On the cusp of a Big Data boom

Posted on 27 May 2015 by The Manufacturer

Dell Software’s Joanna Schloss explores why manufacturing is the perfect industry to embody the leveraging of data to generate new revenue streams.

Joanna Schloss, subject matter expert on business intelligence, business analytics, data warehousing, & big data analytics, Dell Software
Joanna Schloss, subject matter expert on business intelligence and analytics; data warehousing, & big data analytics, Dell Software.

Despite the hype surrounding big data, the widespread existence of data is not a new concept, nor has there been some sudden realisation on the part of decision makers that data can be put to use to better their businesses.

Data, and lots of it, has always existed, and companies have always understood that it has value. Previously, there just hasn’t been much that they’ve been able to do about it.

That is, of course, until the development of big data technologies – this wave of new tools makes it possible to store, integrate and analyse data more efficiently and affordably than ever before.

These technologies have transformed data analysis from a cost-cutting mechanism into a primary vehicle through which companies make money and find new revenue streams. When people talk about the power of big data, they’re really talking about this transformation. And perhaps no industry is a better embodiment of it than manufacturing.

Manufacturers have long had the ability to track and monitor much of what’s happening on the production line, as well as some of what happens to products after they come off the line. Historically, much of this data was analysed to lower operational expenditures.

In a way, manufacturers were the poster children for what’s become derisively referred to as traditional business intelligence. Now, however, they’re poised to be one of the– if not the – primary benefactors of the big data analytics boom.

Big Data
Manufacturers are sitting on big data dynamite, with an explosion of new revenue streams well within grasp.

Relative to other vertical markets, manufacturers enjoy three primary advantages that leave them uniquely positioned to benefit from big data. First and foremost, every industry and individual is touched by manufacturing in some way. You’re either doing business directly with a manufacturer, or purchasing something that at some point or another emanated from one.

In addition, because manufacturers were among the first to make widespread data collection a standard practice, they can quickly and easily scale their data collection efforts. Put more simply, a manufacturing company can track virtually everything much faster than most other companies can.

Lastly, manufacturers typically don’t face the data collection barriers that many other companies encounter. Whether they know it or not, many consumers readily provide valuable data to manufacturers on a daily basis.

Put it all together, and you can see why manufacturers are essentially sitting on big data dynamite, with an explosion of new revenue streams well within grasp. Here are three ways they can take advantage of the opportunity:

Cross-sell and up-sell

The Bentley Motors production line.
Modern vehicles have sophisticated computers in them that track everything from fuel consumption to GPS location.

Given the vast amounts of customer data they inherently collect, manufacturers are optimally suited to leverage cross-sell and up-sell opportunities. Modern vehicles, for example, have sophisticated computers in them that track everything from mileage and fuel consumption, to position through GPS. Typically this data is transmitted back to the manufacturer and saved in a central location for analysis.

As a manufacturer, the opportunities to put this data to work to your advantages are many. Mileage use data can be sold to oil change and repair specialists, who can in turn proactively contact you about your next servicing. Or perhaps a coffee chain would be interested in having a car’s navigation system notify drivers any time they are close to one of their locations.

Whatever the case, the key is that manufacturers have the captive audience that retailers are so desperately seeking.

Deliver premium customer experiences

Certainly, manufacturers can use data to improve the overall quality and efficiency of the products they make, but that may only help them maintain their current revenue streams. New revenue streams are most often opened when you can deliver a premium experience or service for which your customers are willing to pay more.

Mark Edwards considers what manufacturing operations would be like without today's modern ERP technology
Manufacturers are well positioned to leverage data into premium experiences for which customers will gladly pay the extra buck.

GPS in vehicles was once a great example of a premium service based on data for which customers were willing to pay more. Today, GPS has become as a standard offering, but when you have access to data, the possibilities are virtually endless.

Manufacturers are better positioned than most to leverage data into premium experiences for which customers will gladly pay the extra buck.

Expand into new markets

This one requires some out of the box thinking, but isn’t that what big data analytics is all about?

Manufacturers – sitting on mountains of information – are uniquely positioned to predict customers’ need for new a product or service, then proactively manufacturer that product themselves, and do so with a fair degree of confidence as to the likelihood of it gaining widespread customer acceptance.

It’s ironic in some ways that its manufacturers that sit on the precipice of a big data breakthrough, because so much of big data and data analytics is about manufacturing – manufacturing new ideas, new opportunities and new revenue streams.

The once-in-a-lifetime opportunity that has been promised to businesses by way of big data is finally there for the taking. It’s time for manufacturers to lead the way.