This article first appeared on Qatar Tribune
Data is the business buzzword of the era. But how do companies locate it, analyse it, shape it, and use it to drive growth and profitability? Firas Sleiman, leader of PwC’s Qatar technology, digital and cyber practices, has four key recommendations.
Data is the new oil. Just one look at the market capitalisation list for the highest valued companies on the planet, and you quickly notice the common denominator: they are data companies at the core.
What is a cryptocurrency? It’s data. In particular, monetised data, where a marketplace has been created to trade several bytes of data, which have been deemed “valuable” as a commodity. What is a transaction history, or a patient record, or an automated delivery route, or a demographic profile? They are all intangible strings of binary data, something you could put on a memory stick or send in an email or post to a website.
Data is now so valuable that it is outstripping every other form of corporate asset to become the primary resource of the digital economy. Data is not just information: it is the growth driver for today’s most dynamic companies.
This is a reality that has taken shape very quickly, and many businesses have not yet caught up with the pace of change. Only 20 years ago we were still talking in terms of kilobytes of data. But in every decade since, we have seen the amount of data being generated on a daily basis exponentially grow, going from kilobytes to gigabytes to terabytes to petabytes.
Big Data is born – massive amounts of structured and unstructured data, some organised, some correlated, and others completely random and waiting for a purpose. The focus of corporate competition moves from building tangible products to managing intangible assets, and generating value from insights, analyses and patterns. For many companies, the data that is becoming the core of their business is something they already have – but may not know how to benefit from.
Unlocking the value of data
Companies that do understand their data and how to exploit it are among the world’s most valuable. Just think of Apple – it is no longer primarily about selling devices, it is about your music, your movies, your photos and filters, your apps. Google is about maps, knowledge, self-organisation, and advertising based on knowing who you are. Microsoft is about your office, your intellectual property, your work. Facebook is about your habits, your sentiments, your identity, your connections and your messages. Even Tesla is becoming as much about road mapping, usage patterns and understanding your driving as it is about electric motors and batteries. Uber is about your location, your rating, and matching the nearest GPS location of your driver to get you to your destination faster. All of these companies run on a single fuel: data.
We think there are four key steps that companies need to take to gain control of their data and harness its value.
+ Liberate. Ask, where is your data? It may be trapped in applications like your ERP system, your customer accounts, or your product documentation repositories. Don’t think of those applications as storage, think of them as jails for your data. Invest in liberating data from the different jails, and invest in consolidating it, and then you can begin to work on releasing its true value.
+ Understand. When we work with companies we talk about correlating data, which means understanding how seemingly disparate data items can actually point to the same reality. You may find you have five or ten different types of data that all refer to the same person or entity, so we can add metadata that unifies many data points around a common subject. And suddenly that jumble of data is clarified, and becomes understandable hence valuable.
+ Analyse. Now we have data with structure, which means artificial intelligence (AI) can get to work on it. Are there correlations within the data? Are there oddities, singularities or patterns that point to opportunities, like opportunities to improve efficiency, or find untapped markets, or discover which investments are working and which are wasting money? A company doesn’t even have to know exactly what it is looking for: using ‘bottom up analysis’ it is possible to find answers to questions you were not even thinking of.
+ Monetise. The final step is the biggest one, because it involves a leap of creativity. It is no accident that this is where companies often use the help of advisors and consultants to turn all their data work into growth and new profits. The challenge is to find new revenue streams that are data-driven – but once you begin the opportunities are endless. Some companies generate so much data that once it is structured it is immediately monetizable. If insights have been extracted they too are marketable, but they can also be put to work in better understanding what customers want and how transactions can be bundled, or in applying predictive techniques to operations and markets to cut costs or anticipate new customers.
These are the steps that real-world companies are following. Already a third of all businesses are commercialising or sharing data for revenue. These are the fastest growing companies in the world – it is forecasted that the data monetisation market will be worth at least $278 billion globally by 2026, up from $185 billion in 2019, and at a CAGR of 6% yearly1.
This is the size of the data opportunity, and it is growing fast. Put simply, the data opportunity is already too big to ignore. This is the economy of the future, and companies that implement a structured data strategy today will seal their success story of tomorrow.
1) Study by Research and Markets in 2022
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