Chris Brahm: Disruption in the Era of Advanced Analytics

In an age of technological disruption, companies need to start asking themselves: Where in my industry will disruption occur? Chris Brahm, who leads Bain's Advanced Analytics practice, discusses how to spot signposts of disruption across three areas: customer, cost and business model.

Read the Bain Brief: Predator or Prey—Disruption in the Era of Advanced Analytics

Read the transcript below.

CHRIS BRAHM: Disruption in the age of analytics is going to happen with increasing frequency. And the question every organization needs to ask itself is, Where is it likely to occur in my business? And how do I become the predator and not the prey in that scenario?

We see three patterns of disruption: cost, customer experience and business model, where data and analytics fundamentally can change the game. And you can look for signposts in each of those areas where there's likely to be disruption in your business.

In cost, look for areas of low-utilized resources, of misallocated resources, routine processes. You know, in the average enterprise, a data center, a server, is utilized less than 20% of the time. That can be solved by analytics.

The average enterprise salesperson might spend 30% of their time with customers -- and of the customers they talk to, might only close 10%. So if you think about it, you know, literally, more than 90% of their time is not spent on their mission-critical activity. That can be solved by analytics. Marketing. The majority of marketing spend you can't even tie back to any performance attribute. That can be solved by analytics. So cost is an area of tremendous innovation and disruption, where analytics are at the core.

Customer experience. If you just stop to think about what percent of customer interactions that you have with companies where they are incorporating and understanding of your value to them, your history with them, your preferences, and your specific intent in that interaction and in anticipating that and prescribing action as a result of that. That almost happens none of the time. That can be solved by analytics.

On the business model front, similarly, we are finding data and analytics enabling companies to leap from one market to the next. We've got mapping companies becoming autonomous driving companies. We've got autonomous driving companies becoming insurance companies. We've got insurance companies becoming asset managers. And data and analytics are the currency that are enabling those companies to trade up into a new market.

So whether it's cost, whether it's customer or whether it's business model, data and analytics are going to disrupt every market that is out there. And so as a company, you need to be looking for signposts in each of those three areas, so that you can be the predator and not the prey.

Read the Bain Brief

Predator or Prey: Disruption in the Era of Advanced Analytics

The signs that an industry is ripe for advanced analytics disruption are becoming clearer. So are the patterns that commonly follow.

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