Isn’t It Time Data Became the New Currency?
As more and more organisations seek to convert information into insight, might we be forgetting the need to convert information into profit, too?
Today, the vast majority of businesses needs to be able to adapt quickly in response to a sudden change or volatile event, and this means having access to the right data, at the right time.
Recently, we’ve seen a plethora of business cases focused around extracting more and more value out of data, and many organisations have made room in the C-suite for Chief Data Officers to better manage the data that in many cases, is now being treated as a business asset. Organisations recognise that they need to turn information and data into insights that can inform business decisions, and a vast majority of businesses have completely re-framed their thinking around data.
However, now at the next stage of digital transformation, the most agile businesses also recognise the need not only to turn information into insights, but into profit, too.
Data monetisation, in its most basic form is the process of turning corporate data into currency. To achieve this, organisations can opt for a direct data monetisation practice e.g. selling or trading data or they can use an indirect data monetisation approach such as using data to form the foundation of a new product or service. Either way, the end objective of turning data into a currency remains the same.
For years, organisations all over the world have been selling and trading data in order to bring a new revenue steam into their business. However, with the introduction of tighter legislation’s, new challenges are being introduced, making the sale of data even harder. Furthermore, a recent survey found that whilst many companies are becoming increasingly data-focused, few have achieved significant financial impact.
In order to effectively monetise data, companies need to balance and source the right combination of strategy, culture and organisation. Many companies still lack a data strategy, even when the requirement for one has never been more insistent. Even those who recognise that data has affected their business practices in at least one way have only really reacted to these changes on an ad-hoc basis, rather than trying to create a long-term strategy. Across the majority of industries, most companies state that their primary objective of their data is to generate new revenue, and so the need to have the all three of these core data monetisation ingredients balanced is crucial.
Intriguingly, the need for data monetisation is also more prevalent in certain industries. In a recent survey conducted by McKinsey, more than half of the respondents in basic materials and energy, financial services, and high tech say their companies have already started to monetise the data stored within their business.
For those businesses who recognise the need for data monetisation, but don’t perhaps no how to approach an initiative of this scale in their organisation, our top tip would be to look outside your organisation for innovation and consider how you might build a data ecosystem of partners and analytics companies to help you on your journey. Furthermore, equally important is committing to an end-to-end transformation, and this requires complete collaboration of individual business functions across the entire organisation.
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