How IT Can Help Uncover New Products

IT Departments Have The Data Needed To Uncover New Products
IT Departments Have The Data Needed To Uncover New Products

“Alignment”, “Innovation” – arrgh! Who in the world of IT is not sick of hearing these two words used over and over again? Yes we’d like to be able to help out the rest of the business, but our IT budgets are being slashed left and right. We don’t have either the staff or the budget to launch a big new program to collect whatever data is needed in order to tell the company which direction it should go in. Or do we?

It is in the nature of any IT department to collect data on our customers. We already have disk pack after disk pack of historical data about everyone who ever showed even the slightest interest in one of our company’s offerings let alone how much information we have on our existing customers.

In that data lies the secret to how IT departments can help the rest of the company uncover new products. Ranjay Gulati, James Oldroyd, and Phanish Puranam are three researchers who have been studying this problem and they’ve made some interesting discoveries.

Harrah’s is an owner of several casinos. Their IT department has historically collected reams of data on their customers in order to support targeted direct mail campaigns and attempts to increase customer loyalty.

However, it was not until the IT department took a closer look at the data that they had already captured about their big spenders (“whales” in casino speak) that they realized that they had the answers that they needed in order to redesign their casinos in order to position games where they would get these customers to play even more.

The Royal Bank of Canada faced a problem – its consumer credit division  needed to have more customers. The IT department went back and took a look at the credit card applications that they had rejected in the past. What they discovered is that many of these people had improved their credit scores since being rejected. This gave the bank a great set of potential card holders to go after.

Clearly all IT departments are sitting on more customer data than anyone ever believed. Now we just have to figure out how to make that data work for us. It turns out that there are three principles that provide the core for doing this correctly. We’ll talk about them next time…

Does your IT department store enough information on your customers? Have you ever gone back and tried to put that data to use? Were you successful? Leave me a comment and let me know what you are thinking.