If you are still wondering whether collecting and analysing data is really essential and beneficial for your business, well, you are at least 10 years too late!
Data has become a fundamental and indispensable resource for every department, from human resources to marketing to production.
Why should we think of data as a commodity?
Data has taken on a prominent role in the strategic and operational decisions of every business sector for a number of reasons:
In the digital age, data is being created at an unprecedented rate: the latest estimate is that 328.77 million terabytes of data are created every day ("created" includes data that is newly generated, captured, copied, or consumed). In zettabytes, this equates to 120 zettabytes per year (source: Statista). This abundance makes it akin to a commodity, as it can be collected, processed, and traded like traditional resources such as oil or grain.
- Economic value:
Data has significant economic value. Businesses use data to gain insights that enable them to make informed decisions, optimize operations, and develop products or services. It can lead to cost savings, increased revenue, and competitive advantage.
- Market demand:
The demand for data and insight is growing across all sectors. Businesses, governments and organisations are seeking data to gain competitive advantage, improve efficiency and sharpen decision-making processes.
Many organisations monetise their data by selling it to other companies or using it to create targeted advertising, products, services and strategies. This aspect of monetisation is reminiscent of the way goods are bought, sold and traded for profit.
As with traditional commodities, data is often interchangeable. For example, a dataset on customer behaviour from one source may be of similar value to a similar dataset from another source, making them interchangeable to some extent. Investment: Investors and venture capitalists are increasingly interested in start-ups and data-centric technologies, further emphasising the commodity role of data. Regulation: Governments and regulators are beginning to treat data as a commodity, creating regulations and laws that govern its collection, use and transfer, just like physical goods.
Investors and venture capitalists are increasingly interested in start-ups and data-centric technologies, further emphasising the commodity role of data.
Governments and regulators are beginning to treat data as a commodity, creating regulations and laws that govern its collection, use and transfer, just like physical goods.
If data is a commodity, how is it useful for businesses?
If you don't sell it, data itself is not useful and doesn't generate revenue. But when you turn data into information, you gain insights that can be very useful to your business.
If you want to gain an in-depth understanding of your consumers or e-commerce customers, you can turn the data you have into meaningful information. However, if you want a broader and more detailed view of your market (and not just those who are already your customers), you should consider gaining insights rather than just data.
It is the same logic as when you go to the supermarket: you usually buy bread, not wheat to be ground into powder and then made into bread. Similarly, instead of buying data, you can buy insight, which is ready-made information.
Start using statistics, insights and infographics now to make the best strategic and operational decisions.
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