Welcome to Part 4 of this 5-Part blog series on Digital Transformation (DX). This blog focuses on one of the three strategic priorities for the enterprise – Data Monetization, the leveraging of data to create new digital revenue streams.
Data as a Competitive Advantage is Superseded by Data Monetization
Two years ago, the opportunity around data was largely seen as swiftly responding to opportunities and with superior intelligence. Today, organizations see the potential data holds in creating new revenue streams.
The Data Economy
Creating new revenue streams by leveraging data will require evolving your business model. Schindler Elevator is a great example of how an internal operational transformation has led to new digital revenue streams.
Schindler set out to create a competitive advantage around the service times for its elevators. By placing sensors in its elevators and building a platform for service technicians to tap in to,Schindler reduced average elevator repair time from 23 hours (an industry average) to 3 hours.
This is because the Schindler technicians are able to remotely access information about what is not functioning properly in the lift, ensuring the correct spare parts are brought to the site.
Additionally, the technicians can readily access information from their inventory management systems about spare parts availability.
While the original business case was an operational one, to improve the downtime of elevators and provide a competitive advantage, it quickly expanded. The data from those sensors not only increases service efficiency and improves customer retention; but is something that Schindler can sell as a service to facility managers who have SLAs for their tenants – in turn creating an additional revenue stream for Schindler.
New IT Capabilities Required for Data Monetization
Data monetization requires a new set of IT capabilities that span data exploration, data refining and data distribution:
- Data Exploration – You organizations will need to develop new skills around manipulating unstructured data. It will not only require new talent, but also intuitional knowledge that will guide these data scientists in making judgement calls about what is valuable to the market
- Data Refining – A series of processes and governance around the orchestration of information in your organization as you seek to refine it into a marketable product. In many organizations this sits under a central analytics function and is supported by governance around data value and privacy
- Data Distribution – Distribution of your information-based services will be enabled by industry clouds. It will require you to build a secure, cloud based community where, ecosystem participants can build their own applications.
Part 5 of this series uncovers more details around the Strategic Priorities of a Digital Strategy, starting with Digital Business at Scale, to help you develop IT capabilities that can help you create an operating model to run new businesses at scale.
Meredith Whalen is Senior Vice President for IDC’s IT Executive Program and Industry, Software and Services Research & CIO Executive Council.
Visit idc.com/itexecutive for more resources geared towards the IT and LOB leadership teams.