The CIO has a real ability to achieve a competitive advantage for its business through data. This is the underlying purpose of the digital transformation exercises that have been so significant to IT in recent years. For the CIO to be successful with this, there needs to be a comprehensive strategy that extends far beyond simply deploying new technologies. Many CIOs are now working with an IT environment that can deliver a modern data strategy but are struggling to unlock the full potential.
The first step for CIOs is to break down internal barriers and address the problems caused by data siloed in legacy environments. As we saw in the previous article (How The CIO Can Become The CMO’s Best Ally In The Use Of Data), this ultimately comes down to the CIO’s ability to achieve stakeholder alignment across the executive team.
As Warren Jenson, LiveRamp President, said, failing to do this first can be counter-intuitive to the company’s data goals. “Alignment between the company’s mission and goals to each area of data collection, monetization, and collaboration creates a clear road map for interlocking data and business strategies, eliminating the possibility of missing new revenue-generating opportunities.”
The four steps to data advantage
A recent report from LiveRamp outlines the four steps that can bring a company to data maturity.
1) Match the tech strategy to the business strategy. “Disorganized data and disjointed digital tools often cause decision fatigue that can further disconnect business goals from tech and data strategies,” Jenson said. Organisations that can properly align their data environments stand to gain a significant competitive advantage.
Stephan Zimmerman, a Senior Partner at McKinsey & Company, confirms this sentiment in the LiveRamp report. “Companies should have a consistent data blueprint linking use cases to create business value and identify early wins to help build momentum for the organisation.” This is important, since the executive buy-in the CIO has earned needs to deliver quickly in order to encourage further investment for even higher value, but longer-term, projects.
2) Invest in an identity solution. Identity enables enterprises to unify and consolidate their customer view, which is an ongoing challenge for most businesses today. “Identity awards your consumers with more personalisation, better experiences across channels, and helps prevent an unhelpful or repetitive ad experience,” Jenson said. “For internal stakeholders, identity strengthens customer intelligence, improves ROI and generates new revenue streams across sales, marketing, IT and other departments, among many other benefits.”
In short, an identity solution is critical to being able to properly analyse and leverage customer data. Here, LiveRamp uses the retail vertical as a use case: “E-commerce often exists entirely separate from data generated by in-store operations. Imagine what insights merchandisers could glean if they were able to analyse transactions and other pertinent data across the full customer journey?”
An identity solution that is defined as “people-based” enables intracompany and intercompany data collaboration while allowing the CIO to maintain tight control over these assets.
3) Collaborate with partners. With the proper controls in place, the CIO can start to bring their organisation’s data together with second- and third-party data to generate far deeper and more powerful insights. A good example of this is media companies, which have deep analytics into their audiences and can segment according to the needs of their partners. In collaboration with the CMO, the CIO can bring their company’s own data in connection to a media partner for better targeting and measurement.
“Publishing and the TV industries have rich and valuable data sets. Thanks to the rise in granular privacy controls that mitigate risk of unauthorized data access or use, both are growing areas where meaningful data partnerships are finally possible,” Jenson noted.
4) Use data to build new revenue streams. By step four the CIO is delivering meaningful new revenue streams to their business, which can then be reinvested into other initiatives. The retail industry is a prime example. By leveraging its wealth of first-party data assets to set up a retail media network, Amazon was able to generate $31.1 billion in ads, and Walmart $2.1 billion for its own.
The LiveRamp report also shares the experience of Boots, which went from 7 percent of media being booked using first-party data, to over 40 percent using data collaboration to unlock customer insights. “The opportunity has to be that you are there in that moment of customer need. Having that passion for the customer, backed with the data that says, if we know our customers better and we understand their lives and the role we play in them, and we are looking out for those key moments and using the best technology, then that’s how we’re going to win.”
Data is undoubtedly a major point of investment for organisations. A recent McKinsey report noted that in a company that has $5 billion in operating costs, third-party data sourcing, architecture, governance and consumption will cost $250 million – 2 percent of the cost in itself. When managed well, and supported by the right tools, this becomes a competitive advantage and investment into further growth for the business.
For more information about getting started with your data collaboration strategy, click here.