Data is an unusual asset – it doesn’t deplete, it doesn’t wear out and it can be used across an infinite number of use cases at near zero marginal cost. Organizations have no other assets with those unique characteristics. And while traditional accounting methods of valuing assets works well with physical assets, account methods fall dangerously – short in properly determining the economic value of data. At TSI, instead of using traditional accounting techniques to determine the value of the organization’s data, we apply economic and data science principles to determine the economic value of the data. We based this upon its ability to optimize key business and operational processes, reduce compliance and security risks, uncover new revenue opportunities, and create a more compelling, differentiated customer experience. The data lake, which can house both data and analytic models, is transformed from a simple data repository into a “collaborative value creation platform” that facilities the capture, refinement and sharing of the data and analytic digital assets across the enterprise.
Five rules of data monetization:
- Understand the role and value of data in your business
Good data management is about ensuring you have the proper data to support your business and improve performance. Smart data utilization also helps in managing risk and provides assurance that the business is compliant with laws and regulations. However, this can only serve this purpose effectively if you know where your data resides and how relevant it is and how valuable it could be. Often companies fail to accurately value their data because it is not strictly accounted for as an asset even though it has real economic value in external markets. - Get your data house in order
Too many companies lack metadata – i.e. data about data – such as the data quality, where it’s stored and what it means. In fact, many companies are more likely to have a more detailed inventory of their office furniture than their own data. Before thinking about monetizing data, companies need to discover what kind of data they hold about their partners, customers, products, assets, or transactions and what publicly available data can be called on to increase the value of their proprietary data. They must also work out whether that data is of value internally to cut costs, streamline operations or improve sales processes, or as an external revenue stream such as customer intelligence as a service, or both. - Embed data monetization into business strategy and get the right structures in place
Too often corporate strategy is not supported by related data management initiatives and vice versa. Executives should evaluate their key business goals and strategic initiatives through the lens of how data can support them. Once you understand the quality of data and have tied it to business strategy then you can put the right structures in place to monetize it. Often this involves assembling a multi-disciplinary, cross-functional team – including information product leads, data management experts and executives from sales, marketing, and operations – to create a platform for business innovation powered by the data. - Be open to new opportunities
The potential for data to deliver value for many parts of the business is enormous. Sometimes, though, it’s hard for companies to imagine quite what the opportunities could be because they are so used to pursuing growth through established strategies and revenue streams. That’s why all companies should be open to learning from other businesses and partnering in ways that make sense from a data point of view. - Communicate data’s value internally and externally to foster growth
Monetizing data is still a relatively new experience for many organizations, and even when successful initiatives are in place they aren’t always known to the business. As data becomes more and more important, companies will need both to communicate and educate internal and external stakeholders so they fully grasp the value data can deliver.
Contact our experts at info@thoughtstorm.ca to know more about the right data monetization approach for your organization and visit www.thoughtstorminc.ca to know more!