Capgemini’s Four Models for Changing the Bottom Line with Big Data

Four Steps to Ensure Your Big Data Investment Pays Off

Big Data is changing how businesses function in four distinct ways, according to a recent Capgemini report.

The consultancy queried 1,000 senior business leaders about Big Data to determine how it’s being adopted across different sectors and regions of the world. The findings suggest that Big Data matters: Those surveyed identified “a significant level of disruption from new competitors moving into their industry from adjacent industries (27 percent),” with 53 percent saying they expect to face increased competition from start-ups enabled by data.

They also expect to reap real returns on their own Big Data dollars, with 56 percent proclaiming their Big Data investments over the next three years will outstrip past information management investments.

I’m not sure why three years, exactly, but there you are. Honestly, what’s more interesting is the four Big Data “opportunity models” identified by CapGemini. The report notes that Big Data can add money by:

1. Creating efficiency and cost savings. It’s not surprising that companies first adopt Big Data as a tool for cutting costs. Specifically, companies will either use the data to find new operational efficiencies or as a way to reduce IT costs through modernization, the report notes.

2. Growing existing business streams. Sixty-one percent of senior leaders said Big Data is becoming a driver of current revenues, in part because it provides a “much more granular understanding of their customers,” the report notes.

3. New marketing-disrupting revenue streams. I expected Big Data to open up new revenue streams — but it turns out, 64 percent said Big Data is changing the business model itself.

“We are seeing consumer products companies becoming retailers through their increasing knowledge of their consumers, telcos using the data they have about their customers to develop new revenue streams such as geo-located marketing services, and utilities using smart meter data to provide household equipment monitoring and servicing offers,” the report notes.

An interesting side note: More disruption correlates with greater opportunities.

4. Monetizing the data. It was widely predicted that Big Data would become the product for some organizations and, in fact, that is what’s happening in some industries. Predictably enough, financial services hopes to monetize money, but there are a few surprises. For instance, survey and mapping companies are now selling their data as digital services. The survey found that 63 percent think they will eventually turn Big Data into revenue.  It’s possible this model may pick up steam as the Internet of Things comes online. Then again, monetizing data may trigger more government regulation.

Typically, companies start Big Data by focusing on the first or second area. Long term, Capgemini contends that “the winners” will focus on the last two.  For more on how to monetize data, check out these relevant slideshows, How to Monetize Data in Five Steps and Seven Ways to Make Big Data an Actionable Opportunity.

The models cover just four pages of this 24-page report. If you’re struggling to justify Big Data expenditures or further investments, it’s a free download that will help you understand how others are using Big Data.

Loraine Lawson is a veteran technology reporter and blogger. She currently writes the Integration blog for IT Business Edge, which covers all aspects of integration technology, including data governance and best practices. She has also covered IT/Business Alignment and IT Security for IT Business Edge. Before becoming a freelance writer, Lawson worked at TechRepublic as a site editor and writer, covering mobile, IT management, IT security and other technology trends. Previously, she was a webmaster at the Kentucky Transportation Cabinet and a newspaper journalist. Follow Lawson at Google+ and on Twitter.