Every day, around the world, we generate reams of data with everything from online transactions, social media, search engines, web traffic, to credit cards, phones, cash machines and more. Some of that data are structured and usable while some are not. Enterprises are full of data about their customers, prospects, internal business processes, suppliers, partners and competitors. Often, they can’t leverage this data and convert it into actionable information to grow revenue, increase profitability and business efficiency.
A new McKinsey Global Survey on data and analytics finds that many companies are launching data-focused businesses. An increasing share of companies is using data and analytics to generate growth but few have achieved significant financial impact, which requires the right combination of strategy, culture and organisational backing.
Value of data
Marketing teams, agencies, and advertisers use data to learn more about their audience’s preferences. These data help them to create advertisements and online content that appeals to users. When companies know more about their customers, they know better how to meet their needs, resulting in improved sales figures for their companies. Businesses can also use data to track how their products and services perform. They can see what’s performing well and what isn’t and take advantage of the insights provided by data sets. Based on these insights, a company might decide to stop funding an unpopular offering and focus on the options customers prefer. They might also decide to revise their product or strategy to make it better meet customer needs.
In today’s age, personal data has become the new currency for entrepreneurs. The value of company data is such that it is being stored and safeguarded from being breached. Filip Cotfas, Channel Manager, CoSoSys, told BE, “Personal data is gaining more and more popularity and businesses are aware of the risks that threaten sensitive data, as the risks involved are not just hefty fines, but reputational damage and loss of customer trust as well.” These extremely large data sets present in the system of the big corporates are being analysed to reveal patterns, trends, and associations, especially relating to human behaviour and interactions.
The information an organisation collects might even explain why certain products, services or marketing messages performed well while others didn’t. Through smart analytics, companies can go beyond just sales figures to obtain insights into people’s motivations and personal preferences. Data analytics is a top-five ‘most important’ issue for 38% of companies, while 21% say it’s the best way to get a competitive advantage. 100% marketers say that they believe it will play a major role in the future.
Putting data to use
At the ICT East 2019, held in September, Sudhir Nayar, Managing Director, Cisco India Private Limited said, “Digitisation, which now is a ‘continuous process’ has a direct correlation with the GDP growth of the country as well as the states.”
Data monetisation is one such offspring of digitisation which is helping businesses grow. Business Intelligence (BI) tools are used to utilise a set of methodologies and technologies to prepare, present and help analyse data. Through this process, data is turned into actionable business information which helps decision makers and end users to make more effective data-driven decisions.
Traditionally, BI tools focused on presenting and analysing historical data from different types of systems stored in SQL databases, data warehouses, as well as other types of relational data sources. With the emergence of big data and NoSQL data sources, the amount of data has grown exponentially allowing for more sophisticated analysis to take place. With the prominence of these sources, more sophisticated techniques and applications are being used for statistical modelling and other more advanced types of analysis. This process is called data analytics and has been one of the most lucrative methods to be used to monetise corporate data.
With the rise of technology, companies are trying to monetise their data in a number of ways. They are creating data products and services including creating subscription-based analytics products with the data collected from IoT devices to provide consumers with trends, patterns, and insights about their usage. While the physical good itself is often a one-time purchase, this strategy creates a subscription-based revenue stream. Nowadays, organisations establish new partnerships by sharing data. With this strategy, monetisation is not a direct outcome but a means to an end - a way to build partnerships and expand market share.
Using data can immensely impact the way an organisation runs its business processes. For example, by knowing the types of customers that respond well to a certain product, companies can improve their marketing spend and sales strategy and reduce the time and resources needed to win new customers. Businesses can also use the same customer data to enhance their products. In place of spending money on poorly received products, spending can be done to better enable customer approved products to generate better revenue.