How valuable is data for companies?
What is the innovation potential of data? What opportunities and fields of activity does it open up to companies? The new EOS data strategy is designed to provide the answers. A sophisticated process determines the value of each data set and this information is then revealed to all employees.
- EOS would like to assign a monetary value to information using a new management system.
- The strategy is aimed at the efficient and legally compliant use of data.
- A Data Dictionary is intended to make EOS business operations more scalable and ensure that the company’s data streams are more transparent.
Data is the new oil. It’s a mantra that has become a platitude meanwhile. Another hackneyed phrase is the claim to be a “data-driven” company. It’s easy enough to say but hard to define and substantiate. With this in mind the Otto Group, to which EOS belongs, has established its own Business Intelligence Unit. However, every company needs to decide for itself what exactly constitutes the value of its data.
“Data is the most important thing we have and we use it every day,” says Sebastian Klauke, who is responsible for e-commerce, technology, business intelligence and corporate ventures within the Otto Board. “For an e-commerce company like the Otto Group, data really is like fuel.”
And that’s not just a metaphor: The Otto Group needs this fuel to survive in the new multi-channel retail environment. “The customer wants an extensive range of products as well as fast and reliable delivery times,” says Klauke. “The only way we can do this is with data.”
For an e-commerce company data really is like fuel. Sebastian Klauke, CDO of Otto Group
What is the value of a mobile phone number?
At EOS the fuel analogy is being taken a step further and developed into a new data strategy. The basic idea: “If data, like oil, is worth something, then you ought to be able to attribute a value in euros to it, just like oil,” says Henning Stolze from the Data Governance Office at EOS Deutscher Inkasso-Dienst in Germany. “Based on this concept, EOS has started to analyze the value in euros of its most important data and is constructing a new management system based on these specific figures.”
The idea came up in a series of management workshops on the handling of data at EOS. “We wanted to do more than just affirm that we are a ‘data-driven company’,” says Stolze. “We wanted to develop specific measures.” Measures that give employees a deeper understanding of the importance of the data they are working with.
However, it emerged that it is easier to determine the worth of oil than to put a price on the data held by a debt collection company. “Take the cell phone number of a defaulting payer,” says Stolze. “Even with a simple data point like this there are three perspectives: We paid an investigation service for this number. We have ongoing costs for data maintenance. And inherent in this phone number is the value of a claim.”
More scalability, less “knowledge as power.”
For Stolze, it is essential to bring these perspectives together, because this shows employees that what they might consider a rather unimportant piece of data can be valuable to other departments. “This is the cornerstone of our strategy: If I know that something has a value then I will handle it more carefully and protect it better. This attitude to data will change the corporate culture.” The data strategy is designed not just to make clear to employees at all levels and in all areas what their data is worth, but also how they can handle it efficiently and in compliance with the relevant legislation. Because items of great value also need to be well protected from attacks. “Alongside process thinking we always have to concentrate on the data element as well,” says Stolze’s colleague Jens Koch-Bodes. With the help of the new strategy, EOS can scale up its business without the silos, stand-alone solutions, historical baggage or knowledge-as-power attitudes that slowing down processes.
A long-term strategy.
The key tool in this context is the Data Dictionary, a company-wide directory that shows clearly for every type of information the value of this data point and the departments responsible for it. All data streams are intended to be traceable throughout the entire company, says Stolze: “You will see at a glance how data from the operational system are being used in call center management and ultimately summarized with other data to produce a key indicator in the standard reporting.” But the Data Governance Office is taking this idea a step further. Perhaps in three years, employees will see continuously displayed values in the debt collection software for the data they are currently working with. Or as well as somewhat short-term revenue data, companies will also obtain KPIs for the long-term trend in the overall value of all data. “This allows business management based on a new, much longer-term perspective,” says Stolze.
And this fits in with the approach of the Otto Group. Neither the parent company nor EOS is fundamentally concerned with short-term profit maximization,” says Klauke: “We want sustainable success without having to abandon our value framework.”
Photo credits: SolStock/Getty Images, Hero Images/Getty Images, Otto-Pressebild