Digital insights are the new currency of business
Businesses are drowning in data but starving for insights. Worse, they have no systematic way to consistently turn data into action.
Despite significant investments in customer insights, big data and business intelligence, three problems prevail: too much data and too little insight, poor linkage between insights discovery and business action, and scarce learnings from actions taken. This can’t continue.
In today’s data deluge, only digital insights—information about customers, products and business environment refined into meaning—can generate the actions you need to win, serve and retain customers who demand firms to treat insights—not just data—as a business asset. Digital startups and advanced firms are taking a new approach Forrester calls “systems of insight”—the business discipline and technology to harness insights to consistently turn data into action. Key ingredients are multidisciplinary teams and an insights-to-execution process to embed insights in software, digital experiences and everyday work.
The biggest difference between systems of insight and previous approaches is that in this holistic process, firms systematically implement, embed and test digital insights in the context of tangible business actions. By adding developers and business practitioners to the insights team, you are in a position to implement digital insights directly into software and empower employees to making insights-driven decisions.
On the path to insights-driven, businesses need to connect and extend big data, analytics and execution technology (See chart on page 10, KMWorld 2015, Vol. 24, Issue 9, or download chart 1) into a converged insights platform architecture that makes data and insights accessible to all. That platform must help reduce the friction between data and insights (the realm of big data), insights into actions, and enable a learning path to improve data and insights over time. It is the convergence of those three that makes systems of insight truly new and differentiating.
Systems of insight will transform customer experience.
Because revenue growth and customer experience optimization are top 2015 business priorities, it is important that firms focus their energy there. Three factors influence customer experience—how effectively your company meets customer needs, how easy you are to do business with and the emotion an experience made the customer feel. (see chart on page 10, KMWorld 2015, Vol.24, Issue 9 or download chart 2) Systems of insight improve all three by:
- Helping you care for high-value customers in their time of need. Your customer’s needs are contextual and change all the time. Due to adverse weather conditions, is your high-value customer stuck in a crowded airport with no information, no place to sleep and no way to get out? An insights team dedicated to your customer’s journey will be able to sift data, discover insights—like the fact that hotels are filling up due to flight cancellations—and recommend action to customer care employees who tend to your high-value patrons.
- Solving customer problems efficiently when they transact. When customers want to transact with your firm, they expect it to be easy. Disconnected processes and employees who lack cross-process insight frustrate and drive them away. Systems of insight unify data across process silos and use insights to drive contextually relevant and easy experiences. For example, if your customer has just tried to make a payment on your website and failed, a system of insight arms your contact center agents with knowledge to quickly resolve the problem.
- Disrupting the competition with revolutionary experiences. Digital predators create new experiences that competitors cannot easily replicate. For example, online retailer Stitch Fix sells clothes to people who don’t want to spend time shopping. The company’s competition must get customers online or into a store, but Stitch Fix uses insight to just send clothing. As another example, Tesla Motors uses a system of insight to continually improve the customer driving experience, sometimes while customers are driving. Ford Motors, General Motors and Nissan are only now starting to do that.
Tech and marketing teams must build systems of insight together.
CIOs and their teams have a responsibility to implement and manage the business technology (BT) their firms need to understand and serve powerful customers. Forrester calls that the BT agenda—the technology, systems and processes needed to win in the age of the customer. Systems of insight play a vital role in transforming technology systems into that engine of business growth. And so CIOs must play a major part by extending the BT agenda to include systems of insight.
Understand, however, that building out systems of insight is not a complete change from the work your company is already doing in customer insights, business intelligence and big data. It is, instead, a convergence and extension of those things, as well as a shift in mindset and organization to take insights-driven action and not just supply data. CIOs should take the following steps to build systems of insight.
CIOs: Partner with your CMO to fund the first insights teams and process.
We estimate that assembling a digital insights architecture and setting up the first few systems of insight could cost anywhere from $2 million to $10 million over two years. A lot depends on how much data infrastructure you have in place already. While you may have to hire more data scientists or data engineers, you already have many of the right skills in place to create one or more insights teams of five to 15 people.
But you shouldn’t do this on your own—and, in fact, you can’t. The first insights teams will be directly focused on customer insights and engagement, something your CMO cares deeply about. So work with him or her to identify the best places to get started.
Extend your technology into an insights platform architecture.
Your firm has a lot of technology already—perhaps a data warehouse, analytics tools, application programming interface (API) management, cloud-based Hadoop, data service and business process management (BPM) suite, just to name a few. To become insights-driven, you must connect and extend those building blocks into a digital insights platform architecture that securely democratizes data and insight, translates insights into actions and enables a learning path. Start the transition to being insights-driven by meeting with business colleagues, department heads, enterprise architects and vendors to weave together and extend existing capabilities. You will need to:
- Securely supply data and insights from everywhere through an insights fabric. You will need too much data to centralize it all, even in a data hub. Instead plan to call data from everywhere, including one or more big data hubs and cloud and legacy systems stitched together with common metadata, governance and federation technology—i.e., an insights fabric.
- Reduce the friction between digital insights and action with execution engines. Insights must easily flow from development into software systems. Your digital insights platform must catalog, unify and integrate insights development tools and execution engines, such as API gateways, digital experience delivery platforms, BPM suites, low-code platforms, streaming technologies and mobile development tools.
- Allow a wide variety of analytics and data science workbench tools to plug in. Business practitioners already use customer analytics tools. Insights teams need to use those plus data science technologies, agile BI tools and data preparation functions. The digital insights platform architecture provides a framework for plugging those tools into a collaborative process, provisioning them with data and implementing insights directly in systems of engagement.
- Tap and manage data feeds from everywhere. Every business action produces a customer, employee or partner reaction—and this means more data to analyze and learn from. Data stream processing tools are gaining traction, and Amazon Web Services, Google and IBM are building cloud solutions for high-velocity data capture. But there is still too much data. The platform will need to tap data and insights on demand from products, devices, brokers, partners and open data—then prioritize and filter the data you can use.Integrate collaboration, preparation and governance tools toexpedite teamwork. A digital insights platform architecture provisions for tools that make it easy to work collaboratively and within the bounds of policy. Some of the tools are in place: collaboration platforms, for example. You should connect others, like search, business glossaries and metadata managers. And you will need some new tools to do things like link customer engagement to employee actions in content marketing tools.