Every enterprise uses data in its day-to-day operations. Here’s a brief guide to how businesses can leverage data monetization to benefit optimally from their information assets.
During the ongoing COVID-19 pandemic, many companies have focused on cutting costs and creating additional sources of income. This has often resulted in putting promising innovation projects on hold, liquidizing assets and even letting staff go. But there often is a way to generate additional income without making such drastic changes or significant investments.
Nowadays, information is one of the most valuable resources at the disposal of companies. Data monetization is the process that allows valuable data within companies’ business operations to be turned into new revenue streams. According to Gartner, integrating data and analytics into key business roles is among the top trends for 2021.
The increasing need to get valuable insights from raw data opens many opportunities for data monetization vendors. According to MarketsandMarkets research, the global data monetization market was valued at $2.3 billion in 2020. It is growing rapidly and is set to reach $6.1 billion by 2025.
IoT devices and other digital technologies allow businesses to gather a massive amount of data that offers insights into consumer demographics, preferred products, sales performance, etc. There are two main data monetization strategies: direct and indirect.
Indirect data monetization involves leveraging these information insights within your business processes to predict demand, cut waste, segment customers and optimize price and supply chain, etc.
Direct data monetization implies exchanging data-derived insights for money or cryptocurrencies, directly turning them into income-generating assets. Direct data monetization is often part of long-term roadmaps, yet it always seems neglected, coming after everything else, including blockchain adoption, AI and hyper-automation in terms of priority.
Even though the market is expanding significantly, according to the BI Survey, only 25% of large organizations and 9% of small companies have actually launched data monetization initiatives. Companies are sitting on millions of dollars of potential revenue benefits from data monetization, and only a handful of them are actually making it a reality. Most of the time, the reasons why companies postpone monetization of their data are trivial, like the fact that they have never done it before.
There are many types of data that can be sold – from raw sensor data to insights obtained by analytics teams. Data that can be turned into a product differs greatly for each industry. For example, in insurance, customers’ claims histories are widely used for identifying fraud. In media and entertainment, anonymized customer data can be used to find behavioral patterns and target the right audience. Here’s a brief showcase with real-life examples of how companies monetize data products:
"We are proving the power of data-driven phone record monetization as a new business model." João Moreira, Head of Corporate and Public Administration at NOS SPGS
Before starting on the path to data monetization, pay attention to the following data monetization strategy components:
Many companies have large amounts of unused data. And while these companies are sitting on a gold mine, very few of them decide to launch data monetization initiatives. Data that helps to develop and deliver new insights can identify new industry winners by boosting profits and creating internal value. Do not overlook your opportunity!
The breadth of knowledge and understanding that ELEKS has within its walls allows us to leverage that expertise to make superior deliverables for our customers. When you work with ELEKS, you are working with the top 1% of the aptitude and engineering excellence of the whole country.
Right from the start, we really liked ELEKS’ commitment and engagement. They came to us with their best people to try to understand our context, our business idea, and developed the first prototype with us. They were very professional and very customer oriented. I think, without ELEKS it probably would not have been possible to have such a successful product in such a short period of time.
ELEKS has been involved in the development of a number of our consumer-facing websites and mobile applications that allow our customers to easily track their shipments, get the information they need as well as stay in touch with us. We’ve appreciated the level of ELEKS’ expertise, responsiveness and attention to details.