The conversation surrounding storing and managing big data seems to have arrived – and departed. Discussions of speeds and feeds have faded, we have all chosen sides on Hadoop and SQL, and organizations have put systems in place to handle structured and unstructured data. Now we are finally turning to one of my favorite questions: “I have all this data, but what has it done for my business?”
It seems that two schools of thought have emerged on this topic: the internal efficiency of data democracy and the monetization and revenue-focused infonomics. The data democracy camp touts sharing data throughout large enterprises in order to increase efficiency and enable data-driven decisions. This is the promise of most business intelligence solutions, although they have yet to deliver. The infonomics (sometimes called “data monetization”) supporters want business innovators to focus on creating new data products in order to drive competitive differentiation and revenue in the midst of the digital revolution.
Each of these camps has its challenges. Data democracy has, in large part, been a lot of talk without results. Universal access to data and insights has been touted as BI’s potential triumph, and yet less than half of organizational decisions were based on data in 2015. Also, with hard-to-use systems and a lack of widespread enablement, data isn’t truly being shared with every internal business user. It is mostly limited to data analysts, IT, and perhaps a few executive dashboards.
Infonomics also has its share of battles to fight. First, BI for data monetization companies like mine need to educate organizations on how they can drive true dollars-and-cents value with one-to-many analytics. Then we need to scale their success.
But what if these two schools came together? Clearly, organizations need both widespread analytics access and data that differentiates them competitively, especially since this “bimodal” approach will boost the ability to involve the business in key analytics initiatives, according to Gartner Research.
Imagine it like a data nation-state: Infonomics handles the trade agreements externally and drives economic growth, while the data democracy ensures data-driven decision making throughout the organization. No longer do we live in an era of data dictatorships. It’s time to extend the data sharing mindset beyond the borders of each individual company or business unit.
Three Models for the New Data Economy
Of course, at this point, business leaders are probably wondering what the hard-and-fast business model is for this sort of sharing-plus-monetization arrangement. Luckily, I have officially entered the data monetization space and have worked with a number of companies that have done exactly this to strengthen three different areas of their business:
Keep the customers you have. If our SaaS customers have taught me one thing, it’s that analytics sell. But you’d be surprised to know that a number of organizations in more traditional industries have also been able to use analytics offerings to get their customers to keep coming back.
Consider, for example, a company like the Health Information Management Services Society (HIMSS). The company supported IT in a massive, highly regulated, often lagging industry, and its newest strategic move has been to offer data products to its customers. With these, the company has been able to implement new, innovative services to every U.S. and Canadian hospital. As Chief Operating Officer Blain Newton put it, “We’ve been able to automate the delivery of critical insights and ad hoc analytics out to our entire ecosystem. It’s created an entirely new way for us to serve our clients and drive growth in our business that was not possible before.”
Increase revenue through current subsidiaries, partners, and supply chains. As the founder of a company with a large number of strategic partners, this model is near and dear to me. I know the importance of proving your worth, not just saying it, whether you are midstream in a supply chain, a subsidiary of a larger organization, or trying to see the performance of all of your stores from a 10,000-foot view.
But don’t take my word for it. The Firehouse Subs franchise has been able to distribute analytics at a grand scale to its franchises. The franchise currently has a scorecard-based dashboard system in place in 915 restaurants that grades on 10 key metrics. This sort of widespread analytics allows each restaurant to track its success against averages company-wide, and helps corporate HQ to identify and assist struggling locations with sales and customer satisfaction. It’s this kind of success that proves the value of scaling your analytics beyond a corporate center and into your on-the-ground stores and supply chains.
Capture revenue streams you don’t have yet. Of course, there are other approaches that will give you an up-and-to-the-right trendline to show the board. This is where a brand new, well-designed, externally facing data product comes into play. Even if you are in a traditional, behind-the-scenes industry, you can still create products that will bring in new revenue. Consider facilities and service management company ServiceChannel, for example. By adding ServiceChannel Analytics to its offerings, the company was able to increase its solutions’ user engagement from 30 percent to 80 percent and drive significant associated new revenue. The facilities-management industry is worth over $500 billion, and ServiceChannel Analytics is ready to capture its share of it by distributing data products.
Although I could delve into numerous additional examples of these new data business models, I’ll let you imagine the possibilities. One data product can quickly become five and then 10 as you begin to share your data with new audiences that benefit from insights at their fingertips. With analytics that can scale, the sky’s the limit, and if we allow for a unified state of data sharing and monetization, we are nearly there. So, let’s put the old BI regime to rest and declare an independence day for the new state of analytics!
Roman Stanek is CEO and founder of GoodData. Stanek is a passionate entrepreneur and industry thought leader with over 20 years of high-tech experience. His latest venture, GoodData, was founded in 2007 with the mission to disrupt the business intelligence space and monetize big data. Prior to GoodData, Roman was Founder and CEO of NetBeans, the leading Java development environment (acquired by Sun Microsystems in 1999) and Systinet, a leading SOA governance platform (acquired by Mercury Interactive, later Hewlett Packard, in 2006).
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