External data (Open And Other) Transforms Business – And Is Good Business

Last month, GovLabs, a research organization at New York University released a beta version of its Open Data 500 project.  The study set out to profile US companies that use open data to generate new business and develop new products and services.  Not all of the companies identified have been profiled but the list of 500 provides a wide range of both existing companies and start-ups that benefit from the use of open data. 

While the start-ups are interesting illustrations of innovation and economic value-creation, the presence of big, existing companies illustrates how data transforms business. 

There are also a few others that we’ve been following that didn’t make it onto the list, but that are using open and other external data to better engage with their customers and improve the customer experience.  While the data-driven services might not (yet) be a critical part of their business, these big companies are clearly innovating with data.

  • John Deere no longer just sells tractors. FarmSight and Mobile Farm Manager leverage sensor-based data combined with other data to enable better farm planning and operations.Data from tractor sensors help farmers manage their fleet and to decrease downtime of their tractors as well as save on fuel. The information is combined with historical and real-time data regarding weather prediction, soil conditions, crop features and many other data sets. These tools help farmers figure out which crops to plant where and when, when and where to plough, where the best return will be made with the crops and even which path to follow when plowing. The idea is that these tools will increase the productivity and efficiency of the crops, in the end leading to higher production and revenue.
  • Starwood sells more than just a hotel room. The Starwood Preferred Guest mobile application allows users not only to get information on and book stays at Starwood properties.  It also allows users to “explore” destinations with curated content from social media, weather and other local data.  The application extends the Starwood experience beyond merely a night’s stay at a hotel. 
  • BMW no long just sells cars. Many of the innovations BMW unveiled at the recent CES show involve new sensor technology within the car and connectivity to other devices such as the Samsung watch.  But the new services are also enhanced by data.BMW Assist includes emergency calling, remote services, and access to BMW Assist online portal with weather, news, traffic, local info and entertainment.

Despite these great examples of data innovation, there remains a larger potential.  According to Forrester’s Forrsights Strategy Spotlight on Big Data, Q4 2012, only about 1/3 of existing firms consider external data as important to their business strategy.  Even fewer (only 15%) consider unstructured external data – the social data that Starwood is providing to hotel guests to help them pick their evening’s entertainment.  But a closer look at the data suggests that they really should.  Higher growth companies are more likely to see external data as important to their overall business strategy – including using data-driven services to engage customers and improve the customer experience.

How can you better engage with your customers with data-driven services?  If you're not, your competitors just might be.

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