We are already living in the Age of Data. In fact, every organization operating today is essentially a data organization. However, only 1 in 12 are actually monetizing data to its full extent.
To achieve Data Monetization, there are 2 pathways an organization can take–one with an internal focus and the other with an external focus. Forward-thinking organizations have already embedded Data Monetization Strategies into their Digital Transformation and Strategy Development efforts.
The internal focus pathway centers around gaining Operational and Organizational efficiencies by leveraging data to improve our operations, productivity, and offerings. It also enables ongoing, tailored dialogue with customer by leveraging customer data.
The external pathway centers around making our data available to Partners and Customers. Through this, the goal is to leverage our data to create new revenue streams.
These pathways are not mutually exclusive. We can pursue both pathways for both Operational and Revenue improvements.
A successful Data Monetization Strategy requires us to focus on the highest-value opportunities that align with our Corporate Strategy. To better understand how to evaluate and prioritize these opportunities, let’s dig a little deeper.
Path to Data Monetization: Internal Focus
As mentioned, the internal focus looks at improving Operations and Organization. We can categorize internal initiatives into 2 areas:
- Cost Reduction – Data Monetization efforts leverage data to increase productivity or reduce consumption and waste (either of raw materials or low-value activities).
- Revenue Growth – For top-line growth, we leverage data to improve sales performance or reduce customer churn.
Pathway to Data Monetization: External Focus
The external focus explores new business models enabled by sharing data with Partners and Customers. Specifically, there are 3 types of new business models, progressing in levels of sophistication, value impact to customers, and, likewise, revenue potential:
- Data-as-a-Service (DaaS) – Data is sold to end customers or intermediaries who analyze the data for insights.
- Insight-as-a-Service (IaaS) – This business model takes to the next level by applying advanced analytics to the data to generate actionable insights.
- Analytics-enabled-Platform-as-a-Service (APaaS) – We apply proprietary algorithms to generate enriched data for customers via a self-service platform.
The external pathway to Data Monetization offers much greater opportunities than the internally focused alternatives. Although Applied Data shows the greatest revenue potential and likewise value to customers, it also has the longest time to value. Therefore, we should carefully analyze each option and build a robust business case that balances our strategic vision, capabilities, and competition.
Interested in learning more about Data Monetization? Check out our framework presentation, Pathways to Data Monetization. It discusses the 3 business models in further depth, as well as how to implement your Data Monetization Strategy via Data Platform and Data Factory.
You may also be interested in this other framework, the Building Blocks of Data Monetization.
Do You Find Value in This Framework?
You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:
“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”
– Bill Branson, Founder at Strategic Business Architects
“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”
– David Coloma, Consulting Area Manager at Cynertia Consulting
“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”
– Michael Duff, Managing Director at Change Strategy (UK)
“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”
– Roderick Cameron, Founding Partner at SGFE Ltd
“Several times a month, I browse FlevyPro for presentations relevant to the job challenge I have (I am a consultant). When the subject requires it, I explore further and buy from the Flevy Marketplace. On all occasions, I read them, analyze them. I take the most relevant and applicable ideas for my work; and, of course, all this translates to my and my clients’ benefits.”
– Omar Hernán Montes Parra, CEO at Quantum SFE