The concept that data is critical to an organization's growth is nothing new. As digital transformation takes every industry by storm, however, the types and sources of data have rapidly evolved.
Relying simply on proprietary data is blinding at best. Over the last few years, innovative companies have raced to tap into new sources — often those they don’t own. External data like weather, jobs reports, and social media are already being leveraged to better understand customer behavior and optimize supply chains.
And yet, companies are usually leveraging this data inefficiently. Multiple departments and lines of business procured external data sets, wasting millions of dollars in repeat purchases. Many companies brought on Chief Data Officers, and yet rarely did these professionals have insight into all the external data purchased by each functional area. It wasn’t just the procurement of this data that introduced issues. Ingesting, preparing, and analyzing external data was often a laborious, manual process, made even more so because it was siloed and replicated throughout an organization.
The cloud rewrites the rules
The cloud upended this process entirely. Data sharing no longer required data movement, providing greater visibility and scale for both digital natives, growth companies, and established brands alike.
This is already happening in full swing across the industry. For example, Hulu shares data with media partners to improve personalization, while maintaining privacy of their users. Jeff Nemecek, Director of Architecture and Quality at Hulu, describes this as “the end of ftp as we know it.” CPG company Kraft-Heinz, meanwhile, uses external data to innovate products and better serve their customers by getting a holistic look at their buying patterns. In a world where third party cookies and cross app tracking are eliminated, CPG and retail brands in particular are hungrier than ever for third party data to understand customer behavior and optimize supply chains. Increasingly, though this will extend to businesses regardless of their sector.
“Data is going from being something that’s guarded in a company to being a robust platform to being a service. Having information is powerful, for sure, but sharing information can be even more powerful.” Mani Gopalakrishnan, vice president of digital transformation at Kraft Heinz
The cloud changes the game in more ways than one. It increases the type and volume of data that’s available, but equally as important, it enables new ways for how that data can be shared. And as the world digitizes in more and more ways, newer data sources like human mobility, credit card transactions, hiring trends, and air quality allow for far greater near-term analysis, or what we call nowcasting.
Imagination, creativity, and the art of the possible
Purchasing external data is one way to get started, but that’s only the beginning. Now is the time to reimagine what could be possible across the full value chain when it comes to data sharing, whether that means leveraging blockchain technologies, setting up data sharing ecosystems, or something else entirely. These leaders need to think about the data touch points, who captures it, and how it can be connected to create a value-added digital ecosystem across the entire customer lifecycle.
Again, some of the most innovative brands in the world are already experimenting here. For example, Royal Philips has created Healthsuite, a platform that allows providers at different points of patient care to securely share data to help improve care and outcomes. Daimler, on the other hand, is testing analytics on shared data with suppliers. They’re using Ocean Protocol’s data exchange platform to do so without ever having to transfer that data or reveal details. Clear Box Retail provides both inventory and point of sale data for consumer brands.
In the UK, Pets at Home has created a unique ecosystem by sharing retail, vet, and loyalty data that puts the pet at the center. And it’s paying off. Their revenues are up 18% in 2021, in contrast to other pet chains that saw only modest growth, like PetSmart, who saw 9% in the same period.
Regardless of the industry, this trend is also accelerating as companies tapping into this paradigm outperform their peers. That value is not just revenue for an organization. In automotive, for example, car manufacturers like Ford are improving driver safety by sharing data gathered from car sensors to warn about road hazards with other car manufacturers. Just imagine it: you are driving a Ford and the anti-braking system kicks in because a tree blocked the road. A driver of the BMW a few miles behind you can be warned. Or, as General Motors discussed in The Data Chief podcast, an Amber Alert that warns of a child abduction could be shared with other drivers in close proximity.
When data is shared, everyone stands to win. To start capitalizing on data sharing and other critical data trends, check out our guide here.
