Why become data-driven?
So why become data-driven? And why is it important that we can communicate the value of data?
The missing link on data drivenness, communicating value
In our experience, lots of organisations say that they see data as a strategic enabler or a driver of competitive differentiation, but their executives don’t invest in data improvement activities. And one of the main reasons is a lot of people involved in data struggle to put dollar values on the work that they’re doing and sell the value of being data-driven.
If there’s one thing that pretty much every executive cares about, it’s their customers and the revenue from those customers. If we look at the research that McKinsey’s put out, data-driven organizations are
- 23 times more likely to be able to acquire new customers
- 6 times more likely to be able to retain those customers
- 19 times more profitability as a result because obviously, you’re not spending loads more money trying to get customers that you then lose.
Let’s take a look at how data drives customer satisfaction as that’s one key way to prove the value of your work to the executive committee. We’ll go through some of the value that customers place on good data in the subsequent lessons. For now, let’s take a quick look at a couple of industry examples. We’ve pulled out how data has been used in the telco industry and in the health care industry to drive up corporate performance and to deliver better outcomes for the businesses and their customers.
Healthcare case studies
So in health care, data errors can be critical. They can be life or death. Well in this instance here, we’ve got some winners instead.
- $210 million of fraud prevented in just a single year
- A reduction in office visits and lab tests resulting in $1 billion in savings for healthcare organisations.
- An Israeli startup has created a way that could potentially save the health care industry up to $21 billion a year by avoiding medication errors
All of these are really critical and powerful messages to push forward to suggest how you can use data to improve the outcome in your organisation. Other opportunities in healthcare look at
- Correctly diagnose brain tumours 87% of the time when senior physicians are only hitting 66%
- Reduced falsely idenfitifed cancers by 5.7% and proportion of cases that went unnoticed by 9.4%
- And it’s been estimated that the health care economy can save $150 billion annually if they leverage the top 10 health care projects in development today.
From actually using data to diagnose diseases to making a difference in people’s lives in healthcare with better use of data. All these are real game-changers for any healthcare organisation!
Telco case studies
Now, let’s have a look at the situation in telcos. Well, the telecom industry is expected to spend nearly 40 billion dollars on aid by 2025. So there’s a huge amount of investment there. And if you don’t have great data that investments largely going to be wasted, as we know, about 85% of big data projects fail.
So what can telcos do about it? Well, they can actually use machine learning and applied analytics to drive costs down by up to 40% – which is vast when you think about the size of these organisations.
One of the things that (83% of) telco CEOs say is that customer insights are their most critical investment area. And data about your customers clearly is going to drive more engagement, according to what we just heard from McKinsey. So there’s a handful of examples from the real world that you can go and try and apply in your own organisation. Clearly, if you’re outside the telco or health care industries, they may not be as relevant, but the concept still holds true. Where can data drive business performance and where can data help you support your customers or your internal people in the best way possible?
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1 Mckinsey & Company - Five facts: How customer analytics boosts corporate performance, https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/five-facts-how-customer-analytics-boosts-corporate-performance
1 Tractica: Artificial Intelligence for Telecommunications Applications