Forrester defines big data as “the practices and technology that close the gap between the data available and the ability to turn that data into business insight.” Interest in big data is strong in Asia Pacific and Forrester expects customer insights and big data analytics to sprawl in 2015.
Businesses increasingly recognize that success will hinge on their ability to close the gap between the available data and actionable insight. Marketing takes the lead here as they seek to use data to fuel customer engagement improvements.
But the urgency to leverage data more effectively extends throughout the entire customer value chain. This affects not only customer analytics, but also traditional business intelligence (BI) in areas like business performance management.
Data mining versus alchemy
Although the term “data mining” has lost favor over the past ten years or so, it is an appropriate description of the majority of data warehousing and business intelligence implementations in Asia Pacific. In the majority of cases, it was entirely analogous to the process of mining precious metals: organizations would sift through massive extracts of data to find tiny flecks of gold that might have enough combined business value to justify the infrastructure investment.
Big data, on the other hand, suggests that the data scientists who primarily use the systems must be more like alchemists than miners. The unwritten expectation of big data is that it will produce gold rather than merely extracting it.
2015 will bring increased fragmentation as reliance on analytics - the determination to strike gold - spreads within and across organizations. Companies will want to: use more cloud-based and mobile analytics; demand that analytics become more interactive and responsive; and will make more use of specialist and niche BI and analytics service providers.
More firms will build Customer Insights (CI) teams that are separate from BI teams - and these CI teams will be under the wing of the marketing department. Technology management will increasingly be relegated to a support function for customer analytics.
Specifically, Forrester believes that:
- Analytics spending will increase by at least 10% across the region. Spending on analytics will increase, but less of it will be visible in the CIO’s budget. Business decision-makers have an increasingly important role in purchasing BI and analytics software. Marketing and other business departments will drive investment in analytics solutions that address specific challenges and opportunities and will spend even more of their own budgets on these capabilities. As a result, tech management will have little visibility into or control over the implementation and deployment of niche and specialist BI and analytics services. The combination of highly accessible and easy-to-use desktop tools, software-as-a-service applications, and cloud-based managed services solutions will propel business spending in the pursuit of enhanced analytics targeting CI, risk management, and improved BI.
- Data discovery capabilities will create opportunities and expose problems. Business users want to define and drive their own data discovery journeys, using whatever information and tools they can get their hands on. In 2015, data discovery and exploration will increasingly take place outside of a centralized BI function led by tech management. For a small but growing number of Asia Pacific-based organizations, desktop-available analytics will become pervasive. But demand for discovery will expose data quality and governance issues - and bring to light the complexities of assembling data from a variety of sources by exposing the inability of analytics and reporting platforms to do more than basic, lightweight integration of data at the desktop.
Producing gold
At the same time, many Asia Pacific firms will still question the value of analytics-related investments. This is particularly true among more traditional family owned organizations and manufacturing firms in high-growth markets like China, India, and parts of ASEAN, where the emphasis remains on a product-centric approach that prioritizes operational improvements and efficiency.
While this focus will remain important, successful analytics strategies will quickly evolve from extending existing - often product-centric - capabilities and services to transforming the business itself, including existing operations and processes. CI teams must illustrate the clear link between digital strategies and customer analytics as increased competition fuels a need for improved customer centricity.
Consider the alchemist’s case to produce gold, not just find gold, and start by:
- Linking customer analytics to broader customer experience and digital initiatives. Effective digital transformation fueled by CI requires an outside-in approach to customer understanding. For most Asia Pacific organizations, this is only possible with direct CEO support. In the absence of executive sponsorship, successful customer analytics will likely be limited to improving and/or extending existing marketing approaches.
- Actively leveraging CI to optimize existing marketing capabilities. While it’s nowhere near sufficient for sustained success in the age of the customer, improving the use of data to optimize marketing campaigns is still necessary. This includes core capabilities around database marketing, campaign planning, forecasting, and predictive modeling as well as performance monitoring, measurement, and analysis Ñ all of which rely on effective data integration and analytics.
- Developing strong data governance as a way to win consumer confidence. The days of competing on low prices are long gone. As companies collect and analyze a plethora of consumer data to gain insights into customer behavior and thus purchasing patterns, the need to store this data securely and limit access appropriately becomes all the more pressing. The current controversy over medical databases up for sale to marketers - complete with last names and addresses - has sparked privacy fears among consumers. Companies that have strong data governance - setting ethical guidelines on how data should be properly accessed and stored securely - are unlikely to face backlash from the public. Quite the opposite: they will increase customer loyalty as consumers trust and have confidence in the company’s products and services.
Michael Barnes is VP and Research Director at Forrester Research
This article first appeared on Telecom Asia Big Data Insights March 2015 edition