In this 3-part series, tED magazine explores some of the biggest challenges that electrical distributors are facing when it comes to justifying investments in data management and usage in today’s information-rich business world.
Find part I of this series here, and part II here.
Making Big Data Your Best Friend
Now it’s time to talk about big data. Defined as the large volumes of structured and unstructured information that pummels and inundates your distributorship on a daily basis, big data presents both opportunities and challenges for companies operating in the Information Age.
Breaking it down even further, structured data is the stuff that’s already been organized into a formatted repository (usually a database), while unstructured data includes the unruly tidbits of information (e.g., email messages, social media posts, Word docs, PowerPoint presentations, etc.) floating around your organization at any given time.
Both types of big data are important to distributors, or at least they should be, according to Denise Keating, president of Sycamore, Ill.-based DATAgility. “We need a whole educational process in the industry on big data,” she says, “because frankly, I don’t think the distributors are talking about it enough.”
A lot of manufacturers have already jumped on the big data bandwagon. Within the electrical space, for example, companies like Rockwell Automation and ABB are leveraging big data to their advantage, says Keating, namely in areas like smart technologies and products. And going a step further, manufacturers and distributors are also working together for their mutual customers’ benefits.
In this Q&A, Keating explains the basics of big data and shows how it can be best harnessed and applied in the electrical distribution setting:
Q: What types of big data are most relevant for today’s electrical distributors?
A: Most distributors are managing both structured and unstructured data. Structured data includes product data (where you have UPC codes, catalog numbers and descriptions) of a certain length and most likely in a defined format. Then there’s the unstructured data, and that’s where the real challenges come into play. For distributors, the latter includes photos, content housed in a PDF file, Word documents, videos, website comments, tweets, and the number of likes on Facebook. That’s all unstructured, and it’s much more difficult to analyze than structured data.
Q: How effectively are distributors using big data right now?
A: Big data is in its infancy in the business-to-business (B2B) space, and that’s because what happens in B2B is usually three to five years behind the business-to-consumer (B2C) sector. So where B2C is already all over big data, B2B is playing catch-up. At this point, I know that we have a ton of B2B companies asking questions like, “Hey, how do I take big data and make it really meaningful to my business?”
Q: Why is this?
A: I think there is a lack of understanding about what big data really is. For example, it’s about so much more than being able to ascertain which customers have ordered which products and made this much revenue over a 12-month period. It’s also about the day that the orders were placed, what time those orders were placed, what your company’s inventory position was at the time that the order was placed, and so forth. When you start taking big data down to that micro-level, you wind up with an enormous amount of information that can be analyzed and used for future decision-making. From there, you can start to personalize your distributorship’s products and service offerings, and even how you deliver the goods. For example, if you have a customer on a jobsite—and if you can take into account his inventory position, your stock position, and his usage on that jobsite—you can then combine that intelligence with your transportation, weather reports, and traffic conditions to make the best decisions on how and when to deliver products to that site. That’s pretty powerful stuff that distributors haven’t typically had visibility over.
Q: What are the ultimate rewards of taking the time to dissect and use big data at the distributorship level?
A: The ROI associated with big data really starts at the very beginning of mastering the data using a master data management (MDM) system. The question is, what is it worth to your distributorship to have a single, clean, customer and contact record? What’s the value of having accurate, up-to-date product information in your system? What’s the value of the accuracy of the vendor? When you drill down to the answers to these questions, you can help drive operating efficiencies across the organization. And going beyond that, you can assess the impact that the big data has on business processes, your e-commerce strategy, your sales, and so forth. Put simply, if you aren’t managing all of your data, ensuring its accuracy, and using it to drive cleaner transactions between you and your partners (both upstream and downstream), then you really need to get your data act together.
Q: How can big data help distributors shore up and strengthen their customer relationships?
A: Let’s say you know that a contractor is going to place an order with your company. And as part of that process, you’re already making a lot of assumptions about that contractor and how he buys products and orders services during the course of a typical workday. But look at a little closer and you might be surprised to see that some of your customers are ordering from their own home laptops and mobile devices as they sip their early-morning coffee…right at their own kitchen tables. And others are doing the same thing in the evenings, long after leaving the jobsite for the day. These are the types of insights you can get from unstructured big data (posts on your website, Facebook posts, tweets, etc.) and then use to determine customer behaviors. If you don’t really understand what your customers are doing and how they prefer to shop, then you could be missing out on opportunities to serve them better and ensure their loyalty over time.
Q: What is the first step that distributors need to take to turn big data into an asset?
A: Take a hard look at the separate silos of data that are floating around in your organization and acknowledge the fact that they are preventing you from fully leveraging the power of big data, efficiencies, and sales opportunities. If you have a customer relationship management (CRM) platform, an enterprise resource planning (ERP) system, and an e-commerce system all doing different things, for instance, then your customer data is probably all over the place and not readily useable. None of it is consistent, centralized, or useful for good decision-making. Getting your data house in order is the first step to overcoming this challenge, and that means mastering these different silos of data that can then become the foundation for the big data.
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McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.
Tagged with data, DATAgility, Denise Keating