Data monetization sounds great, doesn’t it? You probably already have a lot of data; you just need to turn it into money. Pour in enough money and plug in the right technologies, and you are monetizing!
Not so fast says Bill Schmarzo, Data Science and Data Monetization Strategic Advisor, who says that “For most organizations, data monetization is a big waste of time.” Yikes! But what is Bill talking about here exactly? Well, like a lot of sea-change type issues in a corporation, it really is up to leadership to make the necessary changes and mandates to move a company forward, not just in cost and budgeting, but in terms of process, organization, and culture.
Bill ran a LinkedIn poll and found that 54 percent of respondents report that the data and analytics organization typically reports into the CIO, with only 21% reporting into a CEO or business manager. This, Bill states, is the primary reason data monetization strategies are doomed to fail from the start. If data and analytics reports into the CIO, it is viewed internally as a technology exercise, not a business exercise, to the executives and business teams.
According to Mr. Schmarzo “If data and analytics are viewed as technology capabilities and not directly focused on deriving and driving new sources of customer, product, and operational value, then there is no data monetization conversation to be had. Period.”
Boom! Bill digs deeper into the reasons for this, and a lot of them echo previous arguments for why the CMO roles need to report to the CEO. First is the age-old argument that the CIOs primary mission is to “keep the lights on” in old IT parlance. They have to keep all the technology operational infrastructure and systems, like the ERP, CRM, HR, CMS, and CDP platforms, up and running or the whole business falls apart.
CIOs see protecting their technology stack from downtime as their top job and responsibility. The problem with this is obvious, which is that data and analytics, beyond the maintenance and uptime of those systems, is of lower importance to CIOs. Critical business operations will always take precedence over anything else.
The second major issue is that Bill feels data and analytics leaders, aka Chief Data & Analytics Officers (CDAO), must be equal to the CIO when it comes to senior level discussions surrounding the company’s technology, data, and analytics investments. He must have the weight in the boardroom to push for data monetization technologies since the CIO will deprioritize them for operational system investments.
The only way for companies to truly leverage data for monetization is for the Chief Data & Analytics Officer to report directly to the CEO, GM, or COO, according to Bill. If data is truly the fuel that drives modern businesses, it needs to take prominence in the senior leadership team to ensure proper representation can be given to its importance to future growth.
The rationale for this makes a lot of sense. For Data & Analytics to be able to move the needle on business performance, they need to be able to drive collaboration across the business lines to identify, validate, value, and prioritize the use-cases they need to apply budget and resources to. Data & Analytics suffers from having too many use-cases, not too few. For a CDAO, if they spread their resources across too many use-cases, they will under-perform in each of them. This is why it’s critical that the CDAO and their staff report directly to the CEO or senior business manager, so they can prioritize the development and application of data & analytics budget, resources, and assets.
Finally, according to Bill, a core role of the Data & Analytics group is to find and acquire new sources of data (behavioral, transactional, demographic, attitudinal) to enhance the data coming out of the operational system. These types of customer-centric data sources just don’t interest or intersect with the CIO much at all. But they are what is needed to move toward a true modern data-driven, customer-centric organization.
While the technology considerations are paramount, the importance of data & analytics leadership for data monetization success cannot be understated.
For companies to begin their data monetization journey, they must have the right technology underpinnings, like a customer data platform, to serve as a foundation to ingest, integrate, unify, and deliver that data to other platforms to do things like personalize the customer experience at scale.
A centralized customer data platform will also provide the collaborative infrastructure between departments that will enable them to share unified SCV data profiles and leverage them for value, creating a data-centric foundation to align the company against.
But, none of this will be successful without the right leadership buying in, and the elevation of the Data & Analytics leadership and department top reside under a senior business manager like the CEO, not the traditional CIO reporting structure.
This is required so data & analytics can no longer be seen as a technology function, but a revenue-driving one. This is the only way budgets and resources can be applied to the most forward-looking, data-driven business initiatives.