By now, most everyone realizes the importance of data analytics, and many organizations are building data capabilities.
The next crucial step is data monetization: turning data assets into money. In their new book, “Data Is Everybody’s Business,” authors Barbara H. Wixom, Cynthia M. Beath, and Leslie Owens look at how organizations can use data not just to create valuable benefits, such as higher customer satisfaction and more streamlined processes, but also to “purposefully realize financial value — money — to improve their bottom line.”
The authors are all researchers affiliated with the MIT Center for Information Systems Research, and the book draws from case studies, field observations, and insights from a data research advisory board.
In the following excerpt, the authors explain what it means to monetize data assets and make data “everybody’s business.”
It’s common for leaders who want to create value from data to look for inspiration within companies like Google. They might go on a road trip and tour Google’s California offices. While there, they might encounter advanced technology and brilliant data scientists developing proprietary artificial intelligence-based products, such as a map that automatically updates when a business is open.
But what else is behind a company like Google’s success? It’s several things. It’s the expectation that everybody is a data practitioner, inventing new data-driven work practices and sharing them with others. It’s an environment where data has been converted into data assets that people can find, trust, and use to address unmet business needs without having to create manual, bespoke processes and controls. And it’s a firm-wide push to convert such data assets into revenues since, after all, the mission of Alphabet Inc. (Google’s parent company) is to “organize the world’s information and make it universally accessible and useful.”
Like newlyweds returning from a fantastic honeymoon, leaders from traditional companies might return to their offices after a field trip to Silicon Valley and feel overwhelmed by what’s ahead. Of course, few organizations have as much data as Google. But all organizations, including yours, have lots of data. It can be internal (e.g., accounting data) or external (e.g., purchased data about consumer credit risk or household preferences). It can be structured (e.g., customer orders) or unstructured (e.g., tweets). It could live in a spreadsheet, the cloud of a consultant, an email archive, a data warehouse, or a data lake, to name just a few spots. Organizations today are great at amassing data, causing a data deluge that grows with every technology advancement in storage, processing, electronics, networking, and telecommunications.
Yes, in most organizations, data is everywhere. Yet typically, the data is tied to some context. The data is shaped and constrained by the processes that create it and govern it. It is stuck in closed platforms, replicated in multiple locations, incomplete, inaccurate, and poorly defined. As a result, organizations focus a lot of managerial attention on liberating data from silos and applying it to new specific uses such as calculating customer churn or spotting supply chain breaks. Such efforts are complicated and filled with friction, and each time a new chance to use the data emerges, somebody must overcome the same hurdles. Leveraging data to meet an unanticipated challenge or opportunity seems like a Herculean feat.
Companies like Google take a different approach with their data. They decontextualize data and prepare data assets that can be accessed and reused for innumerable purposes. Such data assets are accurate, complete, current, standardized, searchable, and understandable — assets that everybody across the company can easily incorporate into their value-creating initiatives. The “data” in the title of this book refers to data assets. The book will describe how organizations develop data assets so they can be exploited repeatedly.
The use of “everybody” in the title also has significance. Data is not just for people with “data” in their job title. For organizations to develop data assets and exploit them over and over, many more people need to be in the mix. Just as an organization’s financial results are the responsibility of more than finance and accounting staff, just as customer retention requires more than sales, and just as talent management is not solely owned by human resources, data responsibilities need to be held well beyond the data teams.
But why does the title say that data is everybody’s “business”? Because your organization should be using data to make money and save money. The financial inflows generated from your organization’s collective data investments should be larger than your financial outflows. If your organization does not actively manage the amount of money you generate from your data — that is, the extent to which you monetize your data — you will limit your financial inflows. Worst case, you will lose money.
Excerpted from “Data Is Everybody’s Business: The Fundamentals of Data Monetization,” by Barbara H. Wixom, Cynthia M. Beath, and Leslie Owens. © 2023 Massachusetts Institute of Technology. Reprinted with permission from The MIT Press. All rights reserved.
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