By Vinay Nathan, Co-Founder & CEO, Altizon Systems
Software is a pervasive presence in almost all our daily activities at home or in the workplace. The Internet of everything that has enabled this pervasive computing is now driving a wealth of information about the physical world to enterprises. Enterprises today aim at leveraging this information to gain specialized knowhow. This knowhow is an outcome of proprietary data working on proprietary Deep Learning algorithms. They yield the kind of competitive advantage that can drive digital disruption of an entire market place. It is this phenomenon that is giving birth to what is termed the Algorithm Economy.
The Algorithm Economy helps enterprises in these fundamental ways.
Know Your Customers Better
Enterprises today can build connected smart products that can keep telling them how their customers are using their products. We already are aware of how smart phone vendors and application providers have built entire ecosystems around mining every click and choice a customer makes to better understand their behavior. This helps them build better products and service their needs better. Now take this same concept and apply it to every thing imaginable being smart and connected. Think of a washing machine manufacturer having data from millions of machines with actual usage data of sophisticated settings, wash cycles and other usage metrics. Sifting through this data with advanced analytical algorithms can yield usage patterns that cannot be learnt through traditional marketing techniques. This proprietary knowhow can then be leveraged in many ways.
This new data stream can lead to customer segmentation around usage patterns that are derived from accurate automated data collection. Existing models of customer segmentation can also be further enhanced to incorporate these usage patterns. A smart connected product can also potentially allow for an interactive communication channel directly with end consumers of a product.
Know Their Operations Better
As enterprises get this deeper knowhow about their customers they can use it to drive changes in the way their business functions operate. The first area of change is the field operations and customer support functions. A deeper insight into how their products are used helps support personnel more effectively address support issues that arise. The transformative customer experience is further enhanced when the usage patterns are analyzed with deep learning algorithms to anticipate outages and other customer needs. A pump manufacturer set out to make a large portion of their deployed pumps smart connected products. They utilize data collected from sensors in their pumps to receive a continuous event stream of their vital parameters. The pump manufacturer also sets up a separate team to codify knowhow in their CRM systems and Quality Assurance functions as feeds into advanced trending and feature extraction algorithms. They combine this event stream with proprietary knowhow on the functioning of these pumps to drive a huge impact on the bottom line of their field operations. They also now have the ability to forecast demand on their spare parts and associated consumables. This is a perfect example of how proprietary data assets merge with proprietary algorithms to yield a competitive advantage.
Launch New Products and Offerings
Disruptive new companies like Uber are the most visible examples of the algorithm economy. Automated engines for dynamic pricing, resource assignments and user feedback power these companies. Every company can re-imagine its products and offerings to embrace this revolution. Setting up IoT infrastructure with connected smart products is a vital step towards beginning this digital transformation. This may lead to new digital products that open up newer markets or help preserve positions in existing markets.
A new revolution has begun unfolding and enterprises that embrace it can leapfrog into this Algorithm economy.