Observing service providers’ much talked about efforts to provide new levels of value and create new growth opportunities through big data and analytics reminds me of a quote often attributed to Yogi Berra, the great NY Yankees coach. “In theory it’s simple, in practice it isn’t.”
Yogi captures, as only he can, the timeless truth that sometimes things that are obvious and easy to articulate are very hard to execute. Those of you who play golf will immediately recognize the power of this observation. The service industry’s collective experience with big data and analytics is causing a lot of service providers to also identify with this Yogism.
Service providers have been quick to recognize the potential for big data and analytics to change the game in their increasingly commoditized offerings and have made substantial investments in talent and tools they hope will be important in applying these new sources of value to their customers. In a cursory analysis these efforts are encouraging and yielding fruit. The providers continually talk about it to customers and crow about the rapid growth they are seeing in these areas.
But upon further reflection we see mostly a set of tools and capabilities with a lot of hype but disappointing total revenue given the amount of attention and hype. We find that the growth comes off a very small base and amounts to a small total revenue.
The use cases the providers use as examples are few, and they use the same use cases or case studies again and again. Plus the case studies are very industry and company specific and therefore are not easily repeated across the customer base. Basically these are one-off solutions that don’t lend themselves to broader industry application.
Big data and analytics are powerful and obvious in terms of their impact. It’s simple in theory. But in practice it’s difficult to build large big data and analytics revenue streams.