Data Capital: Separating the Winners and Losers of Tomorrow

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It’s undeniable; digital transformation is reshaping the world around us. Analyst firm IDC predicts that by 2021, at least 50 percent of global GDP will be digitized, with growth in every industry being driven by digitally enhanced offerings, operations, and relationships.1 Less obvious, however, is the fact that data is driving this change. In fact, the ability to put data to use is what will separate the winners and losers of tomorrow.

wall of tvs displaying blue images

Data is rapidly becoming any organizations’ most valuable asset and will be a strong indicator of future success. IDC also predicts that by 2020 investors will use platform, data value, and customer engagement metrics as valuation factors for all enterprises.1

Dell EMC discovered examples of valuations heavily influenced by data during a recent data valuation project with Dr. Jim Short of the San Diego Supercomputer Center.  Notable examples include:

  • The most valuable asset in Caesar’s Palace bankruptcy filing is their Total Rewards Customer Loyalty database, valued at one billion dollars.
  • Ninety percent of the value from LinkedIn’s $1.5B acquisition of Lynda.com was attributed to their data.
  • Tesco internally valued their Dunnhumby data asset, which contained the shopping habits of some 770 million shoppers, at over a billion dollars.

View the entire report – MIT’s Sloan Management Review

It’s time to change the way you look at your data

The data platform shouldn’t be an afterthought or ancillary decision that you cede to a technology provider; it must be a centerpiece in your decision making to achieve success.

Your focus must be on maximizing your Data Capital.

We define Data Capital as:

Wealth in the form of value derived from organizational data. Used to power digital experiences and/or unlock business insights. A source of competitive differentiation across all industries.

As we’ve seen, this can be the difference between success and failure in this digital age.

However, making use of data isn’t easy

Organizations that were not born in this new digital world have to augment or adapt existing business processes and technologies to leverage their data. They must also account for the massive amounts of unstructured data new digital experiences will create and consume. It is estimated that Unstructured Data will account for 80 percent of all data.

When looking at how to unlock your Data Capital, there are three challenges to overcome:

  1. Data often goes unused. Analysts estimate only .5 percent of data is ever put to use. Data is often siloed and strewn across an organization’s footprint, limiting its usefulness. Without data consolidation, gathering and exposing it to the right users and applications requires substantial effort.
  2. Keeping up with data growth can stifle innovation. As data grows, management overhead, infrastructure costs, and the inability to rapidly add capacity can be problematic. It is vital to optimize infrastructure and processes so you can continue innovating while keeping costs in check.
  3. Properly aligning data with organizational goals. As my colleague Bill Schmarzo is fond of saying, “You don’t need a big data strategy, you need a business strategy that utilizes big data.” While it’s not always apparent, it is critical to ask the right questions and be thoughtful about the role data will play in your success.

Crossing the Data Divide

No matter the industry, we will see data increasingly important to differentiating among competitors. Ultimately, successful organizations will need to overcome these hurdles to put their data capital to use. However, those who do not take the necessary steps to integrate their data will find it difficult to succeed in this digital world.

In the coming weeks, we will discuss ways in which you can set your strategy to maximize your data capital, and provide real-world examples of companies that have already begun this journey.


1IDC FutureScape: Worldwide IT Industry 2018 Predictions Oct 2017 – – Doc # US43171317

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