In a recent article by Thomas Davenport, he postulates that the direction and investment in Big Data is about to make a shift from data gathering and analysis methods that are focused on a company’s “operations” (technology, products, services, etc. or Analytics 2.0) to data gathering and analysis methods focused on a company’s “offerings” (analytics related to the buying environment or Analytics 3.0.)
He references an article by Nira Daver, “When Marketing Is Strategy” which discusses that idea that:
“Upstream activities (sourcing, production, logistics) are now commoditized or outsourced; but downstream activities (reducing customer costs and risks) are emerging as the drivers of value creation and source of competitive advantage.’
Nira argues that companies need to deliver their product or service for “specific consumption circumstances.” That meeting these new customer criteria is the “reason customers choose one brand over another and is increasingly the basis for customer loyalty.” In other words, “customers rather than product or market now stand at the core of business.”
This down-stream customer focus will increase a company’s costs but it is necessary and will require companies to “rethink” their strategy because:
Competitive advantage now lies outside the firm and is accumulative rather than an advantage that erodes over time as competitors catch up. It’s an advantage that also grows over time due to experience and knowledge.
The way you compete changes over time. It’s not about having better products; it’s about focusing on the needs of customers and your position relative to their purchase criteria.
The pace and evolution of markets are now driven by customers’ shifting purchase criteria more than by product technology improvements.
Mr. Davenport also cites two other sources one which redefines the customer as the boss within an organization. This would not be a positive for me. If I were the leader of the company, I would hope that the employee’s contribution the company’s vision is what is important. If we were both focused on the company’s vision, we would get along.
The other article he cites is about the government’s focus on the product/service it delivers to its constituents has not worked very well. Again, I did not think this article was a good example to illustrate the hypothesis of going from Analytics 2.0 to Analytics 3.0 and the consequences of doing so.
However, the article is excellent and offers great food for thought. Let me know what you think about this concept.