There’s no single answer on how to extract value from your data. We talk you through the process of choosing the right monetisation strategy for your organisation. Richard Carberry, Principal Consultant at Agile Solutions, shares his insight into monetising data with the right data, the right vision, and the right agile solutions.
How do you extract value from your data? It’s the million-dollar question, but answering it is like trying to solve the age-old adage, ‘how long is a piece of string?’
Well, whose string is it? What’s it made of? Most importantly, what do they want to use it for? And how might that use change over time?
The truth is, no one can tell you how to extract value from data without first understanding what that data is, who is using it, and identifying what they want to use it for – their ‘data vision’ – both right now and in the future.
How to decide your vision for data monetisation
The first step towards any successful data monetisation strategy is understanding what ‘data monetisation’ could or should look like for your organisation.
What is your data vision? Or, more accurately, what is your business vision? If you want your data monetisation strategy to be a success, these two must go hand in hand. A data strategy at odds with organisational goals is always doomed to fail.
The purpose of data is to influence, support and drive business goals, so start with your goal and work backwards. If you want to unearth new market share by targeting a new audience, then how does data support that? What does your data need to do to get you there? What technology do you need to make that idea a reality?
With a clear vision at the outset, you are much more likely to be able to: choose the right management strategies; select and/or develop the right technology; be able to communicate that vision to your employees, stakeholders and solutions providers; and get the results you want at the end of the project (ie, money from data).
What are the different methods of monetising data?
While there are myriad ways to commercialise your data, they can be grouped into two approaches: data-based optimisation and data-driven business models.
Data-based optimisation is the use of data analysis and insights to optimise your business performance: reducing spend, avoiding risk, streamlining operations and/or driving sales. For instance, you could use supply chain data to identify and remove unnecessary costs, or customer data to target sales and marketing activity successfully.
Data driven optimisation uses your data to identify new opportunities, customers and, ultimately, revenue. This is less ‘closing the gaps’ with data, and more ‘opening new doors and possibilities’. It gives organisations a way to truly differentiate with data, whether that’s developing new internal processes or new customer-facing actions. The result: a direct link between data and increased revenue.
How to create a data monetisation strategy
So how do you make that vision a reality? There are four things that any data monetisation strategy needs:
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The right quality data
You have data, but is it what you need? Good quality data is at the heart of any data strategy – not just monetisation – which means ensuring that the data fuelling your project is accurate, reliable, up to date, complete, and relevant. Data management should be built into the early stages of any data monetisation strategy to account for this.
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A strategy that connects people and data
If there is a disconnect between your data strategy and the people using data within your business, it will hold back progress, impacting on data quality, data governance, uptake of data solutions and technology, and the commercial impact of the project.
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Technology and architecture
Whether it’s a bespoke or off the shelf system, you need to ensure that you are selecting the right technology and architecture for your organization. These data solutions need to fully integrate with your business, becoming a seamless extension of your operations (not an added layer of complexity).
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Agility
The longer the timescale for implementation, the more of a risk it poses to the project, your vision and your business. A solid two-year implementation, for instance, could see the business – and the market – in a very different situation by the end of the project compared to the beginning. A data monetisation strategy needs to have the flexibility to adapt to changing business circumstances, market demands and digital insights, or it risks becoming redundant before it has even been completed. Adopting ‘sprint’ methodologies – short, sharp and effective workflows, building towards an end goal – is the best way to avoid this problem and craft an agile approach. You can read more about how Agile Solutions do this through our data strategy services.
What businesses are monetising their data effectively?
Businesses that are already monetising data effectively are not just using data as a resource when they need it, but building it into their day-to-day operations, using it to define their business direction and bring their commercial vision to life.
According to statistics from 2020, the banking sector is leading the way in data monetisation, with 60% of banks surveyed by Statista actively monetising their data and insights through their products and services. It’s unsurprising, given how disruption from the FinTech explosion has driven a real and tangible need for banks to identify their data vision, and bring it to fruition in a competitive market, with services like AI-driven auditing, real-time exchange rates and automated approval processes offering faster, smarter finance options to their clients.
Surprisingly, retail lagged behind other sectors, with just 36% monetising their data, and as little as 19% quantifying the value of their data in their accounting systems – this, despite e-commerce offering a direct financial link between data insights and purchasing behaviour.
Digital disruption continues to face every sector – from retail to telecoms and beyond – as new providers and forward-thinking market leaders utilise data to differentiate themselves in the market and capture new commercial opportunities. As a result, data monetisation is becoming a critical need, not a nice to have, for organisations in every market.
Identify your vision and start monetising your data with Agile Solutions. We deliver fast and flexible ways to modernise, manage and monetise your data, with a people-centric approach that ensures your data vision stays grounded to your organisational needs. To take the first step to monetising your data, contact our team of experienced data consultants.