Information has become an essential resource of the modern business, used by companies both small and large across a significant number of industries and sectors.
These are the organisations that take on large quantities of customer data as a way of better understanding specific market niches and attracting new customers. However, even though there’s significant value to be found in utilising this data, many organisations are choosing to ignore it.
Information has become an essential resource of the modern business.
A new study from Gartner has found that this is in spite of the fact that data has such clear monetary value.
This article will take a look at why data holds such value for businesses, and the reasoning behind those organisations choosing to ignore it.
Ignoring a powerful asset
Recently, Gartner found that even though customer data has monetary value for businesses, many are choosing to ignore it.
While this may at first seem a puzzling trend, it’s important to remember that businesses can often see the use of customer data as quite risky. For example, there’s the issue of privacy and appropriate data management.
As a way of actually effectively harnessing data, Gartner recommended businesses start to think seriously about applying infonomics principles to customer information. In effect, this means managing customer data in the same way as any other business asset.
“Organisations should use valuations of their customer data as the basis for prioritising investments in technologies that help them acquire, maintain, enrich, archive and apply information. They should also calculate thorough business cases when designing monetisation products,” said Douglas Laney, a vice president and distinguished analyst.
The report also noted the importance of appropriate privacy when utilising customer data. In most cases, taking advantage of data that’s specific to a customer or set of customers means adopting another set of risks. When monetising customer data, there is another level of added risk.
“Organisations must evaluate the associated risks in relation to data ownership and data privacy when developing a business model to monetise customer data,” the report said.
“Companies have to determine their risk tolerance in relation to how they want to monetise their customer data – for example, whether they want to design information products using anonymised or aggregated personal data.”
As with many business trends, data management can be made significantly easier if the right strategies are in place from the start.
When businesses start to think seriously about data, there are significant benefits. A report developed by Forbes Insights and Teradata explored some of the advantages of data and analytics, and found that by analysing customer transactions and location data, businesses could achieve measurable revenue impacts.
“Big data initiatives are reshaping the world as we know it. By crunching ubiquitous bits and bytes, organisations are discovering new and innovative ways to design cars, test drugs, sell swimsuits and issue credit cards. Critical business decisions are now being driven by sophisticated algorithms,” the report explained.
In effect, access to highly relevant information means companies can influence the development of new products and quickly seize new opportunities.
At a more macro level, businesses can also better understand customers – something that’s certainly important, and difficult.
Data means it’s no longer difficult to see when customers get in touch or why.
Data means it’s no longer as difficult to see when customers get in touch or why, and the reasons behind customers choosing to leave the business. What’s more, it can also be far easier to prevent customers leaving for the services of another company.
However, effectively harnessing data will mean organisations need to access a significant quantity, and this signals a clear need for effective control over information.
Effective data governance is the answer here. It’s something that can often seem difficult to effect, but it’s a simpler undertaking with the right implementation approach. By working with Mastersoft, for example, businesses can utilise a governance framework that has a number of key advantages.
- Lifecycle governance: This means the complete lifecycle of information, from when it’s initially created right through until it’s destroyed.
- Alignment: This approach aligns both business and technical stakeholders, something that’s a key part of a framework.
- Scalability: Instead of a single framework for businesses of all sizes, the Mastersoft framework is implemented at a pace that fits the needs of the business.
Reach out to Mastersoft today to learn more about why it’s so important to leverage customer data, and the governance approaches necessary to ensure this is an achievable undertaking.
The quantity of data is only likely to continue growing, and businesses need to be prepared to both take advantage of it and ensure it’s governed correctly.