The trouble with buried treasure is just knowing where to dig the hole. Likewise, you might be collecting a lot of data in your business, but if you do not know where to “start digging” with it, you will never strike gold. In an article for Harvard Business Review, Thomas C. Redman discusses some of the many ways that you can use your data to create new advantages:
- Make better decisions.
- Innovate products, services, and processes.
- “Informationalize” products, services, and processes.
- Improve quality, eliminate costs, and build trust.
- Provide content.
- Exploit asymmetries.
Obviously, more (accurate) data means an ability to make more informed decisions, so little discussion is warranted there. But on the subject of innovating products and services, Redman says this:
For example, at Morgan Stanley, Jeff McMillan and his team aim to improve working relationships with their wealth management clients by analyzing everything from client goals and portfolios to available investment products to email. An algorithm then takes this information and suggests actions, at which point advisors choose the best ones to suggest to their clients. McMillan encourages advisors to “imagine you have a conversation at 6:00 PM every evening with a Harvard MBA with 800 years’ experience. You tell her what you’re thinking about, and she thinks through your clients’ opportunities all night long. In the morning, she presents you with a list of your 10 best actions for the day. Wouldn’t that help you make your clients happier?”
Another thing you can do is leverage your data in outward-facing capacities, i.e., start building more data capabilities into the products and services you already sell. Distance-to-empty gas notifications in cars are a good example. Alternatively, you can sell or license your data to other businesses, if it is current and highly pertinent to another business’s interests.
Lastly, “exploiting asymmetries” describes transactions where one party holds more information than the other. That means you can use your superior knowledge to sell less product for higher prices to uninformed consumers (which is kinda crummy, honestly). Or you can make money by helping consumers close those asymmetries, as Carfax does with their business model. That is less crummy.
For additional discussion on these ideas, you can view the original article here: https://hbr.org/2017/06/does-your-company-know-what-to-do-with-all-its-data