Data Analytics: Extracting value from the ‘data pandemic’

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Data Analytics: Extracting value from the ‘data pandemic’
Companies that understand the value of data will be best positioned to thrive in an evolving marketplace.
Photo by Franki Chamaki on Unsplash

Across Australia, lockdowns, circuit breakers and restrictions have forced many companies to adapt to new ways of doing business to keep their heads above water.

For many, that has meant digitalising traditional business models, moving online and accelerating the adoption of technology to engage customers and compensate for the absence of foot traffic or the ability to be present.

New super apps and digital marketplaces have enabled local or small businesses to take a digital leap forward, alongside more established and digitally savvy enterprises. This has created new opportunities for business growth and monetisation across the economy, because we know that where there is technology, there is data; and where there is data, there is what is now increasingly recognised as “intangible value.”

That data will vary from business to business, but can almost always be worth something as a strategic asset. Types of data might include customer data, such as personal, demographic and operational information detailing how customers are using your product or service and interacting with your brand as well as sales or marketing data tracking online activity and potential buying behaviour.

As businesses integrate digital platforms and channels to adapt to a new marketplace dynamic, where you are more likely to engage a customer online than in person, they will generate new intangible assets. The challenge for businesses is to work out how to use this increasing amounts of data in ways that generate value and then evaluate how best to protect it once its value is established.

An opportunity exists for Australian companies to open new doors by monetising their data and creating opportunity and value where it did not exist before. The starting point is to build a business case that enables a business to determine the potential economic return from each data asset it has in its right business context.

By properly building and analysing each business case, it is possible to work out how best to utilise data and understand its potential worth. This business case-driven approach enables business owners to determine the potential returns and the investment required in any potential risk associated with extracting value from that data.

It is a process that can reap rewards. Take, for example, a shopping centre owner we worked with recently, where we identified 19 different end-use cases for its data and multiple business cases for the data set overall.

Here, we used a proprietary three-factor model that takes into consideration the available sets of data, data collection methods and the top possible use cases in which the data would generate revenue.

We then estimated the overall value of that data, along with the potential costs and risks and the return on investment (ROI) required to monetise this data successfully. This analysis of quantitative data and its contextual and qualitative factors helped us identify opportunities such as linking retailers to the shopping centre’s’ gift card programme in more meaningful ways to increase ROI.

In another example, the shopping centre owner is now able to use its parking data and in-store traffic data to estimate the number of users who value the parking benefits offered by the shopping centre. In addition, data on foot traffic patterns could be digitalised to demonstrate to potential tenants the importance of strategic store locations and layouts.

The shopping centre owner now has the insight to inform new business opportunities to balance the impact brought about by changing consumer behaviour patterns created by the pandemic. Rich data enabled the company to derive better insights and the shopping centre can now be viewed as a generator of intangible value as well as a traditional tangible commercial property asset.

The lesson here is that even the most traditional businesses should plan to discover, manage and protect their latent or emerging intangible assets, particularly as they embrace more data-generating technology.

And if you are starting a business today it is critical to understand the data and information that you have and that you might potentially capture, and how that can be monetised to increase your business value over time.

Generating intangible assets goes beyond data. For many successful companies, it is the things they do differently that become the intangible assets that create lasting value — from recipes to systems and processes to branding and culture, and even service — and that build and sustain profitability over time.

That is what differentiates mega-chain fast food companies from your local café or standalone burger joint. Not everyone sets out to be a global multi-national, but if you are starting a business it is increasingly important to have a plan around how to identify, grow and manage your intangible assets, as that is likely to be where at least 90% of your business value is going to be.

Companies that understand the value of data, alongside the differences that create market share, will be best positioned to thrive in an evolving marketplace. While intangible assets are often talked about in the context of large enterprise and start-ups, it is important to note that the principles apply to traditional or local businesses too and, where there is data and difference, there are intangibles and value.

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