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Data monetization: analysis alone doesn’t drive revenue
There are countless reports of the value of Big Data, but what about the Big Returns? Over the last decade, companies have invested millions in data collection and analysis, and appointed thousands of Chief Data Officers (CDOs) to define and action a data management strategy.
According to Gartner’s estimations, 90% of large global organizations will have a CDO in place by 2019. Worryingly for current or aspiring CDOs, however, it also predicts that only half of those roles will be considered successful.
So, what’s the key to standing out as a successful, future-focused CDO that drives a valuable data strategy? Data monetization.
What’s changed in data management?
The initial hype around Big Data took off in late 2011, continuing to rise and hitting its peak in January 2016. After a burst of investment and focus on locating and extracting data, many organizations are left feeling despondent, failing to see the return on investment they expected.
As such, the role of CDO has shifted; it’s no longer sufficient to consolidate, manage and protect company data. While these activities are essential from a data governance and data quality perspective, CDOs are increasingly tasked with generating business value, or monetizing the data they manage.
A departure from these original goals has led to even greater investment in data experts, but with this comes greater expectations for value-driven CDOs to bring in new revenue streams.
What will happen to current CDOs?
With a new focus on generating discernable revenue from data, Gartner predicts that 15% of successful CDOs will move on to be a CEO, COO, CMO or another C-level position by 2020.
“While the early crop of CDOs was focused on data governance, data quality and regulatory drivers, today’s CDOs are now also delivering tangible business value, and enabling a data-driven culture.”
Valerie Logan, Research Director, Gartner
Consolidating discordant data sources can be problematic for businesses, but with software like Hadoop, it’s much easier to create a central data lake. With more self-service BI and business-wide data democratization becoming the norm, it’s becoming clear that organizing and analyzing your business data into a Single Source of Truth (SSoT) simply isn’t enough to drive true value. But how can you monetize your data?
Consider the business challenges
In order to prove data’s value, CDOs should establish clear metrics against their goals from the very beginning of their role. Importantly when doing this, consider the wider goals of the organization, and assess how your data can answer any challenges.
“The organizations that are doing [data monetization] well are trying to address a business problem at hand, not a data problem at hand.”
Dan DiFilippo, global & US data and analytics leader at PricewaterhouseCoopers
Improve internal processes
When assessing ways to monetize your data, it can be shrewd to start with internal, operational improvements before generating new revenue streams externally. While it can seem less attractive or exciting, boosting the quality of core decision-making can see the most immediate return.
Businesses often underestimate the financial returns that can be generated by using data to create operational efficiencies and streamlined processing.
Access centralized data directly
Centralizing data with platforms like Hadoop reduces the complexity of reading mixed data sources. Yet, accessing this data directly can significantly reduce the agility of BI & self-service analytics users, subsequently blocking their ability to gather value-adding insights.
“When you have hundreds of users pulling data from one central lake and depositing it into their own desktop tools, you’re dealing with duplicated data. It becomes impossible to assess what’s happened to that data, or ascertain its original purpose. Its value is severely damaged as a result.”
Roger Gaskell, Chief Executive Officer, Kognitio
To get faster answers, datasets may go through endless iterations, but this can potentially invalidate strategic decisions. Software like Kognitio, meanwhile, allows hundreds of concurrent user access and assess the business data directly on Hadoop. This act of data conservation immediately improves the consistency and value of the insights drawn, adding fundamental reliability to high-level, data-driven business decisions.
Today, data analysis must be translated into actionable insights that drive revenue. Your business or clients should use data both operationally and centrally to do this reliably, but this holistic change in mindset must be driven by you, the CDO, in order to secure your future position.