MIT Sloan Management Review Article on Actioned Analytics Pave the Way to New Customer Value

The typical modern company is swimming in data. Whether in the form of inventory flows, manufacturing decisions, customer inquiries, or app and website clicks, there are vast quantities of data created and consumed every day. Yet managers continue to find it challenging to use this data to create new value for customers.

The Research

• Since 2013, the authors have been investigating data-intensive businesses to understand what it takes to generate competitive advantage and new revenue streams from data monetization.
• They conducted dozens of executive and project team interviews; developed in-depth data monetization cases about companies, including Tripbam, Duetto, BBVA, Healthcare IQ, and PepsiCo; and surveyed hundreds of product managers and executives regarding data monetization activities and outcomes.

We blame this data paradox on the classic data-insight-action framework. The familiar process lulls managers into thinking that producing “valuable” data or surfacing insights for their customers is enough. This encourages passivity, and companies become much too trusting that customers will actually use and act upon the information provided. As a result, companies deploy analytics-based features and experiences that customers don’t use. And, because there is no action, there also is no value creation, and certainly no value capture, by the company.