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01 Jul 2016

Research: Creating Value from Digital Data Streams

Federico Pigni, Professor at Grenoble Ecole de Management

The big data era is upon us. Startups, major companies, organizations and governments are all rushing to extract essential insights from big data. Yet in doing so, many have overlooked the potential value of the digital data streams (DDS) that make up big data. These live streams offer innovative opportunities for value creation.

This article from Federico Pigni is the subject of the 27th  GEM LAB Executive Summaries.

The digital data stream

From the article

Digital Data Streams : Creating Value from the Real-Time Flox of Big Data
California Management Review – Vol.58, NO. 3, pp. 1 – 21 –
DOI: 10.1525/cmr.2016.58.3.1.
Federico Pigni, Gabriele Piccoli, Richard Watson

Every time you send an email, visit a website, tap an icon on your smartphone, run with a smartwatch or Instagram a picture of your food, you create a digital representation of an event. As technology evolves, the possible sources of DDSs appear to be limitless. To help managers understand the nature of their data, the researchers suggest that DDSs can be described in terms of six basic elements: who, what, when, where, why and how.

Who can be a customer ID number or the RFID on a delivery pallet. What can be a reference number for an item in a store or the fact a ship has docked. When can be a timestamp for a twitter post or a time zone. Where can be an address or precise GPS coordinates. Why can be a birthday gift or vacation plans. How can be a credit card for payment or the status of a flight. By splicing together DDSs, you can rebuild an entire episode and thus extract powerful insights about an event.

Capitalizing on a specific stream

As more DDSs emerge, managers must consider new tactical and strategic opportunities. Of first importance is considering an event's streamability. Can you detect the event? How precisely can you measure it? Can you interpret the stream's content? How much must you invest to make an event streamable?

Once managers have identified a highpotential streamable DDS, the researchers highlight two possible tactical moves: using the DDS for immediate action (process-to-actuate) or using it to draw more powerful insights (assimilate-toanalyze). DDSs can also be used strategically to design new value propositions.

Five paths to value creation

Following the analysis of 70 organizations that innovatively capitalize on DDSs, the researchers underline five avenues for potential value creation: (1) generating a new DDS, (2) collecting/repurposing various DDSs to offer aggregation services, (3) leveraging DDSs to provide new services or improve existing ones, (4) optimizing internal operations via DDSs, and (5) enhancing decision-making or improving understanding.

Assessing organizational abilities

Based on previous studies, the researchers suggest organization require four abilities to profit from DDSs (mindset, skillset, dataset and toolset). Mindset refers to the culture, strategy and willingness to develop DDS initiatives. Skillset refers to the ability to use resources to extract value from DDSs. Dataset is the ability to identify DDSs worth pursuing. Toolset is the capacity to use the appropriate technology for a DDS initiative.

A retenir

  • Digital data streams (DDS) provide tactical and strategic opportunities.
  • When creating a DDS initiative, companies must consider the event's streamability.
  • Tactical opportunities include process-to-actuate and assimilate-to-analyze
  • Strategic opportunities include the generation, collection, manipulation and repurposing of DDSs to create or optimize services, improve operations, or revolutionize decision-making.
Contacts
Mara Saviotti