Monday, June 17, 2013

Digital Transformation, Code Halos, Analytics and Mobility

A retailers' mantra throughout history has been location, location location.  This is always important, but perhaps of less value than other innovations caused by digital transformations today. The ongoing digital transformation of many industries has created new competitive playing fields that are increasingly related to data.  The winners are those that can more quickly collect, analyze, report, make data driven decisions and capture value from the data.

The data that surrounds customers, partners, companies and individuals is called "code halos™" by my colleagues at the Center for the Future of Work in their new whitepaper Code Rules.  It is their analysis that companies that understand and manage code halos most effectively will be the winners in their industries.

Let me paint two scenes for you.

1) A brick and mortar retail operation is located on Main street, advertises in the local newspaper and via the Yellow Pages.  Greets their anonymous customers at the door with a cheerful "hello" and waves goodbye when they purchase their products from the store.  The store does not know or track their customers' names, preferences or the products they purchase.

2) A brick and mortar retail operation recognizes the value of being on Main street, but also in having a strong web and mobile presence, tracking their customers via loyalty and opt-in online/mobile marketing campaigns and providing customized experiences and marketing that meet the preferences of each individual customer based on collected and analyzed data.  As a result, they have mobile apps, websites and enable customers to document their preferences, likes and favorites.  Each customer has an account that enables the retail store to see their personal details and track their purchases, interests and buying habits, etc.  The retailer analyzes the data, and then provides a customized and personal buying and marketing experience for them.

This is a simple illustration of the differences in how retail companies may engage their customers before and after they recognize the value of code halos.  Store number 2 recognizes that each customer has a code halo of data about their demographics, buying habits, history, preferences, neighborhoods, lifestyles, etc.  Store number 2 collects the data and uses the data to improve their marketing and customer engagements, while store number 1 does not.  Which store do you think is going to be more competitive?  I believe store number 2.

In most military organizations today, they believe the effective use of data or the "Fifth Dimension" of warfare is critical.  The first four dimensions are land, sea, air and space.  Recently the fifth dimension has been added to emphasize that organizations and nations must now learn to effectively use data defensively and offensively in times of conflict.  Military organizations, much like companies in the commercial sector, must now compete in the fifth dimension and the management of code halos.

Recognizing the importance of code halos and the fifth dimension of warfare is not enough, however.  Organizations must employ what is called a "logistics of information" systems capable of supporting a competitive environment.  This is not easy.  Store number 1 mentioned earlier does not have a code halo strategy or the logistics of information system in place to be competitive.  They are not even capable of putting a team on the field.

What must be included in order to successfully employ an effective "logistics of information" system that can process and utilize code halos?  Let me list a few:
  1. Effective data collection strategies - often in the form of mobile apps, loyalty programs and online commerce sites that enable a customer to opt-in to various programs, campaigns, preferences and deals.  This is how you begin to add to and harvest useful data from your customers' code halos.
  2. The ability to recognize a unique customer, their code halos and to cater to their preferences and customize their marketing and buying experiences based on analyzed data.
  3. The ability to recognize patterns, find meaning and to spark new ideas and innovation by analyzing multiple code halos is valuable.  Here is an example - Store number 2 recognizes that a sub-set of their customers' all share similar code halos - product preferences, lifestyles, demographics and buying habits.  Store number 2 also has visibility into the code halos of their suppliers' products, brands and target customer profiles.  As a result, Store number 2 can introduce new marketing campaigns and products that very closely align with the preferences and tastes of their individual customers and sub-sets of customers.
  4. Following each marketing campaign or program roll-out, the data is analyzed and optimized to improve precision and future results. 
These four steps require an effective "information logistics" system.  Do you have it?

Kevin Benedict, Head Analyst for Social, Mobile, Analytics and Cloud (SMAC) Cognizant
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Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and SMAC analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.