Authored by: Geoff Soon, Managing Director, South Asia at Snowflake
Data is growing at an exponential rate. Many types of IoT devices are generating data, including images and video created or consumed for entertainment, images and video from functional applications like advertising and security, productivity-driven data such as files on PCs and servers, and log files.
While data is the largest business asset and nearly every company collects data, few organisations realise the value of their data assets to its full extent. Except for technology firms that built their businesses on the backs of big data, the majority of companies across sectors today sit on mountains of underutilised information. To maximise the value of data, it should be shared and monetised, and achieved in a secured and governed way.
In a recent survey, 61 per cent of consumers indicated that sharing consumer data is unethical, but when asked a follow-up question if they would look more favourably on a company that uses data to help make the world a better place as long as the data distributed does not contain any personally identifiable information (PII) – 45 per cent answered yes.
The question still stands, though: Why are businesses not tapping on their data by securely sharing anonymised and aggregated versions of it to boost the company's bottom line, and potentially impact society in positive ways?
Some businesses worry about distracting focus from their core business or engineering bandwidth. With data privacy issues, all face legitimate concerns around properly protecting PII. While these concerns are valid, they are almost always underpinned by the challenge of relying on antiquated, expensive and onerous methods of processing, securing, aggregating, and monetising data.
However, it is important to grasp one simple fact: The long-term benefits of finding a path to maximise financial returns from your data assets outweigh these short-term concerns. For organisations to thrive in the years ahead, they must formulate their strategy now to quantify, protect, and properly monetise data assets.
The perceived Achilles’ heels of data
Given the challenges companies face in managing, aggregating and sharing their data, many businesses are unable to maximise the value of their data assets. Here are the three prevailing reasons why monetising data can feel like a daunting proposition for most companies:
While most organisations use data internally for data-driven decision-making, they may view the idea of formulating a data monetisation strategy as a distraction from their core business. Compared to core business growth activities that are easier to understand such as geographic expansion or developing new product lines, the investments needed to identify how to buy, sell and exchange data may appear off-track, especially with limited time and resources to devote to building a new revenue source.
Data privacy concerns
Without established privacy and data policies within the organisation, data privacy then becomes a significant issue. Companies may halt any conversation around potential data exchange or monetisation if they cannot clearly and confidently answer questions such as, “How do you ensure personally identifiable information (PII) is never shared?”
Conventional wisdom dictates that sharing information outside the organisation, even rolled-up anonymised non-PII data can be risky. Business information is, by nature, proprietary. Monetising data could possibly lead competitors to acquire and use the data against the organisation which shared the data.
The biggest risk of all
Companies may decide to sit on their data and not worry about monetising it amid these concerns. This is even more tempting for a company that has not spent the money, time, or resources to discover how to easily and securely use, leverage and get a return on their data assets.
To confront this mindset, organisations must ask the following questions:
Without initiatives to understand the value of data, what risks will the company face?
Is the company going to be left behind?
How will the company look like in the future – a company that’s defined by industry (eg: retail/banking), a data company, or both?
Aspiring to be a data company may involve a lot of risks. However, to thrive in the new economy - the Data Economy, organisations must begin to walk the path towards becoming a data company.
The Data Economy, which represents the global supply and demand for data and data-derived assets, is already in full swing. Soon, data exchanges will allow data to be bought and sold in a standardised and reliable manner. Infrastructures and processes that support data sharing while still fully respecting data privacy, carefully protecting PII, and protecting raw data from export or improper usage will soon be in place.
To easily and confidently participate in these data exchanges when they emerge, organisations must take appropriate steps now to modernise how they manage their data. By laying down strategies today on how businesses can leverage their data tomorrow, companies are opening up opportunities for themselves to succeed in the Data Economy. With the help of modern and secure data monetisation practices, concerns about privacy and security can be reliably addressed while revealing a competitive advantage for the business in joining the Data Economy now.
Invest in the right infrastructure
Having the right infrastructure is crucial for organisations to manage risks and get the most value out of their data. Organisations need to select a data platform that allows them to store securely, analyse and share live yet governed data. However, once the right infrastructures are set, organisations may be tempted to jump into a conversation about data pricing immediately. While information such as weather, financial, and demographic data may be available in the data market today, the majority of companies are still unclear about how they should price their data, who they can sell it to and how to go about it.
The data market is still in its early stages and everyone is facing these challenges right now. However, as the market matures, future data exchanges will help determine pricing as well as help companies to gauge the demand within the market. To prepare for what is coming, the data must be secured, stored in a consumable form and platform and managed by clear and carefully-designed data protection and use policies.
The world may be full of companies with data, but the ultimate winners in every industry will be those that turn themselves into data companies.