assets with increased attention. This led to the creation of a niche function within organization focusing on the existing customer data for risk management as well as predictive customer analytics and reporting. It is quite evident that the India Inc. is yet to make major headway in this direction barring a few.
Data, which is one of the most prized possessions of your business, needs a leader. Analyst firm Gartner predicts that 25 percent of large global organizations will have appointed CDOs by 2015. And yet we are not anywhere near this figure in 2015.
A research says that only 20 percent of enterprise will use more than 50 percent of the total data they collect to gain competitive advantage. Data silos and inaccurate data are causing business-impacting issues while creating regulatory risks.
In fact, startups, such as Pandora, Uber and Netflix, have utilized big data to their advantage by understanding their customers’ needs and problems better than their giant predecessors.
Therefore, we have seen several startups creating space for data scientists in their organizations. The value of data is now finally being realized, and big data analytics is an oft-discussed topic in C-suite deliberations. Instead of adding to the burgeoning C-suite, a more pragmatic approach would be let existing leaders drive the data agenda.
With CMOs increasingly showing interest in being data driven in their approach, it makes more sense to let them take the strategic lead on this. The new data-driven CMO can take command of data management, launch insight driven marketing campaigns and take ahead the growth agenda while keeping customers in the centre.
With mar-tech taking precedence in every boardroom discussion, it would be more pragmatic to blend the role of chief marketing officer and chief data officer to give rise to a data driven CMO, who is au fait with the data transparency, data governance as well as marketing arsenal to help the organization with more enriched business insights; especially, in countries like India that have not gradually progressed to adopt the function and rather jumped several phases of organization transformation.
With huge volume of customer data already lying under-utilized in organizations, inducting a data-driven CMO will set the ground for smoother transformation of operations, reduce risk and cost, and drive innovation by leveraging information as an asset. Indian organization spent over $75 billion on IT in the last year and IDC reports that 3 to 5 percent of these spends are now being made within the marketing function.
To successfully leverage customer big data, the trick doesn’t lie in doling out capital investment in acquiring large volumes of disparate data. It is about connecting data to create magical customer moments. That’s when organizations will start to unlock the value of this enormous undervalued resource-“customer data.”
(This article first appeared in the Indian edition of Entrepreneur magazine (December, 2015 Issue).