Information warrants its own strategy to ensure its economic benefits are fully maximized.
The emergence of a chief data officer (CDO) in many organizations and across industries indicates a growing recognition of information as a strategic business asset – one distinguished from the technology through which it flows. By 2020, Gartner predicts that 10% of organizations will have a highly profitable business unit specifically for productizing and commercializing their information assets.
According to Douglas Laney, vice president and distinguished analyst at Gartner, to achieve direct monetization of data requires supplementing your existing business model. This implies creating a team with a specific job of defining, developing and productizing the market for the information asset, similar to the product development life cycle established for managing and marketing traditional products.
Infonomics, the theory, study, and discipline of asserting economic significance to information can provide a framework to apply both economic and asset management principles and practices to the valuation, handling and deployment of information assets. CDOs are well poised to lead these new initiatives.
In most organizations CDOs will participate in, if not lead, data monetization efforts as a way to demonstrate their own value. This leadership can play a pivotal role in their growing influence. Gartner estimates that by 2020, 50% of leading organizations will have a CDO with similar levels of strategy influence and authority as their CIO. To gain authority, CDOs can verify that their organization owns and controls its data and that it has probable future economic benefits.
Read more: Keys to Success for Chief Data Officers
Create an information strategy
Because this role and its functions are new in most organizations, the majority of these data leaders are learning on the job. Their first task is to create an information strategy that both mitigates risks and improves business outcomes (or balances “defense versus offense” as some say). The most difficult issue for many CDOs is creating relevant metrics that tie the activities of information management to key business drivers. While monetization of data is a relatively straightforward way to demonstrate value, determining which data assets can be monetized, and how, is not an easy task.
Although stakeholders demand better availability and quality of information, they often are unsure as to the exact mechanics of making that happen. When information-related initiatives falter, business users are apt to hastily blame IT, and now the CDO’s office as well.
The position that the CDO holds is a difficult one—balancing the needs of the business and capabilities of IT. Many newly appointed CDOs come from the business and are meeting change resistance, particularly from the IT department over the management and governance of information assets.
One way in which CDOs can garner support is by recognizing the value of Internet of Things (IoT) projects, approaching them with the same rigorous business requirements, architectural standards and governance that are applied to traditional information management projects.
“Capabilities inherent within IoT hold out the promise of transforming business models through increased efficiencies and business model risk reduction to degrees previously unimaginable within value chains dependent on machine technology,” says Michael Moran, research director at Gartner. “These capabilities will serve as the catalyst to directly address levels of uncertainty intrinsic to business models based on guaranteed levels of performance.”
Moran says that high-fidelity mastering of IoT data objects will serve as a key enabler in the transformation of business models from “guaranteed levels of performance” to “guaranteed outcomes.” By 2020, IoT and digital business will drive requirements in 25 percent of new information governance and master data management (MDM) implementations.
Whether IoT, master data, transaction data, customer data, or even enterprise content, CDOs have their work cut out for them to develop strategies for monetizing, managing, and measuring these critical information assets as actual enterprise assets.