Nearly every modern organization collects and stores vast amounts of digital data. Thanks to advancing technology and shrinking infrastructure costs, this intelligence has become quite robust, detailed and powerful. Today, many organizations recognize their data are valuable corporate assets not just for internal consumption, but also for third party use.
The DataStreamX team has observed several motivations for opening up access to data: Impact Motive, Influence Motive and Profit Motive.
These motives are not mutually exclusive; instead, they are mutually reinforcing. Vendors entering the data economy will typically have one primary motivation, but the benefits will be multifaceted.
Impact Motive
Opening up data resources to external users fuels innovation and learning with a scope much larger than what was capable when data were restricted to internal consumption. The Impact Motive is not entirely altruistic, however. Making data more accessible also improves relations with business counterparts. As such, we have found three key objectives under the Impact Motive:
- To drive social change - Example: Wearable device manufacturers opening data to guide to ideal consumer behaviors in health and wellness
- To provide transparency - Example: Governments opening data on budgets and spending for public accountability
- To improve an ecosystem - Example: Major retailers providing sell-out data to distributors and manufacturers for improve operations throughout their supply chain
Influence Motive
Organizations utilize their data assets under the Influence Motive as a way to shape behaviors and opinions. Providing access to data also encourages users in a given industry or geography to standardize on a set of analytical procedures. Thus, we’ve observed three key objectives for organizations seeking to achieve influence with their data assets:
- To solidify thought-leadership - Example: “Lighthouse” institutions serving as barometers and key references for an industry’s health and trends
- To establish brand reputation - Example: Organizations elevating brand profile as innovative and iconic institutions
- To support an industry agenda- Example: Pollution monitoring to promote responsible procurement, consumption and disposal
Profit Motive
Data monetization business model has existed for many decades, such as in research, advertising, insurance and finance. Organizations entering the data economy that are primarily influenced by the Profit Motive tend to focus on the following objectives:
- To monetize data as a primary business operation - Example: Businesses with a “data-first” foundation, such as financial products
- To monetize data as a new source of corporate growth - Example: Slowly growing, established public companies pressured to meet profit and growth expectations
- To monetize data to support other operations - Example: Start-ups using data sales to internally fund their core business model instead of seeking dilutive external funding
It is important to first understand your organization’s motive for monetizing data as this will shape your approach to the market and help to focus which potential buying groups you will go after.
P.S. If you have missed out on our "How to Price Data" series, click on this link to read it!
