1. This article originally appeared
in the 2011, No. 3, issue of
The journal of
high-performance business
Strategy Growth II
How Big Data
can fuel bigger growth
By Sumit Banerjee, John D. Bolze, James M. McNamara and Kathleen T. O’Reilly
I
n the right hands and handled strategically, the massive amounts
of information companies collect today can become a valuable new
asset. Players seeking additional organic revenue streams should
consider tapping their data trove to power a new information
services growth engine.

2. Strong growth remains a hallmark of a serious player in the new infor-
corporate success. But how do CEOs mation game.
move the needle on their already
huge, multibillion-dollar companies? Take the auto industry. Since many
vehicles now feature GPS and
Mergers and acquisitions can telematics systems, some car manu-
quickly add big chunks of value facturers have been able to collect
to an organization, but in many and monetize a wealth of data on
industries, attractive targets have customer driving habits.
become scarce. For mature industries,
untapped geographies and markets General Motors Co.’s OnStar telematics
are similarly hard to find. Using system, for example, not only
traditional cross-selling and provides vehicle security, information
up-selling strategies to generate base- and diagnostics services to drivers,
line growth? Been there, done that. it also captures telemetry data. In
2007, OnStar and GMAC Insurance
Instead, the answer may lie in one partnered to create an opt-in program
of the most valuable but underused that uses the telemetry data to offer
assets a company already has: its lower insurance premiums to custom-
customer information. ers who drive fewer miles. Thanks
to the program, consumers can save
Call it Big Data. With the rise of significantly on car insurance, which
digitization, established enterprises boosts GM’s customer satisfaction
in industries ranging from telecom performance. This, in turn, helps GM
and media to healthcare and finan- attract new OnStar paying customers.
cial services have amassed terabytes
of information about their legions In another example, in 2009,
of customers. This digital treasure American Express Co. launched an
trove, already highly valued as a way analytics and consulting business
to help meet the evolving needs of that draws on the purchasing be-
customers and spot trends, can help havior of its 90 million credit card
companies create new products and holders across 127 countries. This
services, and perhaps even spawn organization, American Express
entirely new businesses. Moreover, Business Insights, hopes to attract
a significant number of consumer- direct marketers by using proprietary
facing organizations have natural data to enhance customer acquisition
advantages in this area; for them, and retention programs.
leveraging Big Data represents a
particularly lucrative opportunity. Companies sitting on large amounts
of customer data—including insur-
Untapped value ance carriers, retailers, transporta-
Overall US demand for information tion companies and communications
services is expected to exceed providers—have a unique opportunity
$600 billion by 2015. to make this type of information
services play. With their direct rela-
As data-driven insights become tionships with millions of customers,
an increasingly critical competitive they typically have the most accurate
differentiator, companies will use and complete information on large
them to drive and optimize business sets of consumers. By contrast,
decisions across industries. In the competitors such as third-party
past, this market was largely limited information providers must rely on
to traditional market research and publicly available or purchased data.
data specialists, but today, virtually
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Outlook 2011
any company with a large customer Better yet, the cost to obtain the
Number 3 database can potentially become raw data contained in these compre-

3. hensive and often unique data sets revenues could be worth $1.7 billion
is virtually nonexistent, since the annually for card issuers by 2015, up
company’s core organization collects from roughly $100 million in 2010.
it in the course of doing business.
Likewise, third-party data aggregators
Using information services to and information services providers
drive growth requires a thorough such as Experian Information Solu-
understanding of what kinds of tions, Acxiom and Blue Kai collect
raw data exist in the organization. raw consumer and business purchas-
Armed with that insight, compa- ing information on tens of millions of
nies can then decide which tier consumers from a variety of sources,
of information value they should including websites, loyalty programs,
aspire to provide. self-reported sources, public records
and retail point-of-sale data. They
We use the Accenture Information then provide data, analysis and more
Value Pyramid to illustrate various to marketers looking to boost the
information service strategies. effectiveness of their advertising
The pyramid has three levels—raw and promotional campaigns. Other
data, insights and transactions. The customer data intermediaries exist
In some cases, govern- potential value and profitability in the catalog and specialty retailing
ment agencies have been of an information services business industry, where firms such as Abacus
depends in large part on the condi- Direct Corp. and I-Behavior collect
ahead of the curve in tion of the data the enterprise owns. transactional data to provide direct
recognizing the value of The base of the pyramid features
raw, less differentiated and thus
marketing services to members.
the raw data they hold. less valuable data. Moving up the In some cases, government agencies
pyramid creates larger revenue have been ahead of the curve in
opportunities, although these tend recognizing the value of the raw data
to be more difficult to execute (see they hold. The United States Postal
chart, page 4). Service, for one, sells a variety of
licenses, for up to $175,000 annually,
Providing raw data requires minimal giving organizations access to its
effort and calls for the least strategic National Change of Address database.
differentiation. It is the most common At the state level, Ohio, Illinois and
strategy but generates the least many others have collected millions
amount of revenue. As a strategy, of dollars over the years by selling
raw data makes sense in industries records containing personal informa-
with fragmented information and tion, such as that found on driver’s
where the sharing of information does licenses and driving records, to a
not put your business model at risk. variety of companies. Since 2005,
Ohio, for example, has sold nearly
A number of major US banks and 1.4 billion individual records—names,
credit card issuers have begun to sell addresses, dates of birth, driver’s
raw data about their customers’ debit license numbers and vehicle title
and credit card shopping habits— information—for more than $40 mil-
spending behaviors, the stores they lion. While Ohio is compelled to sell
frequent and what they buy—through this data at cost, other states such as
intermediaries such as Cardlytics. Oklahoma and Tennessee charge sig-
Retailers use the data to offer targeted nificantly more. At least one national
discounts via text messages or email, licensing agency in Europe made
and pay commissions that range from several million dollars selling driver
10 percent to 15 percent for each information during the same period.
customer who takes advantage of the
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discounts. A report by Aite Group Privacy is a paramount concern for
Number 3 projects these types of card-related these government data vendors. The

4. What’s your data worth?
Companies hoping to drive information services growth need to understand what
kinds of raw data exist in the organization and then decide which tier of information
value they should aspire to provide. We use the Accenture Information Value Pyramid
to illustrate various information services strategies. The pyramid has three levels:
raw data, insights and transactions. The potential value and profitability of an
information services business depends in large part on the condition of the data
an enterprise owns. The base of the pyramid features raw, less differentiated and
thus less valuable data. Moving up the pyramid creates larger revenue opportunities,
but these tend to be more difficult to execute.
Transactions
Transactions drive the
completion of end-to-end business
processes. For example, while insights
might reveal the best target-marketing
approach, transactions show how to
execute a full-fledged marketing campaign.
Increasing
Insights value of data
Firms perform value-added predictive and descriptive analytics
to extract key market and consumer insights from the data.
Raw data
Companies sell source data not yet in an easily consumable form. This requires
the least effort but offers the lowest amount of strategic differentiation and revenue.
Source: Accenture analysis
Ohio Bureau of Motor Vehicles, into Google Flu Trends, the company
for example, operates as an infor- has been able to change the game
mation vendor under strict rules regarding disease prevention. US
set out by the federal Driver’s public health organizations such
Privacy Protection Act. as the Department of Health and
Human Services can now act more
Providing “insights” requires more quickly to combat outbreaks through
effort and more strategic differentia- early detection. Beyond the United
tion, but also generates more revenue States, Google uses search patterns
than simply selling raw data. In the on dengue fever among users in
United Kingdom, supermarket giant countries such as Brazil, India and
Tesco sells data on the shopping Indonesia to alert health organiza-
behavior of its Clubcard users to tions to potential outbreaks.
retailers and big manufacturers
through a majority-owned shopper Data at the “transactions” level
information company—which in enables companies to execute their
2010 earned £53 million in profits. end-to-end processes better, and
could help improve point-of-sale
Several years ago, Google, taking retail transactions, marketing
a more altruistic tack, discovered campaign rollouts or fraud detec-
that an uptick in searches concern- tion. In some cases, a company’s
ing flu-like symptoms could be an data may be so differentiated and
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Outlook 2011
early indicator of flu outbreaks. By applicable to another industry that
Number 3 externalizing this search insight it inspires the company to venture

5. into a new industry and compete framework: promote consumer
effectively there. privacy throughout your organiza-
tion; simplify consumer choices;
American Express provides trans- and increase the transparency of
action-level value by running your data practices. The FTC also
marketing campaigns on behalf of provides best-practice examples
merchants, for example, and Google’s regarding the collection, storage
business model is based on its ability and use of consumer data.
to use search data to connect adver-
tisers effectively with potentially Companies, too, are looking for the
interested consumers. A number of responsible use of consumer data.
major US retailers infuse their brands For instance, Microsoft has called
with new competitive strength for cloud computing data security
through transaction-level data standards.
analysis. Working with proprietary
analytics platforms, these retailers New privacy legislation is pending
can externalize descriptive analytics in the United States, while other
in an easy-to-use interface. With countries have or are also creating
access to such data, brands can drive laws and regulations that address
targeted in-store campaigns more these issues. The United Kingdom, for
effectively, boosting sales. example, passed the Data Protection
Act of 1998, which outlines the legal
On average, as companies move up obligations that companies must
the information value pyramid adhere to when handling an indi-
from data seller to insight provider vidual’s personal information.
to transaction enabler, the value
they receive jumps significantly. In 2003, Japan passed the Act on the
Protection of Personal Information
More and more data-rich companies in response to consumer and social
are crafting strategies to climb the pressure to protect individual privacy
pyramid. As data storage costs drop in commerce. Full understanding of
and digital convergence provides new and com-pliance with the evolving
data collection sources, companies scope and details of such laws and
are using these technologies to gain regulations in response to the rise
a more complete picture of their of Big Data must become part of any
customers—a few of them seeking go-to-market strategy.
a level of omniscience that makes
some observers uncomfortable. Some companies are investigating
ways to compensate customers for
Consumer protection their data. In 2009, for example,
At the same time, government agen- Bank of America Corp. applied for
cies, consumer advocates and some a patent on the monetization of
companies have raised concerns personal information in an infor-
about the unethical sale of consumer mation bank that not only provides
data, exemplified by the GPS device customers control over their informa-
maker that recently apologized for tion but also enables them to receive
selling customers’ driving data to value in exchange for it.
local and regional governments in
the Netherlands that the police then This process can be configured in
used to set speed traps. a variety of ways. One version relies
on mobile devices and other technolo-
One approach to protecting con- gies along with a concierge service
sumer privacy proposed by the US to enable users to monetize their
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Outlook 2011
Federal Trade Commission offers information, which could include
Number 3 organizations a simple three-phase their personal recommendations

6. regarding products, services and the ability to take your own informa-
entertainment choices, for example, tion, combine it with other data and
as well as transaction data. Users can make it uniquely valuable via robust
adjust the device’s privacy settings analytics will be critical to success.)
to release their personal information
incrementally to others as desired. Concrete action
Once these questions are answered,
Differentiation through data companies can take concrete actions
This data-driven opportunity is to assess whether the opportunity
causing some players to consider bold is real or not and if pursuing it
strategic moves that can set them makes sense.
apart from the competition and
provide vital new revenue streams. First, a company needs to assess
the industry applications for which
The value of a company’s information its data would be relevant. These
hinges on its ability to differentiate typically span the decision sciences
itself in the marketplace in terms of and could include marketing, risk
information scale and data scarcity, management, and research and
and on its capacity to combine development. But some types of
differentiated elements with tradi- data could also help to drive better
tional sources of information using operational effectiveness and
data management and analytics manufacturing performance.
capabilities. So before launching a
new information business, leaders Having chosen the appropriate
need to address three fundamental applications, a company should
considerations by answering the methodologically analyze the
following questions. attractiveness of its information
compared with that offered by
Information scale. Do we have current incumbents. Knowing how
enough information to differentiate your information could drive cost,
ourselves in the marketplace? (Having quality or responsiveness benefits
a customer base in the hundreds of in a market can provide insights
thousands is not enough in an age into whether your offering will
where some companies count heads fit in with or disrupt the existing
in the tens of millions.) information value chain.
Data scarcity. Do we have data One effective tactic involves vali-
elements that are difficult to dating your information services
replicate in the marketplace? strategy by discreetly contacting
(Leaders should determine if the potential strategic customers. In
company’s core business creates addition to providing possible price
effective barriers to third-party points for various data products,
data collection and whether other this contact can help the organiza-
businesses can collect alternative tion build its credibility in what are
data that would serve as a substi- probably new markets.
tute of comparable value.)
The next step involves understanding
Data blending and analytics. Can capability gaps. Companies often
we combine our data with infor- lack important capabilities or assets
mation from others and then use they will need to win business in
sophisticated data analysis to create the information services arena. As
differentiated products? (No single a result, even an organization well
organization has all of the data it positioned with a uniquely valuable
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Outlook 2011
needs to meet the demand for infor- information-based offering has to
Number 3 mation services products; as a result, recognize that it may not have the

7. For further reading skills, resources and systems in place launching these products. Because
it needs to collect, store, analyze or the information services business
“How to turn data into a strategic monetize the data. is evolving rapidly, winners are
asset,” Outlook 2010, No. 2. usually those that are fastest
Additionally, companies must assess to market. Leveraging an agile
For this and other articles, please visit the legal, privacy and policy impli- prototyping process will not only
accenture.com/Outlook. cations of monetizing information improve a company’s speed to
assets. One suggestion: Look to market, it will also enable it to
other information services entrants align with the potential strategic
and industry bodies for best practices customers identified earlier. These
on how to comply with regulatory customers can provide invaluable
requirements and provide trans- help in shaping the product, tailor-
parency to customers. ing it to meet the exact business
challenges targeted customers face
Yet another consideration involves and boosting the odds of market
the go-to-market approach. Do you adoption upon product launch.
assemble the data for off-the-shelf
catalog sales, establish a dedicated Executives often find it difficult
sales team, develop a key account to value opportunities within the
management approach—or all three? information services landscape due
The choice will depend on the to the intangible nature of pricing
number and types of customers products that primarily aid deci-
interested in purchasing your data, sion-making activities. While raw
its assessed value and the amount data, insights and transaction-level
of value-added you plan to offer on information provide the rootstock
top of the raw numbers. Ultimately, onto which companies graft their
companies need to decide whether strategic visions, assessing the
the Big Data prize is big enough value of these assets can be a chal-
to warrant the creation of specific lenge, since the “product” often
sales capabilities. offers different levels of value to
different organizations. As a result,
Finally, companies should follow companies should experiment with
an accelerated product design value-based pricing techniques to
and prototyping approach when arrive at equitable terms.
While other competitive “essentials” fall in and out of fashion, growth remains
the defining measure of business success—it’s how markets assess companies
and leaders gauge their performance against peers. But achieving adequate
growth in today’s often-difficult competitive environment means everyone
and everything in an organization needs to work harder than ever. Companies
endowed with massive amounts of customer information can use it to
supercharge their growth engines, potentially making Big Data a very big
deal indeed.
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8. About the authors
Sumit Banerjee is a senior executive in Accenture Strategy. He works with com-
munications and high-tech clients in North America and Asia Pacific, helping them
develop innovative growth strategies, improve operational performance, undertake
MA activities and launch new businesses. Mr. Banerjee is a recognized thought
leader and winner of the Accenture Ken Ernst Innovation Award. He is based in
Washington, D.C.
s.banerjee@accenture.com
John D. Bolze is a senior executive in the Accenture Communications High Tech
industry group. With 16 years of experience leading teams in delivering a wide
variety of management consulting services to this industry, Mr. Bolze focuses on
new growth strategies, launching new ventures and deploying analytics across all
business functions. He is based in Washington, D.C.
john.d.bolze@accenture.com
James M. McNamara is a New York-based manager in Accenture Strategy. He advises
media, communications and information services companies on product strategy,
monetization models and driving profitable growth in the digital space.
james.m.mcnamara@accenture.com
Kathleen T. O’Reilly is the global managing director for Accenture’s Communications
High Tech Strategy group. During her 21 years in the communications and high-
tech industry, her work has focused on advising on a broad range of strategic issues,
Outlook is published by Accenture. including growth and marketing strategy, new product development, new business
© 2011 Accenture. model creation, and operational and implementation concerns. Ms. O’Reilly is based
All rights reserved. in Philadelphia.
The views and opinions in this article kathleen.t.oreilly@accenture.com
should not be viewed as professional
advice with respect to your business.
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are trademarks of Accenture.
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For more information about Accenture,
please visit www.accenture.com
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