In 2021, the International Data Corporation (IDC) predicted that 2022 would see the world produce 94 zettabytes of data, which would cost around $3 trillion to store. But data monetisation was estimated to be worth $2.9 billion dollars in 2022. While nearly 3 billion dollars may sound large, looking at it in relative terms it is less impressive — on average, less than 0.1% of the data had been successfully monetised!
Organisations are really good at spending money to collect and store data, but considerably less successful at extracting value and getting enduring business impact from it. For the Tolkien fans amongst us, we look a lot like Smaug, sitting on a massive pile of gold. Unlike the dragon, however, we have to do something with our hoard to make it valuable.
Common wisdom is to gather all the data available and build ever more sophisticated abodes (marts, cubes, warehouses, lakes, etc… ) to store it. The intent is that data scientists then convert it into algorithms, or data products, that can be monetised.
That’s the theory. The reality is a bit different, as the following anecdote highlights.
Enter the CIO of a 100-year-old German upstream energy services supplier. Eager to bring together diverse datasets and unlock the value trapped within, the CIO embarked on a transformation project to create a state-of-the-art data warehouse. Two years passed, the data warehouse went live and opened for business. Following the launch, the CIO reviewed the usage metrics to find that 5% of the warehouse was being used, with a peak usage only ever hitting 15%. More than 85% of the effort did not produce any returns; in other words, it was wasted.
Investing in data systems is not enough in itself enough to guarantee a return.