The Global Language Monitor awarded Big Data its 2012 prize as being the most confounding term of the year.
For firms serving business markets, that is especially true, as such firms often work with small numbers of very large customers, a sharp difference from the consumer market environment in which there is something intuitively satisfying about the concept of gaining insight by studying every aspect of the experience of the large number of consumers served in such markets.
And in fact, the Big Data success stories most frequently reported in the business press involve industries like telecommunications, retailing, B-to-C e-commerce, food service, and other ones where the customer base numbers in the millions.
Nonetheless, there is considerable attention being paid to Big Data concepts by manufacturers serving business markets. IndustryWeek has featured numerous articles, webinars and white papers involving the topic.
And some firms in business markets have had some early successes with Big Data concepts, even though they may not be able to give a precise definition of exactly what Big Data is.
In working with a number of companies on Big Data strategy, I’ve found that most of them approach the opportunity from a starting point defined by the richness of data that today’s technology now makes possible.
Their approach basically says “Look at all this new data we now have available. How can we take advantage of it?”
In one instance, however, I worked with a firm that approached the problem differently, asking the question “What data would have a game-changing impact on our business?” Their perspective was that if they could identify data that mattered, then they could focus their attention on figuring out how to make that data available.
Identifying Game-Changing Data
The process through which we tried to identify game-changing data yielded quite a few diverse and exciting concepts, a majority of which continue to show potential in the sense that it appears to be feasible to build the requisite data resources.
Across more than two dozen concepts that emerged from this process, the vast majority fell into one of three categories. Thinking about these contributions might help other firms identify the ways in which their Big Data initiatives can in fact translate into growth and profits.
The first category of Big Data contributions involves instances in which information content is used to better differentiate a supplier’s product, enabling the supplier to capture a share premium, a price premium or both. Two sets of examples illustrate this concept.
Several ideas involved opportunities to incorporate intrinsic-value information into the product itself, in order to enable the user to better manage operations. Some such information enabled users to realize improvements in energy efficiency. Other information enabled users to avoid corrective maintenance situations and better plan preventive maintenance.
The second set of examples involved instances in which customers were invited to participate in an “information exchange” through which they got benchmark information from other firms using the same products, thereby enabling them to gain insights that they could use to improve their own operations.
Both of these categories of business models enabled the firm to say to its customers, “We’ve translated Big Data into gains for you, ones that impact on your bottom line.”
The second category of Big Data contributions involves instances in which information content enables the firm to move into and succeed in adjacency businesses. Three examples illustrate this concept.
One concept involved using newly available information to create an “aftermarket advantage,” enabling lowered costs of service, which itself translated into a competitive advantage and improved margins.
A second concept involved offering an entirely new remote monitoring service, creating a new revenue stream and freeing customers from a high-cost activity.
Leveraging Information From Within
A third new business concept involved offering data-related technology to customers, enabling them to collect, transmit, store and analyze data related to their operations, across facilities and in a secure environment. Each of these business models created a new revenue stream and at the same time added breadth to the relationships the firm had with its key customers.
The third category of Big Data contributions involves opportunities to leverage information in the firm’s own operations.
Newly gained insights about how customers use products, about the high-frequency problems they experience and about the characteristics of the operating environment in which the firm’s products are being used can all contribute to product development strategy.
Insights about how customers use products, about the applications in which they are involved and about what works well (and what doesn’t) can strengthen a firm’s customer targeting, allow for improved messaging and even provide insights related to pricing.
This category of contributions is the one that is involved in many of the consumer market Big Data success stories and the concept of translating customer understanding into better decisions is one that applies as well in business markets.
Thinking of Big Data from the perspective of game-changing opportunities allows for valuable, out-of-the-box thinking, spanning the many dimensions of contributions illustrated by the examples and business models described above.
With the potential to develop data resources improving almost daily, a starting point defined from a growth perspective often points the way to investments in Big Data that in fact yield rewards for shareholders.
George F. Brown, Jr. is the cofounder of Blue Canyon Partners Inc., a consulting firm working with leading companies on growth strategy. He is the coauthor of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs, published by Greenleaf Book Group Press of Austin, TX. He has published frequently on topics relating to strategy in business markets, including articles in IndustryWeek, Industrial Distribution, Chief Executive, Business Excellence, Employment Relations Today, iP Frontline, Industrial Engineer, Industry Today and many others.
