Many organizations fail to make good decisions about their data monetization strategies because their leaders lack a shared understanding of how to discuss them. This confusion can impede efforts to derive more value from the company's data assets through improvements or innovation. This article shares a simple, practical matrix approach that can help remove friction from discussions about monetizing data and identify areas of business opportunity, now and in the future.

Every organization can-and should-generate more revenue from its data than it invests in producing and managing it. Yet the idea of turning data into money is often associated with sneaky tactics or 'going too far' with unacceptable privacy violations. As a result, some organizations, especially non-commercial ones, have very little appetite for the term 'data monetization.' The authors say it's time to embrace the concept. They present three approaches to monetizing data: Selling, which entails the exchange of data for money; Improving, which uses data to create efficiencies for cheaper or faster operations; and Wrapping, which uses data to enhance products such that customers want to buy more. In the end they show that, if you will limit what you view as data monetization opportunities, you leave money on the table. Often, a lot of money.

This is an MIT Sloan Management Review Article. As companies recognize how important a digital strategy has become, they find themselves torn between different strategic options. The first decision is to choose between a customer engagement or a digital solutions strategy. Which to pursue depends on existing capabilities and competitive direction - but companies should avoid trying to do both.

Why do companies have so little to show for their investments in big data? The biggest reason is that they aren't doing a good job using the data they already have. They don't know how to manage the information embedded in their operating systems, analyze it in ways that enhance their understanding, and then make changes in response to new evidence and insights. The few companies that have adopted evidence-based decision making ensure that all decision makers have performance data at their fingertips every day. They also follow four practices: (1) Agree on a single source of truth. Using performance data from just one source yields a more accurate view of costs and profitability. (2) Use scorecards. Perhaps the best way to teach people how to use data to create business benefits is to provide them with data about their own performance. (3) Explicitly manage business rules. Little data can have a big effect on performance when managers use the data to assess and improve the business rules that govern their operations. (4) Use coaching to improve performance. Adopting evidence-based decision making is a big cultural shift. Employees need help learning how to base their decisions on data instead of on instinct. Fortunately, companies that make the shift don't usually go back, and they improve their operations in ways that rivals can't easily replicate.

New research from MIT's Center for Information Systems Research and others reveals that successful companies are revolutionizing the way IT investments get decided. Investments are no longer justified merely on the basis of making a functional silo more profitable. Today, the strategic needs of the whole company come first. In the last 15 years, write professors Jeanne Ross of MIT's Sloan School of Management and Cynthia Beath of the University of Texas, a tidal wave of IT-enabled initiatives has elevated the importance of investing strategically. The Internet alone has created numerous opportunities: to reengineer processes, introduce online products and services, approach new customer segments, and redo business models. The opportunities seem limitless, but the resources required--capital, IT expertise, management focus, and capacity for change--are not. How to choose? Traditionally, companies justified a given project by presenting a strong business case. But with IT's growing strategic importance, companies must now weigh individual ROIs against demands for organizationwide capabilities--and must assess opportunities to leverage and improve existing systems and infrastructures, create new capabilities, and test new business models. The authors recommend a new investment approach based on a framework they developed after studying the e-business initiatives and supporting IT investments of 30 enterprises. The framework encourages simultaneous investment in four kinds of IT initiative. Transformation investments are necessary if a company's core infrastructure limits its ability to develop applications critical to long-term success. Renewal investments maintain the infrastructure's functionality and cost effectiveness. Process improvements allow business applications to leverage infrastructure by delivering short-term profitability. Experiments enable learning about opportunities and testing the capabilities of new technologies.