“Firms who characterized themselves as being data-driven were 5% more productive and 6% more profitable than their competitors”
In 1985, Michael Porter wrote a paper called How information gives you a competitive advantage. Competitive advantage, which is the goal of all in business, is an advantage or superior condition that you have over your competitor. Competition has been altered due to changing industry structure and disruption.
Fast forward 30 years and Porter’s paper rings truer than ever. Simply put, data driven companies perform better. “If one business is able to make sense of the information contained in the data quicker, it will be able to get more customers, increase revenue per customer, optimize its operation, and reduce cost” (1). The majority of scientific literature supports the claim that data analytics is a key differentiator. In a recent study, firms who stated that they were focused on data analytics were “twice as likely to be top performers as lower performers” (2). Some firms have even “differentiated themselves strategically with data science to the point of evolving into data-mining companies” (3).
Top performing firms put data to work in a wide range of decisions, large and small. From guiding future strategy to daily operations, top performing firms make decisions based on their analysis of data twice as often as lower performing firms (4). Firms who characterized themselves as being data-driven were “5% more productive and 6% more profitable than their competitors” (5).
Being able to explore data to better understand your customer’s behaviour, offer a customized experience, and gain valuable insights from data gathered from multiple sources is a key driver of competitive advantage, yet many firms are in the infancy of their data adoption.
My study of over 30 enterprise firms, suggests that companies state that data is important to their success, but they are not investing in the practice at acceptable levels and risk losing advantage to those who adopt the practice.
Would you like to realize a performance gain? Be more profitable? More efficient? Of course you do.
The key is to have the right team to read, understand and interpret the patterns in your data. With a complete Data Practice team which includes visualization experts, database engineers, data scientists, and a solid infrastructure team, patterns and value can be found for any organization.
The right Data science team will find value and relevance to elevate business optimization and opportunity.
Interested? Connect with the data team to learn more: firstname.lastname@example.org.
1 Assuncao, 2014
2 LaValle et al., 2011
3 Provost & Fawcett, 2013
4 LaValle et al., 2011
5 McAfee and Brynjolfsson
Blog post written by Jonny Stevens, Eastern US Business Development and Data Science Leader at Lixar