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02 May 2022
Why datagraphs are your future
Data managementReporting research findings
Businesses need to move beyond using data to simply improve operational efficiency and recognise the competitive advantage of datagraphs, maintain two US academics.
Why it matters
Writing in the Harvard Business Review, Vijay Govindarajan (Dartmouth College’s Tuck School of Business) and N. Venkat Venkatraman (Boston University’s Questrom School of Business), argue that datagraphs will reshape competition in every sector – and sooner than many people expect.
That means upgrading data architecture to give a real-time, comprehensive view of how consumers interact with a company’s products and services and so enable the development of new and unique ways to solve customer problems.
What are datagraphs?
Datagraphs, inspired by social network and graph theory, “capture how people work, play, learn, socialize, transact, travel, and do any other activity that can be associated with commerce,” the authors explain. They can be used to personalise customer recommendations, update products, optimise advertising, and more.
Examples include Amazon’s purchase graph, Google’s search graph, Facebook’s social graph, Netflix’s movie graph, Spotify’s music graph, Airbnb’s travel graph, Uber’s mobility graph, and LinkedIn’s professional graph.
All leverage the ongoing collection of customer engagement data, coupled with proprietary algorithms, to outcompete rivals in every way, from product creation to user experience.
Steps to take
Amazon and Facebook may be daunting examples but “a successful strategy isn’t solely dependent on having large volumes of information”, the authors reasasure. “It’s about collecting relevant product-in-use data in real time to achieve data network effects and build advantage.” (Personalised fashion service Stitch Fix is an example.)
Begin by developing a datagraph strategy and understand how your data offers a unique advantage to your business.
Develop proprietary algorithms, while benchmarking these against others in your industry and against others of its class.
Engender trust by explaining what you’re doing and using language that consumers can understand.
Update the organisation with necessary resources and talent and a balanced internal structure.
Monetize your datagraph – use it to shape design and manufacture of products, solve customer problems, open new revenue streams.