2:03 AM, February 24, 2024

Data: fuelling the new economy

| The European |

Data has become the lifeblood of modern commerce with over 2.5 quintillion bytes of this vital resource being created every single day. Everything from Internet of Things (IoT) devices, including smart TVs and industrial sensors, to social media posts and emails are all adding to the huge amount of data stored in data centres and the cloud.

Companies (from those providing financial services to those reporting on world aviation news) that are able to effectively utilise the data they hold won’t just gain a competitive edge, they will also be well-positioned to identify new business opportunities and uncover actionable insights into essential corporate operations. Yet, around 80% of data in existence today is unstructured, such as raw text documents, media files and images. This data doesn’t fit into traditional databases and is extremely difficult to meaningfully analyse with conventional algorithms, making it of little use to companies unless it is turned into a more manageable piece of information.

Arvind Purushothaman, head of Data & Analytics at information technology services firm Virtusa, believes that harnessing the full value of data isn’t an overnight process for enterprises. “The biggest barrier to getting value from data – and the one most companies are still struggling with – is gathering, storing and formatting it all correctly. Enterprises have data in dozens of different formats, locations and languages around the world. On top of this, there are increasing levels of unstructured data that need to be absorbed and processed,” says Mr Purushothaman.

Valuing data

The monetary value of data is growing rapidly, too. Research firm Gartner estimates 10% of firms will have a pro table business unit solely focusing on commercialising their information assets by 2020 and that companies will be valued on their information portfolios within the next two years. Accurately valuing company data is no easy task with this intangible asset not fitting into established balance sheet calculations. Attempts are being made to create a mainstream data valuation method but there is still no accepted model that can be applied to all companies.

Yet, there have been a number of high-profile cases of corporate data reaching extremely high valuations. During bankruptcy proceedings in 2015, casino operator Caesars Entertainment had its Total Rewards customer loyalty scheme valued at $1bn by creditors, the largest asset held by the rm. Former Vice President of Total Rewards Joshua Kanter, went as far to say: “Big data is even more important than a gaming licence.”

Digital native companies, notably Facebook and Google, are leading the way in extracting the most value from the customer data they hold. “Data is at its most valuable when organisations can use it to fully understand their customers and offer personalised experiences. For example, our research shows that 32% of consumers spend more with retailers that offer a personalised experience than those that don’t,” says Paul Crerand, Director of Solution Consulting at so ware company MuleSo.

Practical solutions

Investigating previously collected data in an attempt to reveal useful insights is a fair starting point for enterprises looking to get the most value out of their data. But this asset is worth more when it is analysed in real-time. “Data is highly valuable as a long-term, strategic asset to any business, but that isn’t the full story – put simply the more agile an organisation can be with its data, ideally in real time, the more value it can unlock. is can support insights that have an immediate impact on operations: and even inspire the business to find creative new ways of applying live data,” says Huw Owen, Vice President and General Manager, EMEA and APJ at database vendor Couchbase.

One of Couchbase’s customers, American professional baseball team the Cincinnati Reds, has long used the data it collects on the field to help improve the overall team strategy and identify weakness. But, thanks to near real-time data analysis, the billion dollar team are able to enhance the fan experience through live performance statistics and real-time betting odds. “Essentially, live analysis has opened a whole new window of opportunities,” adds Mr Owen.

There is no doubt that advancements in big data technology have made it increasingly possible for firms to turn their raw data into a source of revenue. A 2017 McKinsey Global Survey on data and analytics found that 45% of respondents at high-performing businesses have developed completely new business models to monetise data. Even companies that don’t want to make a major shift into new product areas or markets can benefit from the better utilisation of data to discover what consumers want and how to improve operations.
Jon Bradbury, a partner at management consultancy the Berkeley Partnership (who has advised a number of businesses on data and analytics projects and on how to unlock greater business value from data), says: “While exploiting the value of big data can be beneficial to all businesses, in some industries it is becoming increasingly critical to their survival. For example, consumer goods companies, which have traditionally sold to other businesses such as large retailers, are responding to market trends and placing greater emphasis on online sales and marketing directly to consumers. In order for this to succeed, they need to know their audience – and this requires sophisticated use of data and analytics.”

Massive amounts of highly interesting business data will likely be held outside of the company, especially on social media. Of course, without collecting and translating this data into relevant information, it has little value. By using data analytics tools to trawl through platforms like Twitter and Facebook to categorise comments as being positive or negative about the brand or company, an overall sentiment score can be produced, as well as flagging up problem areas that are repeatedly mentioned in posts. This is only one step in the process of making this publicly available data even more valuable.

“If you want to know how much to invest in digital advertising or social media teams that influence that score, you need to understand the link between social media sentiment and increased sales. This is incredibly valuable information for a consumer goods company, and that was just one of the big questions answered by the consumer data analytics centres we helped this company to setup,” explains Mr Bradbury.

Potential pitfalls

Even the most ambitious businesses need to be aware of the limitations they face when attempting to turn raw data into valuable information. The sheer volume of data, often held in various data silos across an organisation, will require different approaches to get under control and understand.

“Many businesses don’t know what ‘good’ looks like, and focus on the art of data science rather than the commercial outcomes they want to achieve. Businesses need to ensure they have a clear idea of what they want to learn from data, instead of diving into analysing huge quantities of information without a clear result in mind,” says Mark Hinds, CEO at data science company Polymatica.

Forward-thinking business leaders have been strong proponents of data being a valuable asset, with Intel’s CEO Brian Krzanich revealing last year that he believes data is the new oil and will transform virtually all industries on a fundamental level. In a CapGemini/EMC Big Data survey, 63% of respondents believe that the monetisation of data may soon become as valuable to their organisations as their current products and services. Statistics such as this indicate that firms should begin planning now for a future where data is much more valuable than it is today or risk falling behind their more advanced rivals.

Finding new ways to both analyse and then monetise data should be a key priority for any business wanting to stay competitive. Hiring and retaining top-tier talent, such as data scientists and data engineers, is extremely important if any type of data analytics program is to be successfully implemented. When used in the right way, data has the potential to bridge the gap between what customers want and what companies offer and, in the process, provide a better customer experience. In the near future, the value of data held by most businesses may even eclipse the price of their physical assets.

“In order to get the insight they want and need, businesses should make sure they ask the right questions of their data. Doing so will help focus their attention on the areas that require analysis, rather than wasting time gathering information on areas that will not benefit them,” concludes Mr Hinds.

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