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Adastra has been involved in data storage, processing, cleaning, analysis, and business use for over a quarter of a century. We asked our colleagues - Dagmar Bínová, who leads Adastra's Big Data and Data Science team, and Martin Bergner, an expert in Data Governance - about the trends, changes, and developments they have seen while working on numerous projects in the banking, insurance, telecommunications, manufacturing and government sectors during their many years at Adastra.
How do companies work with data today? Can they mine this resource and translate it into concrete financial benefits? Has the approach of companies and organizations to data changed in the last 25 years?
DB: On the positive side, data literacy is generally growing in companies. Enough people already know they need data, so they often collect it manually. But the complicating factor is that data in companies is inconsistent, systems are not connected, fundamental changes are not tracked, and updating customer data such as address changes, names, and credit cards is cumbersome. However, many of you may find this surprising.
Also, often one department doesn’t know that another is already collecting similar data, they don’t know how to share the data, and a proprietary relationship with the departmental data prevails. In general, a data strategy is often lacking. No one knows what data exists in the company, what it is used for, or has a plan to improve and add to it.
So we can say that working with data has generally improved. But how far along are organizations automating data handling processes, for example?
DB: The lack of data handling is often due to much manual work or a “primitive approach,” which means that even the processes to serve the client are manual or semi-automated, cumbersome, and often take a long time. Firms with higher-level data can afford automated processes that reduce the human labor involved in client check-in. As a result, the client is checked in almost in real-time and doesn’t have to wait until the next day (before going through overnight processing) or before someone reads their email, request, order, etc.
With automation, companies gain people time to work creatively and strategically.
Let’s move from technology to business when customer communication is mentioned. How do you see the trend in personalized touch and offerings? Companies can only provide it to their customers based on data. Or is it different?
MB: Personalisation of offers is a reality that has much potential. From an end-customer perspective, this can be perceived very positively. This approach can provide relief in the flood of different offers they are currently inundated with because something relevant to them is vying for their attention. But on the other hand, in their eyes, the bid may prove that they are not as in control of their privacy as they thought.
Will this put customers off, or will they say that’s the way it is everywhere these days and privacy is not that big a deal?
MB: The important thing is the attitude of companies, whether they want to address the needs of their customers with their offerings or whether customers are just customers of their products and services. Working well with data is a prerequisite for getting to know customers but not a sufficient condition for gaining their loyalty.
If you know your customers, you can go that necessary second mile with them, which many will appreciate. However, poor data handling will deprive these companies of that opportunity or, at the very least, make it very difficult to get there.
This goes back to compelling and legitimate data collection and interpretation of relevant data. What advantages do firms gain with these data over competitors who have not yet taken similar steps?
DB: Quality data allows for better analysis to help managers make decisions based on the reality presented in the data; they no longer make decisions intuitively but trust the numbers.
The business can be done faster, more reliably, personalized, and automated at an operational level. In addition, targeted communication with clients can lead to multifold success, e.g., when we were able to identify parents of schoolchildren in one bank thanks to client analysis, we approached them with the right offer at the right time, and the interest in the request increased ten times.
MB: It’s an opportunity to differentiate yourself from other companies and win the favor of your customers. Your customers will know you – differentiate you from others because of the specific positive experience they have with you. There’s nothing like having happy customers. So let’s leave aside the discussion that your product or service is quality.
Let’s base it on your experience. What are Czech companies’ biggest mistakes when collecting and working with data?
DB: Individual departments often make decisions about data collection at their discretion. No data architect in the companies advises them on avoiding missing something or recognizing valid and invalid records, clients, and products.
Returning to personalized offers and communication, multiple departments are involved in communicating with customers: marketing, sales, branch or store staff, managers, etc. Although they do not work with data in a unified way, they do not have a concept of how, with what, and when to reach out. This needs to include preferred communication channels – which is better to call, who to email, and whom to send an SMS or notification to. How not to overwhelm the customer and at the same time communicate sufficiently.
MB: The overall strategy is important, how the company wants to work with data, from which sources it wants or can get data and how to combine them. Subsequent sub-steps, the implementation of specific use cases of selected data, must only build on this strategy. At the same time, this data strategy must not be divorced from the financial reality. For example, building a unified customer communication system across different communication channels is a challenging infrastructure project but one that has great potential to support the collection of very valuable data. The question then becomes when or depending on the size of the company, its turnover, or customer base, such an investment is worthwhile and when it is more appropriate to only try to support a specific sub-case in isolation.
How far behind are companies that have not invested in data systems and their management? Will they catch up with the runaway train, stay on the platform or perhaps jump on a different vehicle altogether?
MB: It’s never too late to start. However, not being prepared means you can’t take advantage of certain opportunities. Tougher conditions don’t mean there aren’t opportunities. They just may be opportunities of a different kind. If a company has invested before, the ready infrastructure can be used, and the cost of starting a new type of opportunity is “already marginal.” For example, if a company has built up consolidation of customer information from previous projects from different source systems, then adding a new data source and using it for the next use case is significantly easier than building the entire infrastructure required and the associated customer management processes.
DB: Today, people often learn as they go. Little is invested in their continuous development, and they often don’t have time to stop, reflect, and lay out their next steps conceptually. Companies systemically lack sufficient focus on innovation. Setting up an innovation department and managing the whole company to function innovatively is one thing. A typical example of this is the requirement of the management to have beautiful and modern reporting. Still, unless they invest in data quality, the investment in reporting is often futile.
For me, a beautiful example of an innovative company is Rohlik. It invests in new practices and is dedicated to processes to make it as easy as possible for people to buy. It constantly works with modern technology to improve, make it more convenient, and often simplify processes. She’s not afraid to occasionally experiment, try things out, or admit that something didn’t work out. In the Czech Republic, the discussion often prevails as to why not to do something rather than to take it up.
Speaking of e-shops, how do you see their future? Will they invest in development and data, or will the advent of marketplaces defeat them?
MB: I dare not speculate :-). Using shared, pre-made platforms can reduce the cost of entry, which is certainly tempting for smaller e-shops. But at the same time, the e-shop in question gets lost in the crowd of other platform participants. So, the extent to which individual companies make an effort to build a brand that customers will know will play a big role.
DB: In the market in general, not just in the online shopping or retail segment, simplicity, intuitiveness of use, and speed are winning today. Those who don’t invest in these key elements are missing the train.
Thank you for the interview.