As a CIO, you know data is the lifeblood of your organization. But did you ever think of packaging up that data in a different way and creating a whole new product or service?
Savvy CIOs in different industries are doing just that, as discussed by panelists at the 12th annual MIT Sloan CIO Symposium. Moderated by MIT Sloan School IT researcher Barbara Haley Wixom, four panelists talked about the challenges and financial rewards of making data pay.
Blending core products and services with data to generate additional revenue for the organization drives strategic value, said Wixom. As such, this activity requires external focus.
"This is fundamentally different from the way we have been doing data management," she said. Leveraging data to drive money to the bottom line focuses on external customer needs, as opposed to traditional data management, which tended to cater to the needs of internal users only.
Creating data-based services
Panelist Jessica Donahue, chief innovation officer for State Street Global Exchange, talked about her role in creating insights and analytics services for its institutional investor clients. This an entirely new product line beyond its traditional custody and accounting services, she said.
Donahue cited one of her top challenges: Securing the necessary rights to commercialize customer data (with identifying and sensitive details stripped out). "It took over a year to get commercialization rights to our private-equity cash-flow data," she said.
Data governance and security are two more major considerations when creating data-based offerings, added Donahue.
Data in a real-time world
Another panelist, Steve Emmerich, chief architect, ACI Worldwide, talked about creating analytics services on top of ACI's transactional payment system business. "The speed at which our clients need analytics results are accelerating every day," said Emmerich. "The volumes of data are growing. It's a real-time world."
ACI is going a step further -- creating data exchanges and online consortia upon which its clients can interact with each other. "This increases our value," said Emmerich.
Colin Mahony, senior vice president for big data, Hewlett-Packard, talked about the difficulty of leveraging legacy systems to deliver data-driven products, which often rely on large data sets and require analytical processing.
"Analytics have to run immediately. It's hard to just repurpose existing systems for this," said Mahony.
Data insights equal business agility
The final panelist, Don Stoller, came from Owens & Minor, a large medical distribution company. He said he quickly discovered that his customers generated reams of supply chain data that was going unused. So, he and his colleagues spun off a separate company called Healthcare IQ, which focuses solely on tapping that data for customer insights.
"This was additional value for customers, the hospitals," said Stoller.
Summing up the panel discussion, Wixom said that data-based products give customers insights that can allow them to act more quickly. "This is about how fast we all need to be. You have to be fast and innovative," she said. As for the CIOs that are mining their data to serve this need, they are helping their companies change and adapt to new business realities while adding to the bottom line, a feat of alchemy indeed.