Unlock the business benefits of digitisation

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Analytics technology is allowing businesses to serve and interact with their customers in innovative ways. Cutting-edge businesses are using the technology for activities as diverse as picking up early warnings of design failures from users’ tweets or providing customers with real-time mobile alerts on their flight bookings.

However, the technology can be culturally disruptive; for analytics to be fully exploited, CIOs and chief digital officers (CDOs) must cross corporate boundaries to work in partnership with other executives, particularly chief marketing officers.

Consulting group Booz & Company argues that understanding this “digitisation imperative” is essential to unlocking competitive advantage and business benefits. Regardless of industry, companies will depend on mature and cutting-edge information technologies to connect with customers, suppliers and employees to stay competitive and succeed.

Richard Bhanap, partner at Booz & Co and co-lead of its UK Digital Business & Technology practice, says organisations need to accept that digitisation, including data analytics, is a fundamental part of the new business model, affecting every corner of the business.

“When you talk about digital today, companies recognise the world is changing and new technologies and new ways of using technologies are changing the way customers and employees are behaving,” he says.

Today, the focus of digitisation is on the consumer interface, with obvious players being retailers and e-tailers; and consumer products and service companies wanting to get closer to their customers.

Analytics technology can help businesses to transform the customer experience but to achieve its full potential, IT and marketing must work together, writes Lisa Kelly

Time to embrace the digital world

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“Many companies have an omnichannel presence and are leveraging mobile because there is a huge overlap between digitisation and mobile. They want to understand their product proposition and are spending on digital commerce, digital channels and digital marketing,” says Bhanap.

However, he predicts digital technology will soon stretch across the enterprise as the benefits of analytics and big data are applied to the supply chain.

“Digitisation today is at the front end and the customer interface, but it will apply across the value chain and create new ways of doing business and new sources of revenue. Digital will be in the fabric of business,” adds Bhanap.

Collaboration between IT and marketing

The CIO is well placed to drive the transformation to customer analytics, he says, but the big stumbling block is the gulf between the CIO and the chief marketing officer (CMO).

“It is remarkable how much technology spend is channelled through marketing, for example, on digital communities. The real challenge is frustration with any CIO who focuses on automating the back office and not on new ways to engage with the customer,” says Bhanap.

This hiatus is leading to the rise of the CDO to drive the agenda in a growing number of organisations.

“There is often a disconnect between IT and marketing. A huge number of CDOs are being created in marketing organisations. Unless they are digitally business savvy, there is a risk the CIO could be marginalised,” says Bhanap.

“Unless they are digitally business savvy, there is a risk the CIO could be marginalised”Richard Bhanap, Booz & Co

Network operator uses analytics to drive profitable customer offers Erez Yakoni, senior vice president, CIO, T-Mobile USA, highlights the importance of analytics in understanding your customer in a fast-paced world where interacting means having to react quickly to drive both customer and business benefit.

The network operator faced the challenge of managing its churn rates, while maintaining profitability. Offering better pricing options provides better value for customers, but potentially erodes revenues.

To overcome this, T-Mobile USA implemented a SAP Hana and HP platform. Analysis of mobile data enabled it to make the right offers to the right customer base, creating a win-win situation by providing innovative services to its customers while also making money.

“To drive that into our base, we needed to do a lot of analytics; understanding who in the base is fitted for the offers. That type of analytics is fairly heavy from a datasets perspective and the raw data you have to crunch and put together,” says Yakoni.

Dealing with massive datasets and different elements of the customer base “takes a lot more horsepower to get to the answer”, he adds.

The network operator wanted to be able to put an offer out and measure quickly how it is accepted and how it is rejected; for example, putting two sets of offers into

different geographies to build nuances and try to understand the differences. “It created a lot of data coming back at us very quickly and the need to respond to that data very quickly. Once you engage with the customer, you can no longer take your time,” says Yakoni.

Traditionally, the process of running queries and analysing data could take weeks. “Single tasks could take up to three days to crunch data,” says Yakoni.

Deploying the SAP Hana on top of the HP platform has reduced that to 15 minutes. The operator now has the ability to analyse huge data volumes and make complex offers, which was not possible on existing platforms.

“We weren’t able to do the iterative process – the timelines were not there and the offers would become stale and customers become uninterested. You have to strike while the iron’s hot. We have been able to drive a lot more sophistication into our offer process than we could before,” he says.

Using analytics has increased revenues; Yakoni says customer acquisition value was $35m at the year end and over the lifetime of the platform it will be hundreds of millions more. Analytics has proved to be innovative and invaluable.

“We like to use innovative technology to give ourselves a competitive edge,” says Yakoni.

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Analyst group Gartner predicts that by 2015, a quarter of all companies will have a CDO. “Today, 5-6% of businesses worldwide have a CDO and that figure will triple within a year. It is on a really fast, crazy trajectory,” says Dave Aron, Gartner fellow in the CIO research group.

However, a digitally savvy CIO is the best placed to help companies exploit analytics technology to reach their customers.

“Many companies are embracing the digital world and creating new sites and apps to connect with customers. The difficulty is when a new digital community needs to be integrated into enterprise systems, such as the corporate CRM system,” says Bhanap.

Analytics technology, big data, cloud-based systems will mature and create exciting new businesses, he predicts. “We will see a revolution and new business models created. Not everyone will succeed, but CIOs need to move quickly, spend wisely and not be afraid to fail, because they will learn and gain experience to be able to fully exploit analytics and big data,” says Bhanap.

True grit

One company that sees the value of using big data to transform the customer interface is risk management specialist Gritit, which provides gritting and snow clearance services. IT director Brendon Petsch says the company, which has doubled in size over the past six years, focuses heavily on customer service.

Gritit imports weather data, using historic data to predict trends, but also analyses data in real time. “We use data from our onboard computers to give us a more detailed picture of what is happening at sites to guarantee servicing. By checking and cross-referencing PDA data and GPS data, we can have 100% confidence that a service is completed, which can stand up in court if there is a compensation claim,” says Petsch.

Gritit is now looking at using mobile apps to allow clients to interact with the company and to check up on service information when they choose. “Much of our work is done between 6pm and 6am, so 90% of the time we are not seen. We used to get phone calls asking, ‘Have you been?’, but now we send all the report data relevant to the individual client via email or a portal. We are looking into app notification because we are always trying to find better value for clients,” says Petsch.

Right priorities

The question for many businesses is which steps to take with data analytics. “There are so many potential opportunities; picking the right priorities is a problem as well as an opportunity,” says Andrew Horne, a managing director of the CEB CIO Leadership Council.

He suggests the CIO can help to prioritise. Many companies are already forging ahead with digital projects, including a car maker that monitors references to its brand on Facebook for more targeted campaigns; a business-to-business technical company that monitors complaints in chatrooms and links this data to client accounts to ensure a better service; and a global supply company that uses big data to model every conceivable disruption scenario such as floods, which could knock out production.

Horne acknowledges the tension between CIOs and CMOs: “Heads of marketing don’t want run big IT groups, but they do want to be able to quickly experiment with big data.”

“Heads of marketing don’t want run big IT groups, but they do want to be able to quickly experiment with big data”Andrew Horne, CEB CIO Leadership Council

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He suggests that CIOs and CDOs actively make it easier for the CMO and the business to experiment with analytics. “Companies need a flexible IT team that can have different on-ramps, for example, working with IT from the start or working with external advertising agencies and then handing it over to IT to run. It is in no one’s interest to say, ‘This is mine – not yours’, but the message has to cascade down to junior members of the IT department,” says Horne.

He believes the key skills in a digital future are flexibility and making people feel that they can ask for help: “Good team working and collaboration skills are key; and on the tech side, skills around prototyping to create a good user experience early on are essential.

“Big data has put pressure on the IT team to help data to be exploited rather than providing all the tools to do the exploiting. The CIO can help with training and user coaching, to avoid mistakes in misinterpreting. Analysing big data works best in a collaborative environment,” Horne concludes.

Making sense of big data for closer collaboration with fans and sponsors is at the heart of NASCAR’s (National Association for Stock Car Auto Racing) Fan and Media Engagement Centre, which it developed in partnership with HP.

The centre in North Carolina is a hub for interaction with fans and partners, which allows better decisions to be made based on sharp insights, by being able to react to data from multiple sources.

NASCAR is able to exploit digital information and extract intelligence from many formats, including capturing millions of social media conversations, from sources such as Twitter and Facebook, as well as more traditional forms of media data, such as print and radio and aggregating the results in real time. Once unlocked, core messages surrounding a NASCAR race can be acted upon.

Brian France, chairman and CEO of NASCAR, says: “The Fan and Media Engagement Centre is the technology breakthrough that allows us to stay much more connected to our fans in ways that we could never have dreamed of 10 or 15 years ago.”

NASCAR chief marketing officer, Steve Phelps, says: “NASCAR has a broader fan base, and a more diverse and the largest sponsor base of any sport out there; so for us to get insights that will allow them to understand how they can achieve a stronger ROI is investment-critical.”

He says the aim of working with HP focused on NASCAR understanding what is happening with its fan base.

“We’re doing something with HP that’s never been done before. Our vision was to hear about the dialogue that was happening within NASCAR. What’s the tenor of it? What does it look like? What’s being said? And then be able to react to that. It’s about us doing something for our entire ecosystem – for our drivers, for our teams. It’s really about serving the fans,” says Phelps.

HP built an end-to-end solution for NASCAR – incorporating software, consulting services, and hardware.

Steve Worling, senior director of IT at NASCAR, says bringing all the diverse media data together as a single source of data is just one part of the equation.

“My biggest challenge is how we take all that unstructured data and feed it back into NASCAR datacentres and get it all into something that makes sense,” he says.

Phelps agrees that knowledge is different from information. “It’s not enough to just get the data – then you have to use the data,” he says.

Phelps says HP has developed the tools to be able to look at what is happening and then being able to react.

“Whether it’s from a fan perspective and what the fans are saying, or from a media perspective and what the media are saying about our sport. Those are important things for us to be able to give to our sponsor base and allow them to track their ROI,” he says.

Bringing separate data strands together and stitching them together is critical for a bigger picture, says Worling.

The technology creates “a single pane of glass story that helps us understand what’s being talked about across the ecosystem of the sport”, he says.

Interesting content can then be served in an appropriate way.

Worling says the centre brings a new kind of touch to partners, sponsors, tracks, and teams that was not possible before the partnership with HP.

“It wasn’t just about the services, or the hardware, or the software solution. It was the fact HP delivered on all three of those stacks. It was a seamless integration solution that they could deliver on and manage internally,” he says.

Looking forward, France is confident about the role of big data and the centre for NASCAR.

“This allows us to get a head start on what is obviously going to be the next frontier of digital media and social media. We’ll get better as the technology gets richer and better, and the sport will be on the cutting edge of this,” he says.

Case study: NASCAR