Much of the focus on the potential for big data has centered around using analytics to boost sales and marketing.
While those areas are indeed ripe for innovation, companies can tap analytics for a slew of other novel improvements to outperform competitors, including identifying new profit models, designing new products and streamlining processes.
Tom Davenport, a professor at Babson College and an independent senior advisor to Deloitte Analytics, outlines the 10 ways companies can foster innovation with analytics in an article in Deloitte University Press.
The 10 ways companies can drive innovation with analytics are:
- Profit model innovation: “There is certainly an analytics spin on this form of innovation, in that many companies in both online and offline businesses are attempting to make profits with new data and analytics-based products and services,” Davenport says. GE, Monsanto and several large banks are among the companies using analytics to identify new ways to monetize their offerings and assets.
- Network innovation: Companies can use analytics to deliver new products, services or processes to their existing network of partners, such as suppliers. For example, a company could deliver analytics to suppliers and partners to help them make better decisions. “In another context, with the Internet of Things, companies almost always need to share sensor data with their ecosystems, and to define standards so that the information can be integrated and analyzed,” Davenport points out.
- Structure innovation: Analytics can be used to organize company assets in new ways to create value. “Large banks, for example, have formed new business units to analyze customer data,” the article notes. “Similarly, other businesses create a centralized group of analysts, and then ‘embed’ many of them with key decision makers in business units and functions.”
- Process innovation: While process improvement was one of the most common uses of analytics in the early days of the technology, companies are evolving from a narrow focus on supply chain and logistical processes to bolster processes in pricing, marketing, sales and manufacturing, Davenport points out.
- Product performance innovation: While product innovation has not traditionally involved analytics, that’s changing now that different devices come with the ability to track the physical movements of the wearer.
- Product system innovation: A business and its network of partners can use analytics to sift through the vast amount of data created by sensors.
- Service innovation: Analytics can drive or measure service innovation, the article notes. Companies that build complex products like vehicles, computer hardware or jet engines can use analytics to monitor how the machines are performing and predict when they may need maintenance.
- Channel innovation: Analytics can measure the effectiveness of the different channels companies use to deliver products and services. “Today, the enormous challenge for many organizations is to understand customer relationships across all channels and touch points,” according to Davenport. “Even identifying the same customer across channels is often a problem, although analytics can make it much easier.”
- Brand innovation: Analytics are key to knowing how a brand is performing.
- Customer engagement innovation: Analytics are ideally suited for digging into customer behavior data to identify the most effective ways to profitably interact with them.