The big data race
David Dumeresque of Tyzack Partners explains the demand for big data skills. Whilst few will doubt that the digital age has changed the rules of marketing, there is significant evidence to show that, despite companies having access to more data than ever before, customer loyalty is declining.
Whilst few will doubt that the digital age has changed the rules of marketing, there is significant evidence to show that, despite companies having access to more data than ever before, customer loyalty is declining.
Itʼs worth taking a step back to compare how business was conducted in the past with todayʼs conduct and try to extrapolate the direction being taken. This is important because history provides valuable clues as to what the future may look like, or indeed what it wonʼt look like.
In the past, business was conducted largely on a personal, face-to-face basis. Sales reps would meet regularly with their customers, building lasting relationships that were founded on respect and trust. The reps would sell products to their clients who, in turn, would retail them to their customers. The retailer would rely heavily on the sales repʼs company standing by these products, providing the necessary backup and support if it was required. If the sales rep failed to provide this service, the relationship would break down and the client would stop stocking the product.
To some extent, that still exists today, but with the advent of social media networks the landscape has changed significantly. With the rapid disintermediation of the process, feedback goes directly from the ultimate customer to the retailer and the producer and often at the same time to millions of other potential customers. The chain of trust has been fundamentally changed and an unrivaled level of immediacy introduced into the feedback process.
Equally, the ease with which companies can reach customers today has resulted in fewer face-to-face transactions. Whilst this has resulted in a reduced cost-of-sales, it has also reduced the ability of producers to engender the same levels of trust, not to mention a lower level of service.
The advent of Big Data has provided management with a continuous stream of information which they can analyse to improve their understanding of their customers and more clearly identify the motivators involved in the purchase decision process. However, the sheer volume of data is so large that we no longer refer to them in terms of gigabytes but in exabytes (1billion gigabytes).
Whilst the analysis of big data may provide unrivaled opportunities for innovation and the enhancement of customer experience, it is also creating new challenges and headaches for business leaders. Not only is investment in information infrastructure required, but also an investment in new talent and training/development programmes.
One key question business leaders need to ask themselves is WHO is going to take responsibility for the analysis of all this information and then make relevant decisions. Since big data spans a wide range of functions including IT, marketing, sales, customer services, risk and operations, it will take someone who has multidisciplinary skills and strong leadership experience to influence and inspire appropriate action.
In recognition of the growing importance of big data, some companies are totally revamping the way they deal with analytics in order to achieve better outcomes. One element of this reorganisation, particularly in large companies, is the elevation of data and analytics to the C-Suite. Itʼs a huge leap forward but titles such as Chief Analytics Officer and Chief Data Officer are beginning to appear as CEOs and boards realise that big data has the power to profoundly alter their business landscape.
While they may not know the precise direction of travel, they know that without effective analysis of data, they run the risk of being left behind. Just look at the leap forward UK retailer Tesco took over its rivals with the “Clubcard” scheme in the last decade. In the new environment, the “first mover” advantage is even more marked.
In smaller organisations, data and analytics can come under the remit of the Chief Information Officer (CIO). However, they need to reengineer the IT function to avoid potentially disastrous effects. As the role of technology changes, IT departments require a different set of skills. If they can develop a more holistic view of the organisation’s requirements (rather than concentrating specifically on technology management) and apply creative technology solutions that will optimise critical competitive business
processes, significant opportunities will materialise. Smart CIOs see big data as a means of securing a long-term future for their departments.
Given the transformative nature of big data, those executives charged with the gathering and analysis of intelligence will need to have the requisite skills to take advantage of this newfound knowledge. Additionally, they will need to have the skills to effectively navigate organisational obstacles, thrive amid rapid change and provide the leadership required for the development of a new culture.
In some organisations these people already exist, but often with different titles and a much narrower remit. However, just as big data is altering the business landscape, it is also irrevocably changing the human capital landscape. No longer is it simply a case of companies collaborating with an external research provider to mine data for hidden trends. Neither is big data purely about the need to invest huge resources in ambitious ʻquant and qualʼ research projects. Itʼs about effecting widespread change in the way companies perform their day-to-day business using the data to inform these decisions.
This new environment requires the employment of experts with deep analytical skills who can create relevant predictive models and optimise these to achieve sustainable corporate growth. For those already in charge of research who are moving up to the C-Suite, this will not only entail taking on broader responsibilities, but also taking responsibility for the implementation of actions rather than just providing the data and the analysis.
Big data is creating one of the hottest markets for advanced skills in analytics and the search for appropriate talent has already commenced. However, the conundrum business leaders face in this search is that there is already a shortage of experienced people and the success of companies in hiring this talent may well become a defining point for those seeking to take advantage of big data.
If executives are to remain one step ahead of their competition, they need to act quickly in developing creative strategies to identify the need, attract the required talent, and then retain these employees. To be second in the race may be to put the companyʼs future at risk.