Those of you responsible for customer master data management will be well aware that there is a data revolution underway in business. This revolution is being fueled by a number of factors.
Data Privacy seemed to be “the thing” that would upend carefully curated rich customer master data repositories in favour of the bare minimum of data. The global COVID-19 pandemic added another twist as we witnessed the explosion of home delivery and online shopping activity as consumers trapped at home, resorted to eCommerce sites, virtual grocery carts and fast food portals to get their nutritional and retail fixes.
What was likely not anticipated, was that we would see quite the volume of new activity that would grow our master data repositories. All that data has some value, but we know that not all the data has the same value.
The data explosion brings with it, headaches of compliance and minimizing the risk associated with data. Data managers are being asked to critically assess the value of the data they have. How exactly do you do that though?
One school of thought is that you need to look at who uses which data.
Understanding where data is used and who uses it and what they use it for is no mean feat. New technologies like data virtualization technologies, cloud storage systems and SaaS have done a pretty good job of democratizing access to data but have they made it more trustworthy, current and relevant? There are still an awful lot of spreadsheets out there. you’ll want to reign in the use of spreadsheets for maintaining customer data for a host of reasons not least of them being compliance.
Is data really valuable?
It has been said that “Data is the new oil” a deceptively simple mantra for our modern world. “Whether in The New York Times, The Economist, or WIRED, the wildcatting nature of oil exploration, plus the extractive exploitation of a trapped asset, seems like an apt metaphor for the boom in monetized data.” per Antonio Garcia Martinez.
Jeroen van Zeeland says the “analogy turned meme turned dogma is persistent and flawed“, whichever it is,k oil or water, the reality is that untapped it may have no value; tapped it may be a form of lifeblood for any number of business initiatives or ventures.
One thing that we can be sure of, is that there needs to be a methodical assessment of the data that a business has at hand and the value that might be ascribed in terms of actual and potential yield.
Working out the value
Four pillars of activity need to be undertaken within the business and among data managers, in particular, to get the data the kind of profile that will have it accorded some appropriate value. The first of these is around the classic accounting approach to defining assets and liabilities.
Some would argue for data being considered a liability but let’s put that aside for one moment and consider how you might appoint your data as an asset.
An asset is defined as something owned or controlled, with an intrinsic monetary value that can be sold or exchanged for cash. Consider a Facebook, a Google or a Microsoft. Whatever data they have about consumers or persons of interest that they can monetize through trade, is effectively an asset for them. Strictly speaking then, data, and particularly customer or consumer data, aligns with the definition of an asset. If you don’t sell it or don’t use it, does it still intrinsically hold any value?
Unlike traditional assets, like gold, land or buildings, customer data, if simply left to lie, will deteriorate over time and eventually will be arguably worthless unlike undiscovered diamonds and minerals in the ground – in fact, the storage and maintenance of it may even be deemed a cost. So the important thing is to know what data you have and to leverage it.
Even gold, land and buildings, as assets need some degree of maintenance. Gold needs to be stored and inventoried, and probably inspected on occasion to make sure that sticky fingers don’t walk off with any of it. Land needs to have the taxes paid and needs to be kept in accordance with local laws, which may mean it needs to be fenced or the grass cut and of course, buildings need almost continuous maintenance work to avoid them falling into disrepair. These assets are managed with policy, standards, processes and procedures. You need to do exactly the same with the data, especially the customer data.
If the business’ attitude to the data is that it is just a headache and holding onto it is a risk because it might get leaked or inadvertently fall into the hands of bad players then you’re quite possibly not considering how you might use that data. If you choose not to store a regular customer’s details then you don’t provide your marketing and sales teams with the ability to reach out to the customer with details of the latest offering your business has. This in turn diminishes the potential for customer loyalty and augmented customer lifetime value.
Within the Pretectum CMDM we hope to make it easier for any business to securely and appropriately manage the authoritative customer master data records in a straightforward and comprehensive way. We do believe that the customer master in particular can be one of your most valuable assets. Contact us to find out how.