SIM Advanced Practices Council research shows that profiting from digital data streams requires a new set of capabilities, by Madeline Weiss, director of APC.

by Madeline Weiss

SceneTap, a start-up, takes the guess-work out of finding the right bar or restaurant for app users - one that is lively but not too crowded, with the right age group and balance of men and women, and possibly specials on food and drinks. SceneTap uses smart cameras installed at the entrances of selected bars and restaurants that analyze facial features to determine gender and approximate age as customers enter. ScenetapIt exploits the capabilities of digitally generated real-time data streams (DDS) as well as leading-edge analytics.

Do such success stories relate only to new-age start-ups? Not according to Advanced Practices Council researchers Gabe Piccoli and Federico Pigni. They cite examples of large, mature firms that also exploit DDS and analytics for competitive advantage.

MasterCard, in collaboration with analytics firm Mu Sigma, provides retailers with customer insights such as segment, spending pattern and purchase behaviors based on MasterCard raw transaction data.

Coca-Cola's sensor-enabled Freestyle fountain drink dispenser gathers and reports consumption data, and its proprietary algorithm Black Book enables it to standardize the taste of its Minute Maid orange juices by matching consumer preferences with streaming data on the attributes of each batch of raw juice.

Disney deploys MagicBands, wireless-tracking wristbands, in its parks and resorts to collect visitor streaming data such as real-time location, purchase history, profiles and riding patterns for popular attractions.

Ford Motor Company gathers real-time data on more than 4 million vehicles through onboard sensors to provide its R&D group with valuable telemetry data from vehicle use, issues and failures.

Why do some established firms succeed at innovating with DDS while others don't? And what role does the CIO play?

Research conducted by the Advanced Practices Council of the Society for Information Management (SIM) discovered that profiting from DDS requires a new set of capabilities organized into a DDS readiness framework with four dimensions of skills and competencies. Those North American firms that scored high on readiness in these dimensions out-performed the others in the study on competitive advantage, product and service quality and functionality, and overall process effectiveness.

DDS Readiness Framwork

The four dimensions in the readiness framework are:

  1. Mindset: The willingness of organizational members to pursue DDS initiatives, thus embracing changes, some of which will be risky.

  2. Skillset: The ability to coordinate all the organizational resources necessary to deliver value with the DDS and assemble the required strategic initiatives.

  3. Dataset: The ability to effectively identify, intercept and access the real-time DDS that match the organizational needs for value generation.

  4. Toolset: The capacity to use appropriate software and hardware to intercept the DDS and harvest content.

Firms expect CIOs to assemble key capabilities related to skillset, dataset and toolset through a combination of IT staff and contracting arrangements. But mindset is a capability that must be embraced throughout the firm so that those closest to markets and customers not only seek opportunities to bring new products and services to customers, but are willing to take the accompanying risks, including cannibalizing existing products, services, and business models. Here's where CIO leadership can make the difference between success and failure. That leadership should include evangelizing the benefits of DDS innovation.

SIM Advanced PracticesConsider, for example, inviting colleagues both within IT and in other parts of the business to a "town hall" in which you showcase relevant examples of firms - most especially of competitors and potential competitors currently in difference industries. Also consider providing colleagues with frameworks and other tools for spotting opportunities.

The full APC report, Digital Data Stream Winners, which can be downloaded free of charge, presents a value potential matrix to assist in separating the likely winning DDS strategies from others.

Perhaps even more essential than evangelizing and providing frameworks, CIOs can set an example of innovation leadership by embracing change throughout the IT organization.

CIOs can assess their firms' readiness on the four dimensions through the following survey used by the researchers:

CIO Assessment of DDS Readiness

Mindset

  • Our organization has a data-oriented culture.
  • We believe in experimenting and testing innovative IT initiatives.
  • We believe we can beat our competitors using real-time DDS.
  • We use real-time DDS to envision and pursue new competitive strategies.

Skillset

  • We are good at designing new initiatives that exploit real-time DDS.
  • Once we envision an application of real-time DDS, we know how to select the key resources to deploy it.
  • Once we envision an application of real-time DDS, we know how to assemble the needed organizational, financial, and technological resources.
  • Once we envision an application of real-time DDS, we know how to form cross-functional teams with the appropriate business functions to successfully deploy it.
  • Once we envision an application of real-time DDS, we know how to exploit the data to deliver the benefits of the initiative.

Dataset

  • We are good at identifying valuable internal real-time DDS.
  • We are good at identifying valuable external real-time DDS.
  • We have a clear data governance policy.
  • We evaluate the quality of our internal DDS (e.g., timeliness, completeness, accuracy).
  • We maintain an accurate catalog of valuable real-time DDS.

Toolset

  • We have the appropriate tools to integrate real-time DDS with current workflows.
  • We have the appropriate tools to integrate real-time DDS in current business rules.
  • Our systems architecture allows for real-time DDS to be dispatched to existing systems.
  • We have the tools and the technical talent to create our own real-time DDS.

 

Madeline_WeissMadeline Weiss is President of Weiss Associates, Inc., which offers expertise in strategic transformation, team-based organizations, leadership development and business/ technology alignment. She is currently Director of The Advanced Practices Council of the Society for Information Management (SIM), a research-based program for CIOs, and conducts SIM's Regional Leadership Forum.

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