How can data drive innovation?
Innovation is a word that most times sounds so bogus that it can almost pass as a fluff word!
I am an innovative expert– psssst
Hello, can you tell us what you actually do and quit being vague.
Data science, Big data, Machine learning are new words that buzz a lot in the tech space in this 21st century.
Data is the new Gold.Popular Opinion
Logically, the gold(Data) needs to be mined and put to effective use.
The advancement in technology has made it so that he who controls the majority of the information in the world is the most powerful. More recently, even the speed of receiving and processing the data is paramount.
Speed of Information
In 2008, Spread networks invested in a $300 million tunnel to reduce the speed of round trip sending of trading information between New York and Chicago by about 2 milliseconds. (A millisecond is one thousandth of a second). Before launch, traders on wall street were bidding tens of millions of dollars in entry fees and rights to be exclusively on the network. It was the birth of HIGH FREQUENCY TRADING
The rapid development of information technologies has driven the reality that data is the most important resource in our world today. Nonetheless, while data is a highly accessible resource, it is not sufficiently exploited.
Subsequently, this singular ideology has formed the basis between trade wars between world super powers.
Privacy and security of data are now taken seriously and the minutest of breaches has cost conglomerates billions of dollars in fines.
Data is the new capital of global economy, and as organizations seek renewed growth, stronger performance and more meaningful customer engagement, the pressure to exploit data is immenseDeloitte
The KPI way to innovation (Data driven innovation)
Data Driven innovation is one of the technical terms that gets thrown around a lot in innovation focus groups.
KPI stands for Key performance Indicators
KPI is a measurable value that demonstrates how effectively a company is achieving key business objectives.
- The KPI way to innovation frame work refers to how we should rely on data from past performance to make projections on the nature of the market in the near or even distant future, detecting consumer pain points through analysis of consumer behavioral data. An experimental innovative approach is used to apply this data to produce new products and or adapt existing products to achieve an excellent product-market fit.
- The KPI way to innovation speaks to the use of surveys( the famous landing page test among others), feedbacks generated through honest diversified consumer base to generate data that serves as a guide through the process of developing new products and or optimizing existing ones.
Thedefinition of innovation is one that’s always changing and the only way to stay ahead and in the game is to have access to real time data that bears a true reflection of the markets and the factors that affects it.
KPI’s ensure that the performance of a company/product is kept in close comparison to its goals. The data collected in developing KPI’s serves as a score card for the company or particular product.
In recent years, there has been a decline in the sales of Sedans in America. This is a phenomenon that can be easily spotted on a properly drawn KPI chart. This information can help a company pivot production toward the fast moving SUV market. This shift to SUV’s is a necessary pivot that may be needed to keep a business afloat in these times. And staying in business might as well be regarded as the most innovative acts of all.
How does KPI present a valid basis for innovation.
KPI is representative of having a target, a measure to determining when the target is reached, a reporting framework that helps accountability.
Examples of KPIs for a business for a typical business
- Growth in Revenue
- Net Profit Margin
- Gross Profit Margin
- Operational Cash Flow
- Customer Lifetime Value (CLV)
- Customer Acquisition Cost (CAC)
- Earnings Before Interest Taxes Depreciation and Amortization – (EBITDA)
The right combination of KPI’s differ from organization to organization.
KPI is a reflection of the sector, goals of the business and strategy used in accomplishing the set goals.
Check out this post on product-market fit and see how innovation plays a crucial role in getting right product into the right market.
Advantages of Data driven innovation
Innovation = Invention+ commercializationProf Ndubuisi Ekekwe
Understanding market behavior is critical to the success of a product or service in any market.
Data driven innovation helps ensure that inventions have a commercial value.
This is achieved seamlessly because the understanding of the market is built as an intrinsic property of the products released into the market through this framework.
I could have tried to add many more advantages. However, this(mentioned above) is a major advantage of Data driven innovation - one worth taking particular note of.
Hence, analysis of user data was performed and it showed that individuals were using the Quicken platform extended to using the platform to run their business accounts.
Quickbooks was developed and adapted to cater for the finance of businesses.
House of Cards
House of Cards was one of Netflix’s pioneer programs.
In 2013, 86 percent of their subscribers claimed they were less likely to cancel their subscription because of this one show alone. However,through data analysis Netflix knew the show would be a hit before it launched.
From analysis of data sets, Netflix uncovered a correlation between fans of the original British House of Cards TV show and fans of both Kevin Spacey and David Fincher.
The amalgamation of these three elements in one show produced a classic!
Data helps in making the right decisions, charting the right course to growth and moving ahead no matter the landscape of the sector you might find yourself.
Data driven innovation is refers to innovative applications derived from data sets. It is a call to take the collection and use of data to a whole new level.
Thanks for reading,
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