Data is the new oil, it’s often said. But prospecting for oil can be difficult, extracting and processing it is fraught with danger, and using it has numerous downsides.
The same with data. Finding good clean data isn’t always easy. And using it can be difficult and even counter-productive.
And yet there is undoubtedly massive value in data. So how should organisations monetise this increasingly ubiquitous resource?
The first thing to realise is that there are different sorts of data.
- There are the individual data trails that we all leave. Understanding and using these can be immensely valuable.
- But even more valuable can be data about small and large populations, the amalgamation of data about individuals.
- And on to that we can overlay data from other sources – the economy, the environment, social trends and legislative developments.
Together these can form a rich picture.
But a rich picture of what? As well as exploring the types of data we hold we need to understand how it relates to time. Is it a reflection of what has already happened? Is it showing us what is happening right at this moment? Or is it designed to tell us (or rather, help us guess) what might happen in the future?
Data isn’t simple. And using it effectively isn’t simple. The famous ad man David Ogilvy quoted (or rather mis-quoted) A E Housman when he said “Research cannot help you much… You have actually got to use judgment. I notice increasing reluctance on the part of marketing executives to use judgment; they are coming to rely too much on research, and they use it as a drunkard uses a lamp post, for support rather than for illumination.”
The point is that data can be used as a guide to what might happen, to illuminate a possible way forward. But it should never be used as the sole support for action.
A lot of people talk about “data-led” strategies. However, this can be dangerous. Data does have a part to play in helping people arrive at a decision. But data can never reflect the totality of what has occurred or is occurring, and an analysis of data can never deliver a certain prediction of the future.
But get it right and the opportunities are almost boundless. That’s because data is all around us. It is big business: the size of the business analytics and big data market is around $150 billion pa and growing fast.
Data is there to be used. But in order to use data we need to ask ourselves certain questions including: Is the data accurate? Is the data complete? And will the data be relevant in the future given social or other changes?
Very practically, we also need to be certain that is value in the data that we can utilise. For instance knowing that a certain population is left-handed is useless to most organisations.
And we need to ask ourselves whether it is allowable to use the data. We need to ask ourselves: Is it ethical to use this data? And will we be compliant with regulations such as the GDPR if we do use it?
Once we are satisfied with the answers to those questions we need to understand just how we can use the data. What is the cost of doing so? And is our use of data sensible – for instance if we use data to micro target our audience are we simply reducing the opportunity we have to sell our product.
Another area we should consider is whether we using data as fully as we might. Perhaps we gave focussed on marketing and sales and are hoping to use data to develop a detailed understanding of “multi-channel” consumers. But we should be able to use data across the organisation. In HR, in operations and logistics (think of just in time manufacturing), and in IT and cyber security.
A great deal of data is free. But not all of it. And the data we need may well be expensive to collect and analyse. And if it is expensive then we need to be confident that we are collecting it, analysing it and using it in the most appropriate way. Because used badly data, like oil, can be very damaging.
Our next Data Economy digital magazine will be published in June 2018; we still have some thought leadership slots available within this magazine, for more information contact Adam Robins on firstname.lastname@example.org or on +44(0)20 8349 6467.