How to monetize your content and machine data?
Content (or data) is thought to be the most lucrative area to monetize. Monetization means organization’s ability to generate value out of data, more precisely; how able it is to exchange data to money with a customer.
In my previous blog post I wrote about three high level capabilities, which are required while moving to digital business models: Platform, customer experience and content.
The last one, content (or data), is often thought to be the most lucrative area to monetize.
At the moment when companies are talking about big data or analytics, quite often the objective is internal: How to use data for internal efficiency by finding a new ways to lower the operational costs. That is absolutely the value for a company as well, but in this blog post I will focus to the commercial transactions with data.
Before entering into commercial data transactions, it’s good to categorize data driven businesses and understand the category which company targets with its business idea. It is important to understand this so the value is not given away with low or no compensation.
The first level of data services is data stream services. In such the first option is to sell the raw data, which is generated by the machine. The bit more sophisticated version is data preparation services, which means that the company takes data from several sources (machines, public services, internal systems) and joins those to combinations, which are demanded in the markets.
The second level of data services is insight services. There the first option is reporting. Creating or composing a predefined reports (e.g Energy consumption report) and sell those with transactional based business model. The second option is analytics services. This may contain reporting, data filtering or data discovery services or any combination of those. (One might think that Analytic services belong to third category due bits and pieces of consulting embedded into it.)
The third level of data services is action services. Action services are remarkable step towards consultative and operational business models. The first option in action services is process design service. It is consultative use of data, where company helps and advises its customer to be more productive and profitable with a new way of operations, proven by data and analytics. The second option is process execution, where the company may operate the process or a piece of the process in customers’ business operations. The idea in this option is, that because of data and analytics, company can run the business process more efficiently than the end customer has capabilities to do.
What ever will be the mode or modes of data driven businesses they need to be packaged according to the demand of the end customers. This brings together the second capability, Customer Experience Management, to form the digital business model cornerstones.
While starting the journey to the data driven business, three areas of need to be considered: Platform, the third cornerstone of digital business model; where shall we run and how will we distribute the data driven products or services. People; do we have digitally savvy talents in our organization or do we need some external resourcing to start with. Perception; how can we see the value of the data, or the demand for the data especially in the long term business relationships with the same customer and when both companies have framework of physical transactions in mind.
It might be good to talk with external organization to jointly set up the roadmap and capabilities in order to fasten time to market, and not loosing opportunities out there.
This blog is part on my series of blogs “Sleepless in Boston” while participating MIT Certificate training in innovation, digitalization and suffering from heavy jet lag. It is adapted from MIT ‘Revitalizing your Digital Business Models’ education Principal Research Scientist, Barbara Wixom.