Nadella has openly stated his commitment to data as part of his ‘data first, cloud first’ approach, realising the business benefits of driving a top down data culture. He believes a data driven culture is key to fully benefiting from big data, arguing that data is “the most paramount thing inside of Microsoft.”
The business case for building data-driven organisations is clear. A report by IDC suggested that organisations could save £1tn by unifying their data and analysing it better. Data has the ability to empower people and uncover answers, often revealing un-expected results. Businesses that fail to adopt a data-driven approach across the organisation are sure to fall behind the competition, and I believe this culture shift needs to start with the CEO.
The following are the top reasons why I believe CEOs should care about a data-driven culture:
Save time and money
Data holds teams and people accountable. By examining data from every department within a company, business leaders can get an overall view of the direction of the company and make changes accordingly. A McKinsey report on the Social Economy revealed investing in and acting on social business data could result in a 20 – 25 per cent increase in knowledge worker productivity in the consumer and professional services sectors.
Through analysing the circulation of data internally and externally, organisations can identify bottlenecks, over-performing sectors and redistribute staff and assets appropriately to ensure maximum productivity. Making data part of the company culture will only increase productivity, encouraging employees come up with more innovative ways to utilise it.
An example of a company saving money through embracing big data is PCM, a large direct marketer of technology products. They found that the money they were spending to acquire customers was really being used to re-acquire the same customers over and over again. This was not an efficient use of funds. This prompted them to invest in customer analytics technology that makes it possible to recognise existing customers and to efficiently re-market to existing customers without having to pay for expensive acquisition campaigns like AdWords.
Customer data can help teams throughout an organisation engage with customers in a very tailored way. The data uncovered might even lead to a business investing in individual customers differently. For example, many retailers are differentiating how much money they invest in keeping customers happy depending on that customers’ predicted lifetime value. These data-driven companies are investing less time and money in customers who regularly return purchases, and people only buying on discount, and investing more in customer appreciation programs for their best customers.
Microsoft are using data to improve their services to customers by gathering data from their users to improve individual user experiences and drive decision making. Microsoft’s Vice President of Technology and Research, Harry Shum, writing in a blog post commented, “data is a precious resource, and as a company we need to make fewer decisions on intuition and more based on market and other data.” Data is allowing business leaders to make decisions which are centred around the end user.
Data can be used to monitor products and customer responses, allowing firms to better understand new and existing market opportunities. Looking at the data can determine whether product or market initiatives will drive customer excitement and profit, or if it will fall short. Data can uncover personas and segments a business was previously unaware of. CEOs can use this insight to really drive their business forward. Analysing customer data before making important business decisions can help to deliver real business growth, bringing the customers opinion into the boardroom.
How to build a data-driven culture
The single best thing that CEOs can do to foster a data-driven culture is to give all employees access to customer data.
Whether a company operates in a B2B or B2C market, every employee has the potential to be customer facing, and CEOs must assume every employee could come into contact with a customer at any time. Therefore, providing all team members with access to up-to-date customer data is critical so that there is a transparent, single view of the customer. The moment a customer comes into contact with an organisation, it should be as if that employee recognises them as an old friend, no matter which department, employee, or means of contact they choose.
CEOs need to be aware of the business insights available that big data provides throughout the organisation. A top-down data-driven culture will result in employees using data as much as possible in their roles and therefore, increase productivity, save time and money, and create highly personalised customer experiences.
Written by AgilOne’s Omer Artun.