Data Monetization: The Greatest Challenge in the Digital Age

In the age of Big Data, where data became a company’s most valuable asset, just a few are maximizing its economic benefit, once it requires the right framework that combines strategy, culture, processes and the organization itself.

The current data-driven world and the big data and analytics revolution that has been happening for the past few years has resulted in the emergence of data as any organization’s most valuable resource and cornerstone of corporate strategy, completely transforming the way such organizations plan, operate, manage talent, develop markets and create value to its clients, and that has unquestionably become the new rule to exceed within any market or any segment. The fact that CEOs, who are the executives responsible for any major business changes or repositioning, don’t fully exploit or understand the power or how fast it can generate new revenues or reduce corporate costs can be a challenge that may define the continuity or death of a company within its segment. The great next step for CIOs and their C-suite counterparts is to turn that information into profit, so CEOs may finally understand how important it is for business.

To better illustrate the amount of money within this area, the global data monetization market is expected to grow from USD 1.26 Billion in 2017 to USD 3.12 Billion by 2023, at a Compound Annual Growth Rate (CAGR) of 17.1% during this forecast period. Below follows a graphic that shows the forecast growth by region:

It’s clear to all companies that there is a significant financial value locked away in their enterprise systems. The process of comprehending it is known as data monetization, and there are two primary ways to monetize your company’s data. You can either use it to generate more revenue, or leverage it to uncover cost savings. Many different market researches show that organizations that are seeing the most impact from their data and analytics programs offer lessons to others striving to make the most of their data, for those companies have established a strong foundation for analytics following a few steps: by clear and specific data and analytics strategies, better organizational design practices, and a greater emphasis on turning new data-related insights into action.

Defining the Right Data and the Right Tools

The very first step to build a and efficient data monetization strategy is to clearly understand and define which data is useful for your organization. The potential to transform your data into a profit-enhancing asset has been there for a long time, but now companies are dealing with big data and its growing volumes of internal information, as well as new structured and unstructured external sources such as mobile, IoT, the cloud and social media. There has been a great amount of investment in gathering and storing this overwhelming amount of information, and now there is a great need to get as much value as possible from it. The recent digital technologies enable companies to collect massive data, as the cost of data storage has drastically decreased and its capacity increased significantly. Other technology advances facilitate real-time data analysis and personalized communication. Simultaneously, there has been a realization that an enormous amount of the data being produced could offer additional value if enhanced and analyzed to tap its potential. That is wrong and dangerous. Some companies still use outdated tools like multi-touch attribution (MTA) and marketing-mix models (MMM), and those may fail in not only delivering timely insights or helping in any decision-making processes, for these models can’t provide the holistic view of performance needed and an accurate understanding of what’s working and what’s not. Defining the right systems and models to collect and interpret data is essential and can be the small detail to determine the data that may drive a company to exceed in its segment.

Can your Data be Monetized?

This is another very relevant topic when defining your data monetization strategy. Ensuring your information assets integrity and readiness to me monetized is key to achieve the maximum financial value of it, especially when the data your company is gathering comes from multiple sources, channels and systems. It’s certain that, if the company chooses to work without the proper quality controls in place, inconsistencies and redundancies may hinder its ability to monetize its data, or even to generate value for it. Solutions that are focused on managing data quality and data governance to centralize and cleanse your company’s database will guarantee much more efficient data management procedures. Ensuring and guaranteeing that your data is ready to be monetized will rapidly enabled more efficient marketing campaigns and boost new revenues through more effective conversion rates and other activities. Before your company tries to monetize its data, it must make sure to organize, govern, and share it.

The Right Steps for a Data Monetization Strategy

Data monetization is, essentially, making a positive and measurable impact on business revenue by using data effectively. It’s well-known that getting data monetization right requires significant effort, but it’s unquestionably becoming critical for staying ahead of traditional competitors and new disruptors in any given market or geography. Executives must be very careful when starting a data monetization project, and here are some suggestions of steps to be followed by them so the efforts are properly addressed:

• Initial Focus Must be Internal: Companies that struggle to get consistent data and to shared it across the organization shouldn’t be thinking about providing it externally, but they should take the time to shore up their data foundations — strategy, design, and architecture. Putting their data to work for internal use cases, such as improving decision making or optimizing operations will be vital in building the business case and technical platform need to monetize data effectively, as well as create foundations for their data monetization models for their businesses.
• Innovate Through a Partner Ecosystem: In many cases, the most innovative solutions can best be sourced externally. Building a partner ecosystem with analytics companies that can supplement the organization’s existing capabilities, platform providers that host tools or solutions, and data providers that can help the organization gain access to unique data sets, may offer unique add-ons to existing products or services, or sell the data as part of an entirely new business.
• It’s Not an IT-Only Effort: Companies also struggle with data monetization, and, in finding the right strategy, when they delegate all data and analytics efforts exclusively to the IT department. Efforts to monetize data are often more effective when they are business led and focused on the most valuable use cases, so getting the business areas, such as marketing and sales, is primordial for companies to be successful in their initiatives.
• Data Quality Management: Ensuring that your company’s data continuous integrity is another essential part of any data monetization initiative, and the risk is even greater when it involves external clients. Data quality management solutions are an ideal fit here, helping to clean invalid or missing data from your corporate systems. Master Data Management (MDM) is also recommended, allowing companies to create a single, consistent, 360-degree view of customers, products, suppliers, and other business entities across all systems and sources.

The value of data is now unquestionable, whether your company uses it to enhance internal operations, innovative, or works within a B2B partnership. A recent McKinsey study finds that organizations leveraging data outperform peers by 85% in sales growth and more than 25% in gross margin. But at the end of the day, insights are only as good as the data collected. The main question for every company now is simple: can you afford not to monetize your data?