Using data for competitive advantage: how learning is the key

About this guide

We are living in a time of enormous economic and business change. Industries and markets across the world are increasingly dynamic and unpredictable: characteristics that create complex operating environments for organisations. Much of this change is the result of advances in digital technologies.

Digitisation is reshaping many aspects of business: from what organisations produce, to how they interact with customers, to how the fundamental economics of industries work. And in an increasingly digital economy, the rules of competition are changing.

Where traditionally organisations sought competitive advantage through business models that exploited economies of scale, concepts such as zero marginal cost economics are weakening these forms of competitive advantage.

To compete effectively in a fast-paced digital economy, organisations can start taking steps right now to put learning at the heart of how they operate. There are 10 steps recommended by Aurecon to set you on the path to becoming a learning organisation presented.

In this guide, we refer to learning as an organisation’s ability to extract insight from the data, information and experience available to them, and use it to improve their current operations or to create new value for customers.

We'll explore some learning theories and help you to understand why learning is so vital for organisations to thrive in today’s world. We'll then help ensure your organisation is ready to make the most of learning opportunities through our 10 recommendations.

The different scales of learning

The advance in digital technologies and their ability to achieve zero marginal cost production for organisations means that focusing resources on repetitive work to achieve incremental cost improvements is no longer a viable competitive strategy.

Instead, organisations need to strike a balance between two different types of learning:

1. Learning at an algorithmic scale that drives greater levels of automation and zero marginal cost production: An example in the built environment is Aurecon’s work with a large data centre operator to apply machine learning techniques to optimise cooling systems. As the cooling systems operate, more data derived from the system’s settings and ambient conditions helps reinforce and tune the machine learning algorithms. Ultimately this optimises the system’s energy use and reduces the operational costs for the operator. Aurecon's early results look to deliver a decrease in energy usage by 15 per cent.
2. Learning at a human scale that focuses on longer term trends, innovation and the creation of new value: The human knowledge and skills that create intellectual property and value for an organisation are depreciating assets. The lifespan of organisations is also declining. In 2017 a team of Credit Suisse analysts led by Eugene Klerk wrote that “the average age of a company listed on the S&P500 has fallen from almost 60 years in the 1950s to less than 20 years.” The impact is a “Red Queen Effect”, where organisations must run faster and faster just to keep pace.

Becoming a learning organisation

We present 10 recommendations for organisations to extract insight from data, information and experience available to them and use it to improve their current operations or to create new value for customers:

Develop a digital strategy that focuses on learning

Put available data to use

Digitise products and services

Standardise key tools and systems

Set up the right hardware and software architecture

Enable sharing of data and insights

Facilitate network effects

Digitise decision-making and automate suitable processes where possible

Incentivise and support new value creation

Re-evaluate your business model

Learning is vital in our digital economy

The digital age requires leaders to constantly consider numerous factors simultaneously: long-term and short-term goals, efficiency and creativity, machine and human capabilities. With increased uncertainty, pace of change and complexity, businesses now need to view learning as the key competitive advantage.

Every organisation must put learning at the centre of how they work and begin to re-engineer their business practices to enable it.

Aurecon’s Data & Analytics team works with organisations and governments to help them understand the power of data analytics to transform their business. Learn more

Aurecon’s Innovation team work to ensure that us, our clients, and our partners can better navigate uncertainty, anticipate change and take well-consider action. Learn more

Contributing authors & reviewers: Stewart Bird and Eric Louw.