Editor's note: Due to the holidays, there will be no blog post next week. Happy Holidays and Happy New Year!
Many companies are taking a serious look at “digital transformation” and it’s possible to think that it requires a big leap or a daunting hurdle to transform your business. But there is also an easy and accessible digitalization step available to nearly all companies, and it involves leveraging the data assets you already have.
Digital transformation can take many forms, but an aggressive one is monetizing your data. This concept has gained a lot of currency recently, but it is actually not new. One decades-old example was TV Guide. It became the largest USA print magazine in circulation simply by cataloging the upcoming week’s television schedule. TV Guide didn’t own any broadcast assets or even offer insightful reviews. They simply collected a large amount of programming data and made it readily accessible to the average television viewer.
Another example from that earlier era was the OAG Pocket Flight Guide. It provided a complete listing of nearly all domestic US flights housed in a small booklet that could fit into a briefcase or a pocketbook. Without the instant access later afforded by the Internet, the pocket guide became an essential tool that frequent travelers carried with them for planning and changing flights. This was when airlines allowed travelers (business travelers in particular) to change flights almost at will, even between airlines. So if your meetings ran early or late you could simply show up at the airport, check your flight guide for the next flight on any airline to your destination, walk over to that counter and hand them your ticket. But you needed the flight guide to know your options. Without aircraft, crew, landing spots or any other airline industry physical assets, OAG gained a market capitalization worth almost as much as an airline itself.
One of the common dominators of these successes was that the firms leveraged data for external consumption, which can lead to a huge benefit. Perhaps you may see similar opportunities in your industry. A company in the transpiration sector could have access to road or traffic data that could be monetized. A firm may possess weather data that could be useful to people who need to make weather-related decisions.
But frankly these external opportunities can be few and far between, particularly in a world where everyone expects data (and even highly processed information) to be essentially free. So another approach is leveraging data for internal consumption. Perhaps the best-known example is Amazon, who is amassing enormous amounts of consumer data to boost their retail operations. Some say that in addition to market share and infrastructure, omniscient consumer data is one of Amazon’s biggest competitive advantages.
While there are many other ways to leverage data internally, I’ll focus on the one I know best; the detailed order-line data in your demand history. Are you using this highly granular data to create detailed profiles of your customer demand? Are you seeing not just aggregated demand history, but detailed patterns of order quantities and order frequencies? Are you leveraging detailed demand data to optimize service levels and inventories? If not, you are likely missing an easy first win in digital transformation.
There is a wealth of untapped information in invdividual order lines.
More advanced use cases are possible, like demand sensing using unstructured data or for multi-enterprise collaborative planning, but the easiest first step can be using readily accessible data to optimize your business outcomes. It still requires some effort: Improved data collection and management, improved analytics, change management. But these are all problems that can be tackled with modest determination.
Digital transformation can involve dramatically changing your business paradigm. But not necessarily. It can also mean just better leveraging the data already at your fingertips.
Click to learn more about leveraging your order-line data to improve supply chain planning, demand forecasting, and inventory optimization and start your digital transformation.