WANT TO BECOME A DATA LEADER?
Our online training program in Data Leadership will teach you how to make the most of data and get valuable insights.
There’s money in your data assets, isn’t there? Data monetization is an important topic for enterprises of all sizes. It’s pretty clear that many data executives understand that to be the case. “Data in the information age is money,” summed up Robert Abate, Global Director, Enterprise Data Management and Analytics at Kimberly-Clark Corp., speaking at the DATAVERSITY® CDOvision 2015 conference at Enterprise Data World (EDW).
Chief Data Officer Ursula Cottone, who held that role at KeyBank during the time of the conference, discussed that she came to the job with a background in the company’s business divisions. The experience helped her understand how important a role the CDO has in ensuring the high quality of data that the business will depend on to drive outcomes, to make sure that the data is in the right shape, and “to be used in innovative ways, ways it hasn’t traditionally been used to make money for ourselves,” she said.
Manufacturers, the government, and IT vendors in particular are exhibiting an increased tendency to use Big Data to develop information products, with the goal in mind of data monetization, according to a statement by Lisa Kart, Research Director at Gartner, in discussing a survey the firm published last fall on Big Data investments. A case in point is the partnership between IBM and Twitter that came together in March, to create a Cloud data service that businesses can tap into to mine insights from the social media platform leveraging IBM’s business analytics technology, with its Watson cognitive system in the mix.
“The IBM and Twitter deal is a balance sheet item moment,” said Marc Teerlink, Chief Business Strategist, IBM Watson Group, during an EDW session. Selling data and the analysis of it as a service is the beginning of what will be a growing movement to capitalize on data assets, he noted.
More businesses will make their own mark in monetizing data in significant ways themselves. It is going to require that they begin to see the bigger connection between their data (such as client information), the results it already drives (like transaction revenue), and how much those results depend on data quality and freshness. “We are going to need some groundbreaker leaders here,’ Teerlink said, adding the encouragement that “they’re coming.”
The sooner the better, too. As some members of the audience at the event pointed out, there remains more blindness to the connections that exist between data and dollars than they’re comfortable with. The only time that some companies see the value of their data, one attendee commented as an example, is when they are facing bankruptcy and consider the option of selling their information. Another noted in a somewhat more positive vein that companies do become wiser to the data and dollars connection during acquisition processes, as well, when comparing the base of customers they already have with those who are buying products or services from their intended target.
Abate echoed the importance of thinking bigger about data and its link to business results during his presentation, noting that, “Until you see the connection between business and data, data has no value.” At the same time, without information, nothing else the business owns has value. “We have to get across the whole point that [data] is currency,” Abate said. And that is a point that might not be fully comprehended if responsibility for managing an organization’s data is, in the words of Peter Aiken, Founding Director of the Data Management consulting firm Data Blueprint, “treated as a sidebar or bullet point at the bottom of someone’s job description.”
Turning Data into Dollars
There are no such sidebars or bullet points at Catalina Media Lab, which uses sources including its large database of shopper purchase history to personalize consumers’ connections to brands. That’s understandable, as the business is focused on data monetization for its consumer products, goods manufacturers, and retailer customers. As data volumes grow larger and the cost to store it goes down, data’s value is increasing – even though its power is not yet tapped into as much as it might be. “People know data is an under-utilized resource,” said EVP and Chief Technology Officer Steve Rubinow at CDOvision. “People want to make more money from it.”
In the work it does for clients, Catalina tries to include as many data sources as possible – “to the extent that they are valuable,” as Rubinow said – to create campaigns that motivate consumer purchases. Potentially an upcoming player in contributing some data of value here and elsewhere is the Internet of Things: “All vendors are talking about the insights that can be gathered from all these sensors in environments,” he noted, though he has reservations about whether all those data assets can be monetized.
“Will all the data have value? I’m not really sure but I am sure that lots of people will try to put it together as new data sources, to refine it, to try and monetize it,” he said. “We are moving to an object model where all objects will talk to each other and that can give us wonderful marketing opportunities in [what may be a] golden age of marketing.”
Protect the Golden Goose
While the winds may be beginning to blow harder in favor of data monetization, companies could find themselves twisting in the gales a bit if they don’t properly prepare for the new age.
Part of that preparation means making sure that any legal issues around data are appropriately addressed upfront, according to CDOvision speaker Bill Tanenbaum, Head of IP & Technology Transactions Group at Kaye Scholer LLP. “Data sets have a competitive advantage, so you want to protect them in order to monetize them,” he said.
One starter point is for CEOs to make sure they have permission from owners of data to use it to make money – owners might be consumers, for example, whose information they have collected. Others are to put the data in the right silos under the right forms of protection; and, make sure that the right processes are in place to keep data safe and secure should its care or analytics be outsourced to a lower cost location. More than 60 percent of data breaches are caused by bad outsourcing, he noted, citing a global security report from Trustwave: Sixty-three percent of its investigations revealed that a third party responsible for system support, development and/or maintenance introduced the security deficiencies exploited by attackers.
“The CDO needs to be involved at the early stages of the outsourcing process,” he said, to ensure the right request-for-proposal specs are represented around data security. “It helps to get the CDO’s insights into this because risks and business opportunities both are so much greater than they used to be.”
He also mentioned that there can be some tension around data lifecycle issues, between risk averse lawyers and business executives who are willing to live with risk in exchange for the potential money making prospects that exist in keeping data on hand – even if it’s scaling up in age. In legal-speak, “data retention is a euphemism for, ‘How soon can I throw it away,’” Tanenbaum said. “All litigators say throw things out in case of a lawsuit. But the revenue side guy say they want to use the information, not throw it away after two years, because from a business point-of-view that’s stupid.”
There’s no one simple answer to the issue. Solving the problem of whether or not to keep certain data sets, regardless of age, depends on context. “Some you get rid of,” he said. “And some you don’t.” The more companies explore leveraging their own data or external data sources for monetary gains, the more it’s likely that they’ll discover the many opportunities just waiting to be cashed in on. They’ll face more questions, as well, and the time to start preparing answers to them is now.