I had a significant insight about the future of Big Data and small business this week that I wanted to share with you. The names have been changed to protect the innocent …
I was working with a small company who was bidding on a huge job to handle the maintenance on a fleet of corporate jets. Here is the conversation with the company’s founder/president/CMO (all the same person!):
ME: Well what are your points of differentiation? How do you stand out?
CUSTOMER: I don’t know. We all do the same thing. We maintain and repair jets. Everybody in the business has the same tools, the same skilled technicians and it has just turned into a battle over price, price, price.
So you have no distinguishing technology? Nothing that sets you apart?
No. We have started to download and store data about the performance of customer planes but we really don’t know what to do with it.
Wait. What was that? You are downloading data about the customer jets?
Yes, we have hours and hours of data that tracks performance in the air but we are just storing it at this point. We may use it some day I guess.
Are your competitors doing this too?
They could I guess but I think we are probably a little more ahead on that then them. But what does it matter?
My friend, what you don’t realize is that you are no longer in the jet repair business. You are in the data business!
We then began to work on a ways they could differentiate themselves from the competition by manipulating the data to create value-added services:
- Tracking the performance data could indicate if a jet needed maintenance before a scheduled outage. That way, we could reduce costs since planned maintenance was less expensive than unplanned maintenance. This would also help scheduling and keep the jets in the air longer.
- We could give the customers insights on fuel efficiency. Which planes, routes, and pilots were most efficient and why?
- We could use years of repair data to determine the most probable cause of a problem and the most likely means of repair. This would lower repair costs and potentially cut repair time dramatically.
- By downloading data over time and being diligent with repair records, we could have a complete history of every aircraft, aiding repairs in the future and guiding us toward best practices. We could even make correlations between parts and maintenance costs.
- Compiling reports on jets over time would also provide important quality feedback to the aircraft manufacturers, point to areas for improvement and maybe even provide insight for smarter purchasing decisions in the future.
You can see how we started creating a sustainable, competitive strategy based on analytics and insight instead of simply cutting the price. Implementing this plan could also create a very powerful symbiotic link with the customer that would be difficult for competitors to overcome during the next contract negotiation.
Some of these ideas might seem so obvious. But the problem is — for many businesses — they’re not. They are overlooking their true core business.
More and more, the competitive advantage will come from the numbers. How do we collect them, assess them, and turn them into competitive advantage faster than the competition?
Are you sure your real competive advantage is coming from your people, your process, your plants … or will it be from your algorithms and creative reporting?
Are you starting to think this way for your business?
This post was brought to you by IBM for Midsize Business and opinions are my own. To read more on this topic, visit IBM’s Midsize Insider. Dedicated to providing businesses with expertise, solutions and tools that are specific to small and midsized companies, the Midsize Business program provides businesses with the materials and knowledge they need to become engines of a smarter planet.