Many businesses still misunderstand how to optimise the value of their data assets. The concept of monetising data, while not new, is often focused on ‘selling’ data to create a new revenue stream. However, the very idea of selling infers a transfer of ownership, which may simply not be compliant or necessary. A better approach for organisations is to create new value streams without selling the data itself, according to RoZetta Technology.
In lieu of selling data, businesses often look to pass control of data assets to third parties, so they can monetise it. This approach may create a small revenue stream but doesn’t maximise returns for the data owner, whose data is now likely to create more value for other organisations.
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. Setting up selective partnerships with product and service providers with complementary data can optimise this process. These partners will often be in adjacent industries.
David Sharp, CEO, RoZetta Technology, said, “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.
“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.
“Furthermore, businesses will more successfully monetise their data if they involve 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. 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.”
It’s important to note that operating in partnerships is about annuity revenue generation, not marketing events. Ongoing value creation comes from robust, repeatable processes, not a series of unrelated events.
David Sharp said, “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. 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 recommends businesses take four key steps when it comes to monetising data:
- Understand how the data can be monetised: it’s important for business leaders to understand that monetisation is determined by sharing the value creation, not accepting a license fee that someone else adds a margin to.
- Question the data: business leaders should examine the business’s data to see whether it would be valuable to other businesses. To have a strong sense of value, organisations must firstly understand the data themselves, which means they need access to integrated and enriched data internally first.
- Research the compliance considerations: businesses need to be aware of compliance when monetising data. The what, how, and why are important to understand to ensure that compliance is effectively managed.
- Turn analysis into insights and actions: understanding this chain of data monetisation is critical. Being prepared to share and combine different customer data sets may deliver competitive advantage. It will also begin the journey to being a disruptor, rather than being disrupted. The outcome is an improved overview of customers’ needs, wants, preferences, and behaviours that providers a context for new products and services.
RoZetta is a trusted advisor with proven capabilities in:
- big data and analytics solutions;
- development and ongoing management of a collaborative analytical platform;
- data integration from legacy platforms to build bridges to solution architecture;
- scalable cloud-based technology to future-proof solutions; and
- deep experience in data security and integrity.