Hey CDO, you need to demonstrate ROI, reduce time-to-market and monetize data and you shall succeed. Yup, easy-peasy.
In a fresh (31.3.2021) study about successful CDOs, Gartner analyzed, among other things, the following:
CDOs who successfully demonstrate ROI from their D&A investments are 1.7 times more likely to be effective at consistently producing clear business value for the organization. Those that reduced time to market were 2.3 times more likely to bring value, and those that succeeded in monetizing data were 3.5 times likely to create clear business value.
Those are nice numbers and might make a CDO wonder - how to achieve those? I have a few customer cases to show in my pocket but first, remember: data is the second valuable asset of your company. The most valuable asset is employees. Employees design and execute processes where the data is created. They use it in their work and enrich it on the way.
Indirect monetization of data
First - don't think about monetizing your data. Yes - stop thinking about how much revenue and profit your data can bring to you. Think first what your company's mission is - why do you exist? Yes - do it, for example, some Simon Sinek's Golden Circle can help you with it. When the mission is clear in your mind, understand what data you have in your systems and devices. The hard part comes next: innovate how that data can help you and your company in your company's mission. Here is an example of a Skiing resort that I often visit.
Levi is a mountain in Lapland and has an extensive skiing resort with multiple activities around it. Their mission is to "move people". They get much sensory information from lifts, snow guns, weather sensors, ski buses and snowcats. Levi also has lots of information in their systems like point-of-sales, technical slope maps, ski equipment rental systems and loyalty systems.
All that information already serve a specific purpose. But what if you combine this information with other available data sources? National Land Survey of Finland provides extremely accurate elevation maps, and OpenStreetMaps give you the roads, buildings and landmarks information. The Finnish Meteorological Institute provides weather forecasts. Levi combined all this information to create a full-experience mobile app for its visitors. The Levi Resort App provides a detailed 3D map projection of all the slopes, their condition, temperature, wind and your location in there. It also has all the real-time information of ski buses, and you can use the App to rent equipment beforehand or get loyalty points in local stores and restaurants. It gives the ski resort customer a full experience of everything that happens around you in real-time. It also provides an emergency channel - you can alert the staff directly with your location if you get injured or in trouble on the mountain. Demonstrating ROI occurs via customer satisfaction and increased use of services.
I call this indirect monetization - the data from internal and external sources create additional value by leveraging the customer experience to the next level. The same method can be applied in any business but requires the innovation of how to use the data to step towards the reason your company exist - mission and "why".
Direct monetization of data
Direct monetization is simpler but usually possible only in rare cases. What data you have that might be valuable to others? Can you sell your data via APIs to other companies that can use it as a part of their service? It can be, for example, customer behaviour information in your business that might be valuable for other companies. The simplest example of this is Google selling location information and that information can be mashed up to create new value. Take any taxi app for an example.
The service can also be an algorithm that provides refined data. For example, the dynamic pricing of a highly volatile product is an excellent example of this. Let's take any gasoline retailer for example. Every sales transaction on the station could be sent to a third party dynamic pricing service. There are several available "as-a-service". The local prices on each station can be adjusted based on demand in a matter of minutes. The accuracy and agility of pricing generally lead to 5-10% better profits. For CDO, demonstrating the ROI is straightforward. In this case, direct monetization occurs on both sides: The providers of dynamic pricing APIs have monetized their algorithm as-a-service. The oil retailer can use their event-level information to adjust based on demand vs supply. Dynamic pricing works similarly in food deliveries or logistics - everywhere where electronic prices are used.
How to enable monetization?
Either of my example cases couldn't work without connecting the information and automating the processes. Levi case uses an API layer that serves the mobile App directly without any additional cloud back-end. The API layer is a set of business and tech functions like "get weather data", "set ski bus location", or "add loyalty points". They are implemented on top of the integration platform (as-a-service, iPaas). These APIs are the backbone of the App. Obviously, the iPaas cannot fetch the data directly from, for example, each IoT sensor every time the App needs it. There are hundreds of concurrent live requests occurring all the time slopes are open. The solution is a Digital Integration Hub (DIH) approach enabled by an integration platform-as-a-service. The previous link goes to Massimo Pezzini's article about the topic. If you are interested in the more technical side of how the DIH approach was used in Levi -case, you can find an article about it here.
In the dynamic pricing case, the requirement is that your sales transactions are going through an API and the pricing process is automated. All quickly done with iPaas capable of APIs, API management and process automation. In this case, the gasoline retailer use Frends enterprise integration platform to receive each sales transaction, update the pricing system and transfer the updated prices back to the gas station. No, it does not occur during the fill-up, but very frequently during the day.
In both cases, Frends enterprise iPaaS enabled the rapid time to market and more cost-efficient way to develop than other approaches like microservices coded from scratch. The key to rapidness is a low-code approach for both: API development and process automation.
Both cases were implemented with Frends enterprise iPaaS. So - if you want to demonstrate ROI, monetize your data and bring it fast to market - you can achieve it with a proper integration platform-as-a-service and use modern approaches like Digital Integration Hub and modern process automation.