Okay, I'm as mad as hell, and I'm not going to take this anymore! If data scientists are the modern-day alchemist who turn data into gold, then why are so many companies using leeches to monetize their data?
When I talk to companies about the concept of a “Chief Data Monetization Officer” role, many of them look at me like I have lobsters crawling out of my ears. “Sorry, we don’t have that role here.” Of course you don’t have that role, and that’s why you SUCK at monetizing data. That’s why you have no idea how to leverage data and analytics to uncover and codify the customer, product, and operational insights that can optimize key business and operational processes, mitigate regulatory and compliance risks, create net-new revenue streams and create a compelling, differentiated customer experience. What, you expect that just having data is sufficient? You expect that if you just have the data, then some sort of “miracle” will occur to monetize that data?
Before I give away the secret to solving the data monetization problem, I think we first need to understand the scope of the problem.
Organizations spend 100’s of millions of dollars in acquiring data as they deploy operational systems such as ERP, CRM, SCM, SFA, BFA, eCommerce, social media, mobile and now IoT. Then they spend even more outrageous sums of money to store, manage, backup, govern and maintain all of the data for regulatory, compliance and management reporting purposes. No wonder CIO’s have an almost singular mandate to reduce those data management costs (hello, cloud). Data is a cost to be minimized when the only “value” one gets from that data is from reporting on what happened (see Figure 1).
As the Harvard Business Review article “Companies Love Big Data But Lack the Strategy To Use It Effectively” stated:
“The problem is that, in many cases, big data is not used well. Companies are better at collecting data – about their customers, about their products, about competitors – than analyzing that data and designing strategy around it.”
Bottom-line: while companies are great at collecting data, they suck at monetizing it. And that’s where the Digital Transformation Value Creation Mapping comes into play.
The Digital Transformation Value Creation Mapping lays out a roadmap to help organizations identify, codify, and operational the sources of customer, product and operational value within a continuously-learning and adapting culture. Let’s deep dive on each of the 4 steps of the Digital Transformation Value Creation Mapping so that any organization can realize the data monetization dreams…without leeches (see Figure 2).
Figure 2: Digital Transformation Value Creation Mapping
Step 1: Identify the Sources of Value Creation. This is a customer-centric (think Customer Journey Maps and Service Design templates) exercise to identify and value sources and impediments to customer value creation.
Figure 3: Hypothesis Development Canvas
Step 2: Codify Sources of Value Creation. This the data science, data engineering and advanced analytics effort to put into math (codify) the customer, product and operational requirements defined in Step 1.
Step 3: Operationalize Sources of Value Creation. This step is the heart of the data monetization process – integrating the analytic models and analytic results into the operational systems in order to optimize the organization’s business and operational decisions.
Step 4: Continuously-learning and adapting to Sources of Value Creation. This step provides the feedback loop to facilitate the continuously-learning and adapting of the analytic modules and assets models (the heart of creating autonomous assets that continuously-learn and adapt with minimal human intervention).
Data Scientists are the modern-day alchemists – they know how to turn data into gold. And the Digital Transformation Value Creation Mapping gives you that roadmap for turning data into gold. Heck, here is a Value Creation cheat sheet to get you started!
Figure 4: Value Creation Mapping Template
So, what are you waiting for…bigger leeches?
Extra Credit Reading. Digital Business Transformation 3-part series: