Data-Driven Innovation: 3 Ways to Create a New Level of Performance in Your Organisation
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The document discusses 3 ways that organizations can use data-driven innovation to improve performance: 1) business process optimization through strategic alignment, automation, and risk mitigation; 2) enhanced customer intimacy by improving customer satisfaction, loyalty, and upselling; and 3) product and service innovation such as reducing costs, creating new revenue streams, and enabling open government collaboration. The role of finance is expanding to provide strategic insights and CFOs need skills in areas beyond finance like IT and commercial skills. Data-driven innovation is an opportunity for the finance function.
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Data-Driven Innovation: 3 Ways to Create a New Level of Performance in Your Organisation
- 1. Data-Driven Innovation 3 ways to create a new level of performance in your organisation June 2016 Travis Barker – Consulting Partner
- 2. Page 2 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 “Results are gained by exploiting opportunities, not by solving problems.” Peter Drucker
- 3. Page 3 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 “Innovation is change that creates a new dimension of performance.” Peter Drucker Data-Driven Innovation?
- 4. Page 4 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 Sizing the Opportunity NZ is a laggard, but on the flip-side there’s plenty of opportunity DATA DRIVEN INNOVATION IN NEW ZEALAND SAPERE RESEARCH GROUP & COVEC 2015
- 5. Page 5 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 1. Business Process Optimization 2. Enhanced Customer Intimacy 3. Product & Service Innovation At a Glance 3 ways data-driven innovation is driving efficiency & growth
- 6. Page 6 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 #1. Business Process Optimization Opportunities for productivity gains and cost / risk mitigation • Strategic Alignment • Automation / Productivity Gains • Business Continuity Risk Mitigation
- 7. Page 7 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 Strategic Alignment Measuring & monitoring execution against strategic intent Metrics (Ratios, Comparatives) Measures (Raw Data) Goals & Objectives Success Criteria KPIs Corporate Strategy KPIs BI Strategy Strategic Delivering Executive Scorecards & Dashboards Measuring & monitoring execution against strategy Tactical Delivering Departmental Dashboards & Summary Reports Measuring & monitoring operational performance Operational Delivering Detailed Line-Item Reports Measuring & monitoring individual business processes
- 8. Page 8 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 #2. Enhanced Customer Intimacy Opportunities to engage deeper and build long-term value • Customer Satisfaction & Loyalty • Brand Advocacy • Up-sell / Cross-sell
- 9. Page 9 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 Brand Awareness & Cross-Sell Example: Trustpower’s market defining multi-product strategy
- 10. Page 10 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 Brand Awareness & Cross-Sell Example: Trustpower’s market defining multi-product strategy Trustpower Brand Awareness in Auckland
- 11. Page 11 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 #3. Product & Service Innovation Opportunities to develop and improve market offerings • Reduced Cost to Serve • New & Improved Income Streams • Open Government Collaboration
- 12. Page 12 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 Open Government & Service Delivery Example: The role of data in Social Investment Helping children at risk of poor outcomes as young adults.
- 13. Page 13 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 Open Government & Service Delivery Example: The role of data in Social Investment
- 14. Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. Page 14 of 18 NZ GOVT FINANCE FORUM – JUNE 2016 What Role Does Finance Play?
- 15. Page 15 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 CFOs are no longer only functional experts, but business experts. This means demand for CFOs to have an expanded skill set outside finance. This includes legal, commercial, and IT skills.” Next Gen Finance The role of the CFO is changing TRANSFORMING THE PUBLIC SECTOR | The role of the CFO in driving change: Grant Thornton ANZ Survey “ CFOs are under increasing pressure to provide strategic insights that enable leadership and boards to make better, more informed decisions. FINANCE 2020: Designing a Finance function to meet new demands: Deloitte Canada “
- 16. Page 16 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 Next Gen Finance Data-Driven Innovation is on the agenda
- 17. Page 17 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 Next Gen Finance What’s the immediate opportunity? TRANSFORMING THE PUBLIC SECTOR | The role of the CFO in driving change: Grant Thornton ANZ Survey
- 18. Page 18 of 18 Copyright ©2016, Stellar Consulting Group Limited. All rights reserved. NZ GOVT FINANCE FORUM – JUNE 2016 Where to Next? Think big, start small, focus on outcomes How Governments Can Get Technology Transformations Right; BCG Perspectives
- 19. Stellar Consulting Group New Zealand’s Business Intelligence Specialists Contact Find us: stellarconsulting.co.nz Follow us: @stellarbi Thank You Travis Barker – Consulting Partner
Notas del editor
- Model S P90D: 0-100kph in 3 secs (in Ludicrous mode) – fastest accelerating 4 door ever made… and it’s a 7 seater! - Similar to a Porsche 911 or McLaren P1 ($2m) 450km range – fully charged in 15 minutes Why is Tesla so successful? Tesla has focused on developing efficient energy storage – not solving carbon emissions problem.
- What has Tesla got to do with DDI? DDI is the means by which many organisations are exploiting opportunities. DDI refers to the use of data and analytics to improve or foster new products, processes, organisational methods and markets (OECD). Using the power of data and technology to align organisational execution with strategic intent and create competitive advantage: Business Process Optimisation Enhanced Customer Intimacy Product & Service Innovation And it’s a big opportunity – looking at how the make up of the S&P500 has changed over the past 40 years… it’s completely inverted itself from around being made up of 83% tangible assets to now 83% intangible assets - Amazon v Walmart
- Taking a look at comparative markets NZ is lagging significantly – estimated 1.4% of GVA derived from DDI compared to at least 3x that in Australia. Gross Value Added (GVA) = Consumer Surplus (derived from lower prices) + Producer Surplus (derived from higher margins) Why is NZ behind other countries? We suggest it is down to: Entry costs have been high – this is changing with the availability of cloud based computing. This results in NZ orgs opting to achieve the same outcome using manual labour. We also have a problem of people throwing technology at problems without: Consideration for the supporting processes and people needed to make it stick. Consideration of the wider opportunities Availability of experts in the field has also been a problem in NZ – Stellar hires globally because we find it difficult to find local experts. NZ has a multi Billion dollar opportunity.
- So let's look at the 3 ways we can add value and create new levels of performance through BI / DDI.
- Let's drill down into the first area of opportunity - Business process optimisation is THE biggest opportunity in NZ. Stellar works with a range of organisations to monitor and measure operations, automate manual tasks and mitigate single points of failure. Example: Large Global Vehicle Manufacturer – Corp planning monthly reporting process. Legacy process required manual input from dozens of people each month to compile reports in Excel. Corp Planning then responsible for consolidating into a single file for Japan. We stripped down the process and redesigned it from the ground up. Key driver was risk avoidance, but also benefited from reduce labour costs and more timely availability through automation. Large Global Telco – Reviewing resource investment (tech & people) to identify process redundancy and savings. $2m identified in just 2 weeks!
- Drilling down into Strategic Alignment. Essentially we are trying to achieve a "single version of the facts" (there will always be multiple versions of the truth depending on context) to enhance decision making. This is not just about aligning data & technology, but also people & process. Org change is a key component – if you're not willing to drive change and efficiency in your org then don't waste your time and resources on BI / DDI.
- The second area of opportunity centres around customer interaction. Building a strong understanding of your customers' preferences and behaviours allows for much more personalised and meaningful interactions.
- Let's drill down to examine Customer Intimacy and Brand Awareness. Example: TrustPower is using Data & Analytics to drive its multi-product strategy (energy + broadband). Early adoption of segmentation and predictive modelling to drive marketing campaigns. Enrichment of customer data sets enhances Trustpower's ability to offer the right products to customers at the right time.
- TrustPower has outperformed the market on almost every performance metric. Multi-product Customer churn is lowest in the market (reduced from average 18% to below 8%). Brand awareness is rising steadily – now a strong competitor in metro NZ.
- The third area of opportunity looks at the expanding role of data to expand and improve products & services.
- Example: the Open Data discussion driving innovation and change across Govt Results 9 – Better for Business – is fostering private innovation. Results 10 – Better Public Services – is fostering process optimization. Goal is to raise Govt transactions to 70% via digital by 2017 (DIA) One example in the R10 area is the use of open data and data sharing (eg IDI) to improve Social Investment outcomes. A more holistic understanding of At Risk kids is helping to refine the services provided. Around 1% of five year olds are considered “At Risk” – that’s 600 kids every year. 75% of these kids will leave school without NCEA2 40% will have been on a benefit long-term 24% will have been in prison On average they cost tax-payers $320k to age 35. Some cost over $1m.
- Example: NGO / Charity Stand is working at the front line with kids. They capture much more granular detail about a child and their family. Looking to collaborate with Govt to determine whether this data can be used to enrich a wider data set?
- I’m sure we don’t need to dwell on this, but in short the role of the CFO is changing.
- Here’s a good example – there was more about digital disruption / data & analytics at this year’s CFO Summit than at the recent CIO summit.
- There’s also a very clear message that Process Optimisation is top of the agenda across ANZ Govt agencies.
- Finally, here’s six defining characteristics of successful programmes – note #1: Start with a transformative mindset. If the organisation isn’t ready or willing to change your success will be limited from the outset.
- Presented by: Travis Barker Consulting Partner Travis.barker@stellarconsulting.co.nz