In Forrester’s new report, The Insights-Driven Business, my colleagues Ted Schadler, Brian Hopkins, and I have identified a predator: the insights-driven business. These businesses are vigorously applying insights to decisions and customer engagements at every opportunity. Their leaders have a fundamental and emotional understanding of the value of insights in driving their business today — and for developing its future. They have corporate strategies and cultures that mean that leveraging data, analytics, and insights is easy and deeply embedded in everything they do. For these firms, prioritizing and coordinating investments in data and technology is not a tortuous process of guesstimating ROIs and long procurement cycles.
So who are these predators? Well, there are obvious players like Facebook, Amazon, Google, Uber, and Netflix. But, less obviously, there are many long-standing mature enterprises across many different verticals: Alaska Airlines,The Washington Post, some European football clubs, some retailers, and others that we call out in our new report are successfully transforming into insights-driven businesses today.
Insights-Driven Predators Are Eating Your Business
By 2020, the combined annual revenue of insights-driven businesses will be $1.2 trillion, and much of this revenue will be diverted from your business. This new type of predator is able to do this by embedding and coordinating the pervasive use of data and analytics across the enterprise to provide up-to-the-second insights on their business and customers. They are quicker and nimbler than you are, and they’re able to make the right decisions in the right moment most of the time. They will run rings around you — unless you join them.
You’re Already An Insights-Driven Business, Right? Wrong!
You and your colleagues have already invested heavily in CRMs, digital analytics, business intelligence, DMPs, and big data systems, among others. You have been pouring over data to squeeze every last ounce of valuable insight to optimize marketing spend, improve conversion, boost adoption, accelerate growth, refine products, improve customer service, and hone the supply chain. But the terrible fact remains: While you may have a case to say that you are insights-influenced, many firms are not truly insights-driven:
Their CEOs don’t truly appreciate the value of insights. In an effort to compete in the age of the customer, CEOs are making a name for themselves by digitally transforming their businesses and the customer experiences they provide. However, they are mostly oblivious to the need to inform and drive these programs with data, analytics, and insights. Without the CEO making insights a high priority, these initiatives will not deliver the value nor achieve the transformation that they promise.
Their strategies don’t coordinate and integrate insights at scale. Today, the CMO, CIO, COO, and commerce teams all have their own insights needs. Most firms do not have an overarching corporate strategy to assimilate and guide a corporate discussion or the effective cross-functional coordination of insights. This is inhibiting the value that can be squeezed out of existing data and analytics assets and is slowing investment in a truly enterprise-scale insights capability that can deliver change, innovation, and entirely new business opportunities.
Their systems don’t deliver insights at the speed of business and customers. Most enterprises are data gluttons, but they are unable to create the insights that the data can fuel. Why? Data is stuck in silos — some of which are legacy data stores and stale processes — which were never intended to be leveraged by modern analytics systems. Many business decisions and customer engagements take place that could have been better guided by data-driven insights that are not being surfaced when they are really needed.
Adapt Or Die: How To Be An Insights-Driven Business
During our research for The Insights-Driven Business report, we found that insights-driven businesses are built and operate differently. Our key findings show that businesses must:
- Develop insights-driven processes that continually learn. Insights-driven businesses develop closed-loop processes and instrument all or part of their business to constantly measure decisions, actions, and outcomes. The data and insights gathered during these action moments are persisted and fed into processes for continuous learning, and new insights are then used to optimize future decisions, actions, and outcomes.
- Balance machine and human to scale expertise. While insights-driven businesses are obsessed with data, algorithms, and machines, they don’t seek to replace humans’ vital function in the decision-making process. The role of the machine is to effectively scale the human expert’s know-how by capturing human knowledge and then feeding this back into their algorithms, which in turn make the expert smarter.
- Continually assimilate and grow relevant data and insights. Insights-driven businesses don’t just amass stockpiles of high-risk extraneous data over time. They are fastidious about continually collecting relevant data to mine for valuable insights that they can use to optimize existing and future operations and business decisions. Doing so builds up a large body of highly relevant data, creating an advantage that younger competitors will struggle to emulate.
- Strategically elevate insights to a C-suite discussion. Business leaders and budget holders truly understand the value of data and analytics in boosting their business and its competitiveness. Procurement cycles aren’t mired in painfully slow cycles of proving ROI and maturing adoption. Insights programs are seen as strategic initiatives, so the needed investment and resources for data and analytics are quickly allocated and have a clear mandate.
This report is the culmination of two years of research that includes speaking to hundreds of firms and pouring over three years of survey data with nearly 10,000 responses. Check out Brian’s blog post on this report for additional perspective. We are excited to share our perspectives and would love to hear your opinion in the comments section below.