The ‘information age’ is a term thrown around increasingly these days, but is it actually a suitable term to describe modern business?
According to RoZetta Technology, many businesses still misunderstand how to optimise the value of their data assets, as the idea of monetising data is often focused around ‘selling’ data to create a new revenue stream.
By passing control of data assets to third parties, businesses may create a small revenue stream but this doesn’t maximise returns for the data owner, whose data is now likely to create more value for other organisations.
The idea of selling may simply not be compliant or necessary – RoZetta Technology says a better approach is to create new value streams without selling the data itself.
CEO of RoZetta Technology, David Sharp says using the insights derived from the business’s own data to create new product or service offerings, or to introduce operating efficiencies, will result in increases in revenue, profitability, or both.
Furthermore, setting up selective partnerships with product and service providers with complementary data can optimise this process – these partners will often be in adjacent industries.
“Building a more complete understanding of customers’ needs, wants, and behaviours is a significant step in monetising data. Where one of the partners generates more value than the other (and this is likely), a revenue share creates value for both partners,” says Sharp.
“This type of partnership can provide solutions to problems related to revenue generation, risk management, process efficiency, or compliance. By using data to help the partner or the customer address these problems, businesses can create value: some from new revenue streams; increased margin; and increased retention rates.”
Sharp also stresses the importance of involving a trusted advisor who can receive, integrate, and protect the data assets of all partners playing a utility value-adding role where specialist capabilities are shared.
“This is also an effective way to manage any potential data privacy issues whilst encouraging collaboration and discovery work,” says Sharp.
“The trusted advisor should bring more than technical capability; it should also contribute to the effectiveness of the actionable insights by integrating relevant open data, particularly spatial data as well as technology to feed outputs into core operating systems.”
Sharp notes that operating in partnerships is about annuity revenue generation, not marketing events.
“Most business leaders are aware that they can analyse the data they have, and then use the insights to improve business operations and customer service. However, many don’t realise that their data can be a platform for building long-term partnerships to create value for their customers and in turn their business,” Sharp says.
“Data is a tangible asset that can be monetised; this makes its value measurable. However, to begin realising true financial value from data, businesses need to start by understanding it.”
RoZetta has four key steps businesses can take to assist their data monetisation journeys:
- Understand how the data can be monetised – determined by sharing the value creation, not accepting a licence fee that someone else adds a margin to
- Question the data – examine the business’s data to see whether it would be valuable to other businesses
- Research the compliance considerations – the what, how, and why are important to understand to ensure that compliance is effectively managed
- Turn analysis into insights and actions – being prepared to share and combine different customer data sets may deliver competitive advantage