Emile Kramers, Managing Director at Accenture, says the idea that “knowledge is power” is becoming true. By making good use of knowledge, insight-driven businesses are cutting their costs, improving their quality, and innovating faster.

An interview with Emile Kramers about Insight-Driven Business, previously published in Dutch on MT.nl

Companies using data to gain insights into their everyday operations is nothing new, says Emile Kramers, Managing Director at Accenture. But what is new, he says, is the scale at which this happening today. “Due to the explosive growth in the amount of data available and the development of all sorts of new technologies, the world of data analysis has changed radically over the past couple of years.”

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Emile Kramers, Managing Director Accenture Digital over Advanced Analytics

Potential Has Grown

For years, data was seen as a kind of rural backwater, in which an occasional ripple was caused by some slight movement on the river bank. Kramers sees today’s data analysis, however, as a bubbling white-water river, with water rushing along and continually changing the course of the river. “The potential of all that data has grown enormously. The challenge now is to make sure we can extract really useful information from it.”

Acting Reactively

Business Intelligence is a well-known tool, especially in the C-suite. The disadvantage of this technology, says Kramers, is that it usually involves looking backward. Progress reports are by nature retrospective. “Although such information can provide a company with very illuminating insights, it’s really reacting after the event. The difference between business intelligence and advanced analytics is that the latter can also make predictions on the basis of that historical information and thereby give organizations tools that will enable them to be proactive.”

“In fact, you can think of advanced analytics as the ears, eyes and brains of an organization.”

Selling Much Better

Today, multiple data flows (such as from sensors, video observation and social engagement) can all be linked up, revealing links that had previously remained hidden. In this way, analytics is about penetrating into a company’s operational processes. “In this way, a store can use real-time data to enrich the operational process. They can sell much more if they know their customer’s behavior patterns and what the customer’s specific needs are as soon as they walk in the store. This is how an organization uses data to create real value. In fact, you can think of advanced analytics as the ears, eyes and brains of an organization.”

New Propositions

Some companies use data mainly to make sure their own operations are safe. They see all the turbulence arising through digital disruption and use the insights provided by data to survive all the digital changes. But they can do so much more, says Kramers. “They could also use analyses and real-time information to differentiate and offer new propositions. Many retailers are now doing just that.”

Customized Offers

In this way, various Dutch online retailers are using advanced analytics to offer highly focused offers geared to a certain customer. “This is what people expect these days. They’re no longer interested in a general leaflet. Organizations that don’t take this step are doomed. We’re seeing the consequences of this almost every day in the newspapers.”

Proactive Repairs

Utility companies often use analytics for predictive asset management. By combining data from various sensors with data from other sources, they can predict when the logistics or production processes are likely to experience problems. “For example,” says Kramers, “a warning can be sent when a machine component is about to wear out, and the part can be replaced proactively rather than waiting until the part breaks down and the production process grinds to a halt.”

“Organizations that don’t take this step are doomed.”

Putting Business Models to the Test

Another reason for deploying advanced analytics is innovation, says Kramers. “People are increasingly using the word ‘disruptive’. Essentially this means that startups are putting existing business models to the test by making smart use of technology. Well-known examples of this are Uber, which has turned the taxi business upside down, and AirBnB, which has shaken the hotel industry to its core. The established order had not been paying enough attention to these young, data-driven companies and the digital transformation they’re bringing with them.”

“The art is to find out quickly and cheaply which new ideas are likely to survive.”

Innovating Faster

Some 20 years ago, companies were still talking about earn-back periods for an investment of 5 to 7 years. That period has now shrunk drastically: only two years ago, it had become 3 years, and now an investment needs to earn itself back within six or twelve months. “The speed at which new products are being brought to the market has risen enormously,” says Kramers. “The art is to find out, quickly and cheaply, which of those new ideas are likely to survive. Advanced analytics can play a big role in bringing various sources of information together. This will quickly show whether an idea is innovative enough to be taken to market.”

Value of Data

Kramers has noticed that, although many companies are using analytics, they are looking mainly at their own in-house data and relevant data from external sources such as social media. But the greatest value is created by entering into a dialogue beyond the bounds of your own industry, he says. “Companies increasingly need to enter into alliances so that they can use each other’s data. Data gathered by one company for one purpose may be very interesting to another company for a different purpose. That’s where you’ find new business.”