Extracting capital from the data economy

In these vast volumes of data are hidden insights into consumer behavior, emerging market trends, even predictors of the future. For organizations, the goal is to make sense of this rapidly growing amount of data and find innovative ways to extract sustainable value from it, while effectively managing the consumption of cloud services that support data management and analysis.

Yet, according to a survey of 255 business leaders and decision makers conducted by MIT Technology Review Insights, 45% of respondents say they use data only for basic insights and decision making. This is a missed opportunity.

“There is an absolute explosion of data sources both inside and outside the company,” said Chana Seneviratne, executive director of technology development and solutions at Telstra, an Australian telecommunications company. “Like telecom, our customer base and the data it generates are a fantastic asset that we probably don’t use as efficiently as we could.”

But that is changing as Telstra takes advantage of today’s data economy. The data economy is a global digital ecosystem in which data producers and users – companies and individuals – and government and municipal agencies collect, organize and share accumulated data from a wide variety of sources. By linking unrelated data across industry boundaries, organizations can gain richer business insights, touch unexplored markets, serve citizens and consumers alike with data-driven products and services, and generate revenue from their data, by sharing them externally with key customers and suppliers.

The advantages of participation

So how can organizations participate in the data economy? One way is by removing data silos, which can prevent companies from gathering compelling insights. Fortunately, more than a third (35%) of the respondents in the survey collaborated with data exchange partners. This sharing of data assets helps organizations unlock value and achieve significant business results.

For example, 66% of those who share data assets experience improved collaboration with partners and suppliers. It is easy to understand why. Data exchange and markets provide many stakeholders with a secure and reliable platform for collecting and sharing information in real time.

More than half (53%) of business leaders say participating in the data economy has led them to create new business models. For example, using surveillance devices that support the Internet of Things, Telstra provides applications that convert data on waste, water, air, soil and noise into useful information. By combining this data with microclimate data collected from meteorological stations, the company plans to provide the Australian agricultural industry with information that can be used for a range of activities, from crop health forecasting to pesticide use determination. “We combine isolated pockets of data to create more value, insights and applications,” says Seneviratne. “We are now in a better position to generate revenue from this data and add value.”

Telstra is not alone. According to Kent Graziano, chief technology evangelist at Snowflake, a cloud-based data provider in Bozeman, Montana, “As data grows, many organizations realize that the data they have can actually be useful to other organizations, either in within their own industry or in neighboring industries. ”

Graziano suggests a medical device manufacturer as an example. Medical devices can monitor and collect critical information about a patient’s blood pressure, heart rate, and insulin levels. But most manufacturers play a minimal role in influencing and shaping outcomes for patients.

By partnering with healthcare organizations and securely integrating tracking data with other patient and third-party data, the medical device manufacturer can create a new business model as a provider of health information with a direct impact on patient well-being.

“Many organizations collect data and analyze data, but it has never been technically feasible and cost-effective to try to generate revenue from that data,” Graziano said. By sharing data with key stakeholders through cloud platforms, such as data sharing or the market, businesses can “develop a new revenue stream”.

Another advantage of the data economy is faster innovation, according to 52% of respondents. Traditional companies face unprecedented pressure from their digital counterparts to innovate and respond quickly to changing customer preferences and market trends. By using data from a wide variety of external sources, organizations can find innovative approaches to designing products, providing services, and even solving global problems.

For example, credit card companies could work with healthcare organizations, mobile phone operators and e-commerce players to use their integrated data to track patients with covid-19 and provide care in ways that would not be possible. as separate entities with separate data sets.

“In the digital economy, how does a 200-year-old company innovate?” Asks Sunil Senan, senior vice president and business data and analysis manager at Infosys, a digital services and consulting company based in Bengaluru, India. “We believe that data is a big part of continuing to serve customers and finding new ways to stay relevant in a world of disruption.”

In addition to creating new business models and stimulating innovation, more than half (51%) of respondents to the survey say that participation in the data economy can improve customer acquisition and retention – gaining new customers and retaining current – while 42% of respondents cite increased income as an important business benefit.

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This content was created by Insights, the personalized content of the MIT Technology Review. Not written by the MIT Technology Review.

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