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Getting More Out of Data
I recently ended my term as chair of American Business Media's Business Information Council, but I remain interested in the concept of building more data-driven businesses. Those businesses offer the advantage of providing potentially valuable information to our existing customers while giving us a way to reach out to new markets. We now have several products in the works that are fundamentally data-driven, relying for their revenues on subscriptions and one-off sales rather than advertising or sponsorship. But I'd like to see us develop more in the future, not just in the Legal Division but in our Real Estate group as well as in the Interactive Marketing area.
The Harvard Business Review recently published an article called "Put Your Data to Work in the Marketplace" by Thomas C. Redman (September 2008 issue). His contention is that many businesses already collect a great deal of data about their customers, markets and competitors, and could turn that data into new revenue streams. His article provides nine strategies that organizations can use in building such businesses. Let's see if any of these strike a chord and lead to any new ideas for businesses which we could develop.
Nine Strategies to Bring Data to Market
Each numbered strategy below is accompanied by an example (in italics) of how it might be—or already is being—executed.
1. Provide new content: Sell or license new, richer, or more-targeted data.
A personalized diet: A meal-by-meal program that would tailor menus to each customer’s sex, age, health status, exercise routine, travel schedule, and wellness goals
2. Repackage: Filter, synthesize, and reformat data created by others.
Online custom reports: Customized, just-in-time data distilled from multiple sources and sent directly to a customer’s PDA
3. Informationalize: Outfit existing offerings to enable them to create and deliver useful data.
An instrument-equipped hospital gown: Heart-rate and other monitoring devices integrated into a gown that could transmit real-time patient data to hospital staff
4. Unbundle: Extract data from existing products and sell those data separately.
Unbundled equity trading: Separating investment advice from trade execution in order to allow advisers to focus on and charge separately for the advice
5. Exploit asymmetries: Use superior access to or understanding of data to leverage perceived differences in the value of products or services.
Hedge fund management: The use of data-derived insights by hedge fund managers to create opportunities for arbitrage
6. Rectify asymmetries: Provide data to the less-informed party in a transaction in order to level the playing field.
Consumer education: Unbiased product performance, quality, and price comparisons, like those Consumer Reports offers, to enable consumers to make better-informed buying decisions
7. Provide identifiers: Create unique labels for households, retail outlets, and products to help businesses find what and whom they are looking for.
An expanded securities-numbering system: An international system, modeled after Standard & Poor’s CUSIP system for U.S. securities, to make all securities worldwide easily distinguishable
8. Infomediate: Make it easier for consumers to find the data they need.
Webpage ranking: A proprietary ranking method, like that used by Google, that delivers highly relevant search results
9. Mine data and conduct analytics: Sift data to gain an understanding of customer behavior, spot product trends, and more.
Movie rental behavior: Recommending films to customers based on their and others’ previous rental choices, as Netflix does
So here in Incisive Legal we have many rich sources of content that live in silos. Some are print products, some customized databases, some are derivatives of products that are already been created. Yet I fail to see us leveraging all of these assets to create new revenue streams. We have seen that our content is worth something as our licensing revenues are very strong yet, why are we not exploiting these assets more for ourselves, instead selling them off to our licensees for them to reap the benefit. I do believe that the value and effort in which our products are generated can provide equal if not paramount value, if we invest in our own infrastructure. We may fail because these projects don't often result in a short term payoff and soon after dwindle away under the "failed project" status.
At Mcgraw Hill they have mandated that all products be digital in the future and have invested in the infrastructure and platforms necessary to achieve their goals. This strategy is allowing them to "repurpose" and "reuse" their assets and generate new products. This is no easy feat and does not happen over night, but with a long term vision to invest in a "digital" strategy we can reap future benefits.
It concerns me that we have very short term goals in our IT Projects and yet we yearn for long term payoff. As a developer on the Xml Content Repository and seeing the long term goals of many business units, I wonder why projects that could provide the infrastructure for new products go by the wayside. Projects around Content Enrichment, Backend CMS, Search and our Xml Digital Asset Strategies lack alignment with business units and funding necessary to move the agenda forward. Often their is no immediate payoff, but without a proper investment, we can never deliver.
We need to invest in our digital strategy long beyond the 6 to 9 month lifecycle for an individual project and look at the dependencies of how one project can map into a larger "digital" strategy.
Gary