The Ultimate Purpose of Big Data: Customer Intimacy
Activity Needs Purpose
While on a walk in the countryside, a man came upon a huge construction site and he asked a number of people what they were doing.
- The first looked up and said with a sigh, “I’m working”.
- The second proudly said, “I’m doing some of the finest masonry in the world”.
- The third stepped back, looked up and said “I’m building a cathedral”.
Getting all of the material to the site, hiring experienced stone masons, and building to a set of standards are all important. But, without a blueprint or an overarching strategy, what really gets accomplished? Not much.
The same can be said for the accomplishments of many “Big Data” initiatives. There is a lot of activity making products “smart” and significant hiring of data scientists to analyze all of the collected data. But, to what end?
The Ultimate Purpose of “Big Data”
Everything will eventually be connected. It is estimated that there are over 10.7 billion objects connected to the internet today. That number is expected to grow to 50 billion by 2020 according to a recent report by Cisco and DHL1. The corresponding explosion of “data” will require companies to rethink the business that they are actually in. For example, 88% of executives say they now expect their suppliers to provide process optimization and outcome-based services.2 So the ultimate purpose of any “Big Data” initiative has to be the capture and use of data to improve customer outcomes.
TSIA has observed that most organizations pursue this goal by moving along the “Remote Services Continuum”.
A TSIA member from the enterprise hardware industry implemented smart, connected products to diagnose and dispatch service requests without human involvement. The results: improved response time, 90% reduction in hands-on labor costs, and spare part orders automatically dispatched to the field with a 99% accuracy rate.
For many “big data” initiatives, the alpha and omega is service efficiency. While it does help the vendor improve their service delivery motion, the customer is left wondering what the buzz is about.
Another TSIA member used a remote resolve capability to reduce field dispatch rates from over 40% on previous products to less than 10%. The result: 92% of issues are addressed remotely by Level 1 / 2 customer support professionals using the diagnostics built into the product.
Customers begin to see value in the process optimization phase since the onsite service incident is eliminated and resolution times come way down. More importantly, vendors gain insight from the data analysis to find ways to further optimize the customer’s process, not just their own.
GE places hundreds of data sensors on airline jets that collect up to 5,000 data points per second. This “tip to tail” sensor system enables GE and their customers to optimize engine performance by identifying discrepancies between expected and actual performance.
Ultimately, vendors can use insights from big data to help customers reach best in class operational performance. The integration of multiple systems and third party data will enable suppliers to do work that was previously done by customers, partners, or not at all.
As Kevin Roche, President of Global Services at EMC, notes in his video, there are three critical building blocks to drive customer intimacy through big data. I’ve provided TSIA’s perspective on each building block.
1.Shift responsibility of data from IT to the line of businesses and design agile processes & governance to fully leverage insights.
- While IT clearly has a role, using the data to drive customer outcomes is really outside the scope of the typical IT department. TSIA has developed a process that we call “Outcome Engineering”—which is defined as the ability to consistently help customers achieve targeted business outcomes. TSIA recommends the establishment of an outcome engineering team that resides within the line of business.
2. Invest in technology that provides real-time, predictive analytics
- In addition to investing in embedded diagnostics to collect the data, organizations need to enable employees to act on the insights on behalf of the customer. For instance, mobile / video technology and augmented reality can enable field service engineers to move beyond break/fix. The regular interactions with customers put field service engineers in a perfect position to drive adoption and process optimization.
3. Focus on cultural psychology to adapt to changing customer expectations and empower internal teams to trust and act on big data
- In the future, vendors will be selling a platform for continued value creation which necessitates a culture that is enabled to act on behalf of the customer well after the initial technology sale. Two key elements to creating an entrepreneurial culture, are 1) Share more information and 2) Providing the training and tools people need to think—and act—like entrepreneur. Entrepreneurs need access to mission-critical information. In order for internal teams to make good decisions, companies have to be willing to share that information with them. And the internal team has to know what they are looking at. Do your people know how to assess profit and loss? Can they analyze a customer’s business process?
Customer Intimacy through Big Data
TSIA and EMC’s services leadership team are in complete agreement: the ultimate purpose of big data is to build customer intimacy. Vendors are now in a position to use insights from big data to help customers improve their business outcomes. This will become a new source of revenue for vendors as they share in the value created – and who doesn’t need more revenue these days? So while “Big Data” is a new and exciting concept with a lot of potential, without an overall business strategy that is focused on customer intimacy, you end up with a lot of workers that are busy and doing great work. But what you really want is to build a cathedral to your customers that will withstand the test of time.
You can learn more about EMC’s use of big data to deliver a more personalized customer experience in the InFocus Viewpoints for Leaders document, “Unlock Customer Intimacy through Big Data”.
1 INTERNET OF THINGS IN LOGISTICS, A collaborative report by DHL and Cisco on implications and use cases for the logistics industry