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Brain circuits

Understanding how to unlock value from your data

Published 6 October 2022 in Brain circuits • 2 min read

Digital transformation is most effective when firms harness the full power of their data. But what many companies don’t realize is that the type of the data they use is of key importance. While you don’t need to be a digital or data expert, as a leader you should take the time to understand the difference.

Two types of data

Digital transformation requires increasing the use of interactive as opposed to episodic data in existing business models. Episodic data stem from discrete events such as the sale of a product or the shipment of a component. Interactive data stem from continuous interactions, such as by browsing on Amazon’s site, conducting searches on Google, or socializing on Facebook.

Today, with the help of sensors and the Internet of Things (IoT), all kinds of firms can collect and use interactive data to generate new revenue streams and expand the scope of their businesses.

To avail of these new opportunities, however, firms must convert their existing customers into digital customers. These are customers who have transitioned from buying and using regular products to sensor-equipped products. By so doing, they have become valuable sources of interactive data. Building a strong base of digital customers is challenging yet doing so can go a long way in expanding a firm’s digital transformation scope and improving its returns on digital investments. My research shows how to achieve such results.

The exercise

 Think of the following questions:

  • Do you use sensors/IoT in your business?
  • Where do you use them? – in your value chain assets (e.g., machines or operations) or in your (customer-facing) products?
  • What percentage of your customers use sensor-equipped products?
  • What difficulties do you face (or anticipate facing) in developing sensor-equipped products?
  • What difficulties do you face (or anticipate facing) in getting your customers to adopt sensor equipped products?
  • What is your strategy to use such data?


If you haven’t previously considered how to use your data, these questions can provide a road map of what you should do to start: the sooner, the better. Your data is often the key to revitalizing an outdated business and transforming traditional products into digital platforms.

For a detailed look at how some major companies have used their data to offer a richer customer experience, and what you can do to expand into digital ecosystems, take a look at The Future of Competitive Strategy: Unleashing the Power of Data and Digital Ecosystems by Mohan Subramaniam. This book will also be featured in IMD’s November book club.


Mohan Subramaniam

Mohan Subramaniam

Professor of Strategy and Digital Transformation at IMD

Mohan Subramaniam is Professor of Strategy and Digital Transformation at IMD. He focuses on the digital transformation of incumbent industrial firms and new sources of competitive advantage in the digital age. He sets out his thinking on the topic in his new book, The Future of Competitive Strategy: Unleashing the Power of Data and Digital Ecosystems.


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