Your data is likely your largest business asset. Do you know its value?
Data is now the world’s most valuable resource. While nearly every company collects data, few leverage their data to its full extent. With the exception of technology firms that built their businesses on the backs of big data, the majority of companies today sit on mountains of underutilized information that can, and should, be securely shared and monetized in governed, privacy-protecting, and ethical ways.
In a recent survey, 61 percent of consumers indicated that sharing consumer data is not a good thing; however, when a follow-up question asked if they would look more favorably on a company that distributes data without any personally identifiable information (PII), if the use of that data would help make the world a better place, 45 percent answered yes.
Why isn’t every company securely sharing anonymized and aggregated versions of its data to boost its bottom line, and potentially impact society in positive ways? Some worry about distracting focus from their core business or engineering bandwidth; and all have legitimate concerns around properly protecting PII. There’s also the perceived threat of losing a competitive advantage if your competitors gain access to data derived from your business — particularly if they know its provenance. And all of these concerns are almost always underpinned by the challenge of relying on antiquated, expensive and onerous methods of processing, securing, aggregating, and monetizing data.
However, it is important to grasp one simple fact: The long-term benefits of finding a path to maximizing financial return from your data assets outweigh these short-term concerns. If you want your business to thrive in the years ahead, you must formulate your strategy now to quantify, protect, and properly monetize your data assets.
The perceived Achilles’ heels of data
Most companies recognize their data is a potentially valuable asset — perhaps even their most valuable asset. However, three common concerns can make monetizing data feel like a daunting proposition.
While most companies use data internally for data-driven decision-making, they may view the idea of formulating a data monetization strategy as a distraction from their core business. Compared to core business growth activities that are easier to understand (geographic expansion, new product lines), the investment needed to figure out how to buy, sell and exchange data may sound too hard, especially with limited time and resources to devote to building a new revenue source.
Data privacy concerns
If you haven’t established clear privacy policies and data policies for your organization, championed by your executives, then data privacy becomes a significant issue. Companies may halt any conversation around potential data exchange or monetization if they can’t clearly and confidently answer questions such as, “How do you ensure personally identifiable information (PII) is never shared?”
Conventional wisdom dictates that providing even rolled-up anonymized non-PII data outside your company can be risky because business information is, by nature, proprietary. By extension, monetizing data could lead your competitors to possibly acquire and use your data for competitive purposes against you.
The biggest risk of all
With these concerns in mind, companies may decide to sit on their data and not worry about monetizing it right now. This conclusion is even more tempting for a company that hasn’t spent the money, time, or resources to figure out how to easily and securely use, leverage, and get a return on their data assets.
The best way to confront this attitude is to turn it on its head and ask: What risks does your company face if you don’t understand the true value of your data? Is your company going to be left behind? In the future, are you a (your_product_here) company, a data company, or both?
The short answers: Yes there are many risks, but also “yes we need to be a data company.”
The Data Economy, representing global supply and demand for data and data-derived assets, is already in full swing. Data is already commonly recognized as the most important resource in the world. Soon, secure data exchanges will allow data to be bought and sold in a standardized and secure manner, while still fully respecting data privacy, carefully protecting PII, and protecting raw data from export or improper usage.
That means the time is now to modernize how you manage your data so that it’s easy to confidently participate in these data exchanges when they emerge. By not strategizing today around how you’ll leverage your data tomorrow, you’re opening up the opportunity for a competitor to dominate the Data Economy in your industry or space. Done right, concerns about privacy and security can be reliably addressed with modern, governed, and secure data monetization practices, revealing that the real competitive advantage comes from joining the Data Economy now.
Invest in the right infrastructure and multi-year plan
To develop a strategic plan, the first step is to select a data platform that allows you to get value out of your data and manage the risks. On-premise solutions will make it extremely hard to accomplish your data goals since you’ll need a method to exchange and monetize live, governed, and read-only versions of your data. Therefore, it is crucial to adopt a cloud data architecture that easily enables secure storage, analysis, and exchange of live yet governed data.
Once you have the right infrastructure in place, it may be tempting to jump into a conversation about pricing your data. However, that’s putting the cart before the proverbial horse. While there are companies today that price and sell information such as weather, financial, and demographic data, what’s unclear is how the majority of companies should price their data, who they can sell it to, and how to go about it.
The good news is that everyone is facing these challenges right now, and future data exchanges will help determine pricing and packaging through market forces, as well as help companies determine the demand side forces within the market. However, in order to be ready for what’s coming, your data must be in a form and platform that is consumable, and it must be secured and managed by clear and carefully-designed data protection and use policies. The importance of having your data in the right fundamental architecture on a cloud data platform cannot be overstated.
With your cloud-based infrastructure in place, you can start to put together a multi-year strategic plan that addresses the three risk areas while preparing your company to be an active participant in the Data Economy. The endgame is to lead your industry and achieve the maximum potential return from your data assets while strictly managing all the risks we’ve discussed. What you do today will help you determine out how to protect your data and derived data assets from competitors, secure and prove the protection of PII data, and keep your business moving forward while your three-to-five-year data protection and monetization plan comes together.
After all, the world may be full of companies with data, but the ultimate winners in every industry will be those that turn themselves into data companies.