Myth: Traditional reporting and analytics provide a ‘good enough’ perspective for forecasting success of Consumer Goods companies.
Reality: Forward-looking analytics that incorporate big data are a must-have for decision makers angling for a strong competitive edge.
Leading Consumer Goods companies approach today’s competitive landscape differently. Most rely on traditional business strategies for staying in the game, while those that rise to the top are embracing a new pillar for optimizing business decisioning: data.
This fundamental component of their success yields powerful competitive insights that drive decision-making and operational processes—these companies have become data-driven.
The expanding data landscape
Leveraging data and insights for competitive advantage is not new. What is changing, however, is the vast number of new, growing and diverse data types emerging as demands on businesses exceed existing analytic capabilities.
The good news is that more data is available than ever before, and business leaders know that nontraditional and varied data sources can be used to derive critical business insights that can put them in the forefront of their marketplace. The challenge, however, is that—despite being data-rich—many decision makers are still insight-poor.
Too often, executives struggle to extract value from data already under their control. And businesses are overwhelmed by the continually expanding data volumes from diverse sources, such as social networks, connected devices, Web interactions, and sensors.
Staying ahead of the “new” consumer
Maturing technology, Internet connectivity, social channels and mobility are connecting people and businesses while creating a sea of digital data. As a result, marketplace power has shifted from sellers to empowered consumers who expect cheaper products and faster services, and more personalized customer experiences.
So, what does a business leader do with this new consumer-lead, data-driven business imperative? First, they adapt their culture and behavior to leverage different types of consumer, retailer, and operational data. Data-driven businesses are more experimental in their data analysis, and have a greater tolerance for iteration and “fail fast” experimentation.
Second, they regard data as a unique and valuable asset, one that cannot be replicated by competitors. They see data as lifeblood that flows into and throughout the whole organization. To data-driven companies, data is an essential ingredient—in the same way that internal processes, machinery, and employees are core business components.
Third, they use analytics and integrated data to drive strategy and decision-making toward a tactical business plan and, ultimately, strategic success. This integrated data view can be across internal and external data sources, as long as they are relevant to company goals. In the Consumer Goods space, this includes retailer point-of-sale and loyalty card data, operational shipment data, social and mobile data, and consumer data. Data-driven businesses infuse analytics into their decision-making—from top to bottom—leveraging its value via integrated data.
Finally, data-driven businesses make fact-based decisions, rather than relying on gut or instinct. Most have built analytics and insights into the leadership level of the organization, often establishing a Chief Analytics Officer or EVP/SVP of Analytics and Insights to demonstrate focus in this space.
Measuring ROI in a data-driven business
As Consumer Goods organizations become increasingly digitized, it can be difficult to measure the benefits of shifting to a data-driven business. In fact, determining how data contributes to performance and the bottom line is a relatively new field; however, research reveals the following:
- Outperform their industry peers by up to 6 percent
- Generate 9 percent more revenue through their employees and physical assets
- Enjoy a market value 12 percent above average
- Are as much as 26 percent more profitable than competitors
Becoming a data-driven business requires top-down leadership and decisioning on the idea that data is an asset and analytics are an important investment for the organization. It also requires a cultural change, and an evolution of technologies that enable the business to fuel an agile decision-making process throughout the organization.
The data-driven business journey is one that leading Consumer Goods companies are pursuing rapidly, while laggards are distracted by historical views of their performance to drive the business.
Author: Justin Honaman , Teradata