For Chief Data Officers the notion of monetising data has taken centre stage, presenting both enticing prospects and formidable challenges. For some industries, the idea of monetisation is easier than others, but no matter the sector it’s undeniable that the vast quantities of data generated daily, encompassing customer behaviours, market trends, and operational insights, hold immense potential for unlocking valuable insights that can inform strategic decision-making and foster innovation within organisations.
“Data Monetization refers to the process of using data to obtain quantifiable economic benefit. Internal or indirect methods include using data to make measurable business performance improvements and inform decisions. External or direct methods include data sharing to gain beneficial terms or conditions from business partners, information bartering, selling data outright (via a data broker or independently), or offering information products and services (for example, including information as a value-added component of an existing offering).” Gartner, 2023
As shown from this definition from Gartner, one of the primary promises of data monetisation lies in its capacity to unlock inherent value. By leveraging the diverse datasets at their disposal, businesses can gain profound insights that go beyond expert gut thinking and provide a foundation for informed decision-making. In essence, becoming data-driven. From this base understanding of value, we’re then able to pursue the exploration of new revenue streams, whether through selling datasets to external parties, licensing data for specific use cases, or developing innovative, data-driven products and services.
Sounds simple right? Well, we know for CDOs it’s never as simple as it sounds, and that they encounter a myriad of challenges that cry out for expert strategic navigation, whether we look at monetisation internally or externally.
One of the leading challenges for most to overcome is the complex web of data privacy concerns. As global awareness and pressure of data usage and privacy rights grows, compliance with regulations such as GDPR and CCPA is paramount. Failure to adhere to these regulations not only poses legal risks but can also have significant repercussions on a company’s brand reputation, and huge financial sanctions. All of which tend to make an executive leadership team in most companies sweat a little. Security threats add another layer of complexity. With the increasing frequency and sophistication of cyber-attacks that we’ve seen in 2023, safeguarding sensitive data is imperative. Robust cybersecurity measures are essential to mitigate the risks of data breaches that could compromise the integrity and confidentiality of valuable information. This is especially apparent when it comes to sharing data, whether internally or externally, considering who has access to what at all times.
The role of a CDO becomes multifaceted, first one of expertise to understand if these fears are warranted as we certainly don’t want to dismiss them if there are genuine regulation or security concerns, and then secondly, they must also embody the role of a cheerleader for competitive edge, ensuring the executive board are bought-in to what data can deliver, accounting for the associated risks. There is nothing worth winning in the comfort zone of business, some would say.
“Data is one of the most valuable corporate assets in today’s business environment, but most companies fail to recognise its potential value and take action to maximise it” Anmut, 2023.
It seems natural to jump into the challenges and discuss privacy and security, but equally critical is the emphasis on data quality and governance. And if we’re being honest, probably more an ongoing challenge than privacy and security for most organisations. The accuracy and reliability of data are fundamental to the success of any data monetisation initiative. You’d be hard-pressed to gain high value from disorganised and bad-quality data internally, so you can keep dreaming if you think you can monetise that in any fashion externally. Data doesn’t need to be perfect, but it does need to be useful. Continuing to uphold and establish effective data governance practices ensures not only the integrity of the data but also its relevance and usefulness in deriving meaningful insights.
While the prospect of data monetisation offers substantial opportunities for Chief Data Officers to drive innovation and enhance decision-making, a nuanced approach is essential. Navigating the intricate landscape involves addressing data privacy concerns, strengthening cybersecurity measures, and ensuring data quality and governance. As the digital economy continues to evolve, CDOs must remain vigilant, adapting strategies to both capitalise on the opportunities and surmount the challenges inherent in the monetisation of data.
