Gold Nuggets of Data all over the Ground

Data analytics

Increasingly, how an organization views and uses their data determines their level of success, and therefore the value of the enterprise. Data can be as valuable as gold nuggets for companies, but too often it’s ignored–“left on the ground” rather than mined, gathered, and inventoried as a strategic asset.

Gartner research indicates that by 2021, the vast majority of stock analysts will include “data” components in their corporate valuation models for how much structured information each company possesses and how strategically they use it.  This fact will surprise few.  And yet despite this being a well-known fact, Forrester estimates that between 2/3 and 3/4 of corporate data still goes unused in any capacity for analytics.


Care Must be Taken to Protect Your Customers’ Privacy

No doubt your organization has contractual obligations and has made promises (explicit or implied) to your customers to protect ALL data which, if released, could cause them financial, reputational, or strategic harm.  No matter what options you consider for monetizing your data, these obligations must be held sacrosanct and followed in full.

Also, in addition to specific responsibilities to which you’ve committed, there are several laws governing the protection and confidential treatment of customer data, particularly data about individuals.  These include the Gramm-Leach-Bliley Act (GLBA), the Health Insurance Portability and Accountability Act (HIPAA), and the EU General Data Protection Regulation (GDPR).

When we discuss the sale/licensing/usage of data below, it is with the understanding that it has been sufficiently anonymized, obfuscated, and/or aggregated to be compliant with all of your responsibilities to customers and contractual partners.  With those parameters firmly in place, let’s explore how organizations can be an asset and/or a source of revenue for your organization…


Data can be Monetized Via Sale/License

Properly curated (see below), your organizational data provides a unique perspective on the interactions between your customers, products, suppliers, distributors, and services.  It is therefore valuable to anyone interested in ANY of those same customers, products, or services.  It would be extremely valuable to those interested in ALL of those same customers, products and services, i.e. your competitors; but we suggest avoiding any sale or licensing of data to anyone in direct competition with you.

Data “clearinghouse” companies have already staked a claim in many industries, providing a ready market.  If you’re not in one of these industries, there are likely many entities in adjacent business lines serving the same customers (or further up/down the supply & delivery chains) which might benefit from your organization’s data, and who would therefore be willing to pay you for it, even if they’re not advertising or actively seeking this in the market.  Strike up a conversation – particularly with those most technologically advanced – and see if we’re not right.  (Or engage Innovation Vista and we’ll explore the market for your data on your behalf…)


Balance the Pros & Cons of Selling vs. Licensing, Completeness & Timeliness

There are pros & cons to the question of whether to sell your data or to license it.  Are you willing to accept ongoing responsibilities of curating & publishing in exchange for a revenue annuity from your data?  Or are you more interested in distinct transaction(s) with no ongoing operational workload?  Are you comfortable with someone having the legal right to your data indefinitely, or would you prefer to time limit their access and give yourself the chance to reconsider/renegotiate?

There is also a question of the completeness and timeliness of the data you wish to sell.  Obviously, the more compete and up-to-date data is, the more valuable it is to buyers and the higher its likely sale/license price.  On the other hand, there may be some data you’re less comfortable selling if it’s fully complete and up-to-date.


Determining the Asking Price for Your Data

This is where the rubber meets the road.  We’ve compared data to nuggets of gold; elsewhere we’ve said data can be “weaponized”Others have compared it to modern-day oil.  That means it sells at a high price, right?  Drumroll please…   the answer is:  IT DEPENDS.

There are myriad variables in the equation of the value of data, and ultimately it will come down to a business negotiation.  Here we offer a few guiding principles:

  • Consider established pricing ranges if they exist. You’ll not get far asking for double the price at which they bought similar data yesterday.
  • View the benefits from their side of the table. What will they do with the data?  How much could your data impact their revenues & profits?
  • View their benefits for the time horizon offered. A data sale gives the buyer these benefits indefinitely (albeit with a decay factor as the data ages), vs a time-limited benefit via license.
  • Make your best estimate of the analysis your buyer will go through, factoring in their likely cost of capital and ROIC target, and back into the highest price that might still enable the start of a negotiation.


Or… You may Prefer to Keep Your Data and Monetize it Another Way

Your data can still be “nuggets of gold” for you even if you prefer not to sell or license it externally.  New analytics tools can make use of your data to help you do more business with existing customers and/or to win new customers.  Consider these possible revenue sources:

  • New products or services can be created with data, and sold for a fee
    • Sold to existing customers, as an add-on feature to their continuing business with the company
    • Sold to completely new customers or even new industries or segments (B2C vs. B2B etc.)
  • Your data can be used for extreme personalization on outgoing Digital marketing materials
  • Using your data, AI can predict customer needs and suggest transactions/offers
  • Deep customer insights reports can be created which analyze and compare your B2B clients against their peer set, across geographies, product/service lines, time periods, etc. These reports are the ultimate tool in the sales team’s hands, positioning them with answers to any question and revealing insights the clients may not even be aware of.


Regardless of How You Monetize, You can Increase the Value of Your Data

Just as with any asset, it makes sense to maximize the value of your data.  Nurturing a culture of “data as an asset” also has the added benefit of creating a virtuous cycle:  as data improves across the organization, it is more useful and valuable, building a shared commitment across all the teams benefiting from it to keeping data accurate and complete.

When every team in the company sees the other teams treating data as “nuggets of gold”, there is pressure on them to do the same.  (No one wants to have the only unmowed yard in a neighborhood of nicely manicured lawns, right?)


A “Virtual team” Approach to Data Quality Aligns Interests and Saves Costs

Duplicate and missing data are a plague on most companies’ enterprise systems, and addressing these issues usually has a positive ROI in monetizing data. A data quality program can yield huge benefits on accuracy and completeness for minimal costs.

Our favorite approach is to treat Data Quality as a “virtual” program laid “over the top” of the existing org-chart. This program delegates and tracks data corrections to the same teams who enter the data day-to-day. That way they can avoid parallel business processes and costs—and more importantly, it aligns motivations to “get it right the first time,” as the culture of “data as an asset” takes hold.


You can Have the Best of Both Worlds – Streamlined Data Entry AND More Data Entered

Most systems have minimum “required data” elements to enter data. In many cases, entries to those enterprise systems include only those minimum data points. Staff are busy, and are often measured on “keeping up” with data entry – not the completeness of it.  One of our favorite system enhancements is calculation logic to pre-fill data, and to infer values for related data as soon as other data is entered. This can be intuitively determined by other data in the system or through enrichment data sources.  It’s sometimes fairly straightforward, but at times does require an AI model or more advanced approach.

An enormous amount of valuable data is stored in “unstructured” formats (e.g. documents, spreadsheets, slide decks, call logs, comments). Natural Language AI can be used to analyze those sources and turn their contents into useful, structured data.


Does Your Organization Have Nuggets of Gold Data Lying on the Ground?

Organizations which can change their culture and attitude toward data can stop leaving these nuggets of gold lying on the ground, and harvest them for real business results. Hopefully this article has given you a glimpse of how data can be a real strategic asset for your company, if not even a source of new revenue.

Don’t just care about data because stock analysts are factoring in data in their valuations of your company.  Don’t just care about data because you might be able to sell or license it externally.  Don’t just care about data because it can enhance sales and marketing efforts.  Do it for all those reasons, and to know that you’re in an organization poised to take advantage of the most strategic new asset class to arrive in business in over a century.