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Competitive Advantage Is The Most Important Aspect Video

Powerful algorithms have become table stakes and no longer create competitive advantage, as they once did. Today what matters is having the best data for those analytics engines to crunch. Whether a company is looking to make better use of existing data to achieve specific business outcomes, or wants to gather new data to create an additional line of business, it needs to understand and address various barriers to data maturity. Then it needs to identify its advantaged data and formulate a data strategy here open new sources of competitive advantage—tasks that entail answering several key questions about advantaged data, data collection strategy, data monetization strategy, and operating model. SinceBCG has conducted digital transformation surveys of companies to assess their ability to leverage data.

See Exhibit 1. We also found that while many companies have high data ambitions, few achieve those ambitions. Moreover, most were far from achieving their ambitions, which they set in Companies Competitive Advantage Is The Most Important Aspect to accelerate their progress toward data maturity in order to achieve their data ambitions.

Our interviews with leading companies identified five major pitfalls that companies encounter when trying to reach data maturity:. Meanwhile, however, some companies are avoiding these pitfalls and have successfully improved their data maturity by identifying their advantaged data sets. John Deere put sensors on its large installed base of agricultural equipment and began acquiring data to improve machine performance and provide advanced decision support for farmers.

A leading oil company partnered with BCG to collect data on drilling operations, equipment, and geological characteristics. It used this data to train machine learning algorithms and develop tools to give workers end-to-end visibility into whatever process they are running.

This enables them to make quick decisions at the rig so that, for example, they can better manage the circulation and pressure of the fluid used in fracturing the rock, and maintain fast enough drill-bit rotation to prevent the machinery from Competitive Advantage Is The Most Important Aspect stuck. Once a company has identified its advantaged data sets—which link closely with the business outcomes it plans to achieve—it will have a much easier time managing the other parts of the data strategy: defining business outcomes, identifying needed analytics, integrating the data, establishing appropriate infrastructure to retrieve the data, and adapting the corporate culture to use the data optimally.

See Exhibit 2. Identifying advantaged data sets does not always entail making exceptional efforts to gather new data or create a new line of business. In some instances, the strategy defines the data requirements; in others, the data defines the strategy.

But leaders should always think through the two in tandem. By reframing the business outcomes, they can turn existing data into advantaged data sets. In order to define and leverage advantaged data, company executives need to ask four key questions.

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What is my advantaged data? Given a clearly articulated vision for the business, what data sets can bring that vision Im;ortant life and create a unique competitive edge? See the sidebar. For example, does the company want to differentiate itself from its peers by delivering a great customer experience or by maximizing its operational efficiency or by innovating rapidly?

Once all stakeholders are aligned on the vision, leaders can work backward to identify the data needed to achieve the targeted business outcomes. Whether a company is considering creating a new line of business and gathering new data, or reframing business outcomes to make better use of existing data, a holistic data strategy underpinned by advantaged data opens new link of competitive advantage.

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Among these sources are acuity, scope, human talent, and real-time adaptation. Advantaged data also redefines traditional levers of competitive advantage. See the exhibit. Thanks to IoT and cloud technologies, data sets today can be orders of magnitude larger and more comprehensive than their counterparts a decade ago; and thanks to new analytics, especially Competitive Advantage Is The Most Important Aspect, they can be analyzed continuously and in real time. The competitor with superior data can segment, customize, detect anomalies, see trends, and innovate faster than its competitors.

Over time, those advantages build on themselves. This mechanism is so powerful that data—like geography, manufacturing capacity, and brand in previous eras—may become the asset that defines the boundaries of businesses and even entire industries. Consequently, the advantaged data related to how customers use its equipment, and how that equipment performs under different circumstances.

Expert Answer

For the oil company, the advantaged data sets involved a database of old, unused wells consisting of operations data mudlogs, details about geological characteristics, and the like along with information that advanced sensors were capturing from live wells such as operational parameters, drilling parameters several kilometers down the well, and stratigraphic features. This data helped the company optimize its operations. What is my data collection strategy? After identifying the necessary data, a company can use several methods to collect or acquire the data.]