Government Data for Business Innovation

GOVERNMENT DATA FO R BUSINESS INNOVATION IN THE 21ST CENTURY 2With all the recent attention to big data and advanced analytics, it is easy to forget that businesses have been using data to create new insights and innovation for centuries. Fast forward to the 21st centurywhere the legacy of business intelligence is now strengthened by government data. Within the past decade, governments have started to publish massive troves of freely accessible data and businesses operating all over the world are finding that analyzing government data together with their own data sources can transform their strategies and operations. Coined in 1865 by Richard Millar Devens in his Encyclopedia of Commercial and Business Anecdotes, the term “business intelligence” was first used to describe how a 17th century banker, Henry Furnese, achieved an advantage over his competitors by collecting and analyzing internal and public information relevant to his business activities. By organizing this information in a structured manner, Furnese was able to maintain a “complete and perfect train of business intelligence.” 17thCentury21stCentury 3CVS Health developed an online tool called myhealthfinder that uses government health data to provide consumers with personalized recommendations for preventive healthcare services, based on age and gender. By collaborating with the U.S. Department of Health and Human Services (HHS), CVS Health leverages government data to connect consumers with a range of useful services, including vaccinations and screening tests, which are available at CVS Minuteclinic and CVS Pharmacy locations.Starbucks collaborated with Esri, a geospatial technology company, to develop a business intelligence system called Atlas. This data-driven platform uses government demographic data, government weather data, and proprietary sales data to develop highly sophisticated consumer marketing strategies. For example, Starbucks uses demographic data on the number of local smartphone users to determine where mobile app discounts will be most impactful. Starbucks uses weather data to synchronize Frappuccino promotions with rising temperatures.Best Buy developed an innovative market segmentation strategy using government data that was key to growing the consumer electronics brand. Using a combination of government demographic data and proprietary sales data, the strategy uses advanced analytics to define and group consumers by personas, with names like Barry, Jill, Buzz, and Ray. Each persona represents a different consumer segment with specific buying habits. For example, Buzz is the ‘young technology enthusiast’ while Jill is the ‘suburban mom’. Best Buy used these data-driven profiles to restructure its in-store and online experience, which together helped to reinvent the brand to meet the needs of 21st century consumers.A few examples:STARBUCKS TRUE LOGOS. GENERATED BY CHI NGUYEN (CHISAGITTA) 4GOVERNMENT DATA ENABLING ECONOMIC GROWTH ACROSS ALL SECTORSIn July 2017, the Center for Open Data Enterprise and the U.S. Executive Office of the President Office of Management and Budget (OMB) co-hosted a Roundtable on Open Data for Economic Growth, which brought together nearly 80 participants from the U.S. federal government, business, nonprofits, and academia. The Roundtable confirmed that many businesses depend on government data to guide business investments, develop new products and services, and foster innovation, and produced new case studies showing how they are putting this data to work. One compelling case study came from the Kellogg Company’s Vice President and Global Lead of Data Acquisition and Governance, Rick Davis.How the Kellogg Company Innovates with Government DataThe Kellogg Company, an American multinational food manufacturing business, known for its famous breakfast cereals and snack brands, is a leader in its use of government data to improve operations and spur product innovation. Many businesses follow a problem-centric approach to government data use, combining proprietary data with publicly available data to address existing organizational challenges. Other businesses like the Kellogg Company also use a discovery-centric approach, which allows their data analytics team to identify new correlations and trends by fostering intellectual curiosity. Together, these data-driven approaches help the Kellogg Company generate increased revenue, reduce costs, and better meet customer needs. 5According to Davis, there are four key steps of the process that Kellogg uses, and that any company can use, when applying government data for business decisions:FORMULATE THE QUESTION AND HYPOTHESISFor example, data scientists at the Kellogg Company used government data to explore the impacts of cold weather conditions on consumer spending behavior. The process begins by formulating a business question and a hypothesis that can be tested by data analysis. The question could be: “Is the harsh winter affecting our consumer sales?