Is your business digital? Like Domino’s Pizza, do you realize that you are not a product or service business, but that you are a software and data business that provides products or services? Do you exploit all of your customer’s data to know them inside-out? Are customers flocking to you because you are driving every engagement with insight about them”? If the answer to any of these questions is not a resounding, “Yes!”, then you are losing revenue and shareholder value.
In Forrester’s new report, The Insight Driven Business, my colleagues Ted Schadler, James McCormick and I identify a type of business that ignores the ‘data driven’ hype. Instead, insights-driven businesses focus on implementing insights – that is actionable knowledge in the context of a process or decision – in the software that drives every aspect of their business. This is a big shift from most firms that fret over big data and technology. Instead insights-driven business focusing on turning insights into action. The big data and technology pieces come along naturally as a consequence.
To gauge the economic impact of insights-driven businesses, Forrester constructed a revenue model for our report that conservatively forecasts insights-driven businesses will earn of about $400 Billion in 2016; however, by 2020 they will be making over $1.2 Trillion a year due to an astonishing compound annual growth rate between 27% and 40%. Given that global growth is less than 4%, how will they pull this off? Plain and simple, they’ll do this by understanding customers more deeply and using that insight to steal them from their competition.