We’ve all heard the grand quotes “Data is the new oil” and “Data powers the new economy” amongst others. But the reality is often very far from these bold statements. When I speak to my peers -- too often they seem to get bogged down in the day to day grind of data governance. Don’t get me wrong – data governance is hugely important. Without the right foundations, moving the reliability and efficacy of data science is doomed to fail. But recently, I’ve been wondering if there’s a better way.
For some companies, data monetisation is a reality. It’s no surprise that companies such as Amazon and Google are often touted as examples of companies successfully monetising data. For these digital companies, data is their raison d'etre. But the challenge is different for more traditional bricks and mortar companies.
If you’ve heard me speak at conferences, you’ll no doubt have heard me say “All companies are data organisations. Those that don’t realise this soon may not be around in a decade.” This is backed up by empirical evidence and research. The latest article I’ve come across on the topic is an interesting article by ATKearney. It explains the growing gap between the companies that maximise their use of data and the laggards.
There are forward-looking non-digital UK companies leveraging data for real gains. The list includes manufacturers, retailers, financial services and more. With strong evidence that a data led analytics approach helps to drive corporate profitability, the real question is why aren’t more companies doing it? I believe this is down to several factors including:
- poor understanding of data and new technologies at Executive and Board level
- legacy infrastructures that make change slow and difficult
- lack of funding for a data led transformation
Because so much of the focus of CDOs is directed towards governance and defensive capabilities, it’s often difficult to make a proper business case for using data to improve customer experiences and ultimately for profitability. But it’s profitability that should be the focus for the investment required for a data led transformation. We need to change the focus to one of investment/return.
A lot has been said about how to start building analytics within your company – e.g. monetising data for internal purposes. Typically this amounts to building a data science capability “on the side” until such time as the business case can be proven. I see this often and I’ve lived it. This is the corporate reality because data isn’t an accepted and prioritised business case at an executive level. Thus data monetisation lacks focus and proper funding. Legacy infrastructures just make it even harder.
But what if the data organisation in your company could generate real revenue for your company? What if you could do that an bypass your legacy issues? Wouldn’t that change the dynamic? Of course it would. I hear you saying….”But it’s not that easy.” Well it is. Most organisations suffer with internal silos -- Divisions and Departments that seem to operate in their own little world.
Have you considered making data available externally? If not, you should. The next wave of innovation and growth in our industry will be through external data partnerships. All companies have data that can be safely monetised externally. Sometimes a company simply doesn’t have a productive internal use for a data set. In many cases that data could be made available externally without breaching any confidentiality or creating any competitive jeopardy.
By making data available externally, you can not only circumvent some of the internal politics, you create a revenue stream with which to justify any spend.
Too often, the Board room conversations about data are either esoteric or regulatory driven. By making data available externally, you become a data provider. And with it, your data is generating revenue. By raising funds from your data, you are able to self-finance the data transformation that your company requires. But by commercialising data, the board room conversation changes to one of investment/return. That’s a language that all Boards understand.
This isn’t just something that I believe in academically. It’s something that I am living in the real world. In April, I left my role as CDO to lead a start-up called qdatus. Our mission statement is to turn every CDO into a profit centre. It’s not just possible, it’s necessary. In a world where the gaps between data led companies and the rest is growing, you simply can’t afford to be left behind.
Article by Gary Goldberg, Founder at qdatus