Your customers are leaving money on the table. You may be, too. All because they (and you?) don’t know how to treat information as an economically valuable asset.
So says Douglas Laney, a Gartner VP and author of a new book, Infonomics: How to Monetize, Manage and Measure Information as an Asset for Competitive Advantage.
Laney says that just as there is a supply chain of physical goods, so is there one for information. And just like a physical supply chain, the information supply chain can deliver a slew of business benefits, including more efficient operations, better product quality and higher sales.
To help your business and IT customers monetize, manage and measure this information, Laney has come up with the concept of infonomics. He describes it as “the theory, study and discipline of asserting economic significance to information.”
Infonomics is not just about selling data. Value can come from many other data-driven activities, Laney says, even ones that involve the information of other organizations.
3 M’s of infonomics
So far, so good. But what does it actually mean to monetize, manage and measure information? And how can your clients start doing it?
That’s what Laney’s book spends most of its 344 pages explaining. But here’s the quick version:
> Monetize: Information has both direct and indirect value. Determining that requires 3 tasks: justification, inspiration and execution. Because few organizations do this well, it’s a capability that can quickly become a competitive advantage.
> Manage: Once you’ve determined the value of your information, you have to manage it. That includes building what Laney calls an “info-savvy” organization. This involves identifying, then crossing, barriers; developing frameworks; and setting organizational roles.
> Measure: Information has value, but exactly how much? That’s what this task aims to find out. “You are indirectly monetizing information only if you are measuring its economic benefit,” Laney writes. Valuation models can help. So can key economic principles. The larger goal: spur data-driven innovation, justify IT-related investments, and foster an “information-driven culture.”
Sound abstract? Then consider a real-world example: Belk Inc., a Charlotte, N.C.-based company that operates nearly 300 department stores in 16 U.S. states.
As Laney explains, Belk monetized its information by blending and analyzing data from millions of customers across 13 databases. Its larger goal: identify the highest-value, multichannel customers.
The results have been impressive. Among them: Belk has nearly doubled the number of both online and in-store customers.
That’s the value of data. Are your customers getting the most from it?