Analytics to Business Value (ABV) – Agility in Digital Product Development

Digital-first companies are using a new strategy,  analytics to business value (ABV).  This method uses customer data to dramatically increase the speed of product development and cost optimization efficiency. It collects, analyzes, and creates business intelligence from customer data from various channels like websites, social media, voice transcripts, etc. By leveraging data and analytics, this technique creates more insight in a shorter timeframe, often within weeks rather than months at scale and across the product portfolio.

Use Case Driven Approach

In the ABV approach, organizations focus on solving a specific use case for the customers instead of focusing on complex technology to provide a solution for the use case. Though it looks simple, organizations often make the mistake of developing a technical solution without fully understanding the business problem to which they’re trying to find the answer.  For example, this approach may not add value by creating a cutting-edge technological solution because their competitors are using it. Companies must first understand what use case the data will solve and start from the use case rather than the technical solution. Without a well-defined use case-driven approach, many IT projects often disappoint by exceeding the original budget without providing any tangible value to the business.

The Use Case Driven Approach is only the beginning. Creating custom-tailored analyses becomes a one-time effort for business analysts working on a specific business problem. Analysts may spend several days curating and linking multiple data sets to answer a business problem. Due to a lack of resources, the curated data set remains with the analyst and is never used again. Next time for a similar situation, another analyst may go through the same process to curate the data. 

The use case-driven approach is the precursor to achieving analytic business value. Companies can incorporate the following steps to achieve agility in their digital product development.

Steps in achieving analytics to business value (ABV)

Following are the main steps in achieving ABV; combining these steps, organizations can achieve agility in their digital product development and create business value for their companies.

Customer-centric product design – Digital product optimization starts with identifying customer requirements; the organization should collect the correct data for the analytics and set measurable metrics to achieve the needs.  The speed of innovation and time to market to bring new products and services are reducing. As a result, innovative businesses have shifted to an iterative, agile product design and development process centered on creating a minimum viable MVP to bring digital-friendly products to market quickly. 

The ability to identify customer needs and design products and services accordingly has always been critical; traditionally, it has been a qualitative process based on marketing and sales teams’ experience. Today, however, there are methods for maximizing returns on customer research by utilizing the vast amount of customer data collected through website analytic tools. Leaders in all industries who are looking for robust methodologies and powerful digital analytical tools to improve customer value and product design must answer two fundamental questions:

How can I quickly get actionable insights from a dispersed customer base?

Consolidating Product portfolio – Organizations can optimize, retire and remove products that have less or no value to their customers.
Product portfolio standardization – Organizations must standardize their product portfolio, and business and IT groups must work together in portfolio standardization. 

Getting data from customers
Traditionally customer feedback is obtained through surveys, interviews, focus groups, etc. Nowadays, companies can get customer feedback through website visits, social media postings, callcenter transcripts, etc. Customers’ feedback has traditionally been acquired through a limited number of formal channels, such as surveys, interviews, and focus groups. Companies may now get a wealth of client feedback from various sources, including social media, website visits, and site reviews, as well as emails and call-center transcripts. This data contains a wealth of information for companies to find instant customer sentiment on their products. Understanding the data and creating tangible actions was a problem for companies until recently.

With the advent of new digital analytical tools and platforms, companies can get real-time customer sentiment; they can accurately find if a customer is happy or unhappy with their product and services. The analytical tools allow the companies to fix the issue in real-time and measure the customer sentiment to determine whether the problems have been corrected. For example, from the social media comments, companies can compare customer sentiment on their product category with their competitors on various measures like customer buying experience, feedback, price comparison, etc. Now the digital analytical tools and platforms allow companies to instantly get real-time feedback on their brands and their competitor brands.

How can I balance customer value and product cost?

Balancing customer value and product cost
By using customer sentiment data, companies start changing their product. Now they’ve measurable data and can identify what needs to be changed in their development, reducing cost and increasing customer satisfaction. They can go feature by feature to analyze the customer sentiment directly correlating to minimizing the product cost and maximizing the customer value. Traditionally it takes months, sometimes years, for companies to incorporate customer value into their products. Now with digital analytical tools, the entire process can be achieved within weeks. Companies can create an MVP, test it, get instant customer feedback, refine the MVP, and the cycle continues.

Consolidation and standardization of product portfolio
Consolidation and standardization are two challenges companies must address to gain agility in their product development. Consolidation of products directly affects external customers; instead of using multiple products, they may have to switch to a single product. Companies must make sure this doesn’t negatively affect their satisfaction. Product standardization affects the internal organization; business and IT should work together to reduce the product offerings and standardize the existing products with a standard interface. Achieving these two gives tremendous agility to companies in bringing new products with a customer focus. 

By combining the use case-driven approach and collecting customer data through digital analytic tools, companies can gain valuable analytics and competitive business value. They can transform their entire product portfolio to true agility.