Today’s world is increasingly data-driven, and companies are amassing unique data assets that have numerous and valuable implications for analytics, modeling, insights, personalization and targeting purposes. Most companies don’t know how to turn their mountains of data into real value for their business or their customers. But the companies that do are rewarded with market valuations that far exceed their peers. Amazon, Nike, Progressive, Hitachi, and others recognize that winning in a digitally driven world is about using data as currency, and the CIO and CTO are key to making that happen.

But what does “data as currency” mean?

For a while now, we have heard a number leaders claim, “data is the new oil”. However, there are some distinct differences in the claims, including how it’s generated, re-usability, optionality, usage rights, and market access. Unlike oil, data is an infinite resource that can potentially be created by any company or individual and be repurposed multiple times across multiple functions. Data’s flexibility arguably gives data even more value than oil and other currencies, assuming companies can leverage it properly. For instance, many product companies sit on customer interaction data that could better predict demand to optimize their manufacturing output and supply chains. Internal data on employee job assignments, self-driven trainings, and micro-experiences could optimize talent versus upcoming opportunities.

For companies to use data as currency, CIOs and CTOs need to initiate a complete shift in mindset within their executive leadership. The most successful innovators who have unlocked the value of their data have done the following:

1. Establish data literacy as a mindset

CIOs and CTOs can help their fellow leaders and employees across the organization recognize the value of data as a key asset or “currency” of the company and understand the potential to create new value through responsible innovation.  This means creating new data-driven solutions while maintaining protection, transparency, and trust with end-users with respect to how their data is used, both inside and outside of the company.

2. Understand the data balance sheet and flywheel

CIOs and CTOs can help leaders across the organization utilize dashboards to monitor what percentage of their data assets are accessible versus what isn’t accessible, and how the potential value of those unused assets can create needed pressure for change. Technology leaders can also help their organizations understand how better digital experiences and digitized products, such as IoT, can earn the right to collect more data and add to an organization’s data advantage.

3. Value data assets across the value chain

Technology leaders can work with finance and other business leaders to align on the tools for valuing data assets such as income, market, and cost-based approaches, along with examples for each.

4. Create data optionality

For many organizations, unlocking their data assets’ value means sharing data and collaborating with a larger ecosystem of partners to gain critical mass for new problem sets and allowing other innovators to apply their data to new use cases. CIOs and CTOs are key to communicating the importance of collaboration and optionality and championing the right data-sharing partners for their organizations to work with.

5. Master machine learning to build algorithmic advantages

Organizations need to have some critical mass of data science skills in order to unlock the value of data, and CIOs will be responsible for acquiring and nurturing those skills and getting investment buy-in from other leadership members. However, the advent of low and no-code machine learning (ML) solutions like AutoML and C3.ai offers an opportunity to have more members of the workforce engage in developing ML models to solve use cases across the enterprise, regardless of experience.

6. Avoid some of the major flaws in AI models today

CIOs and CTOs will need to assess the real value of data sets for algorithms, and whether they are causing harm to the organization and its stakeholders. Transparency and ethics are becoming a key driver in responsible data innovation. New regulations are looming, such as the Algorithmic Accountability Act currently working through Congress in the United States, if the industry cannot solve the problems on their own. There are now several frameworks in place for ethical data use that technology leaders could model their own protocols on, such as from the Ethical AI Consortium (EAIC).

Underlying these key strategic activities is the need to provide reliable, frictionless, secure, and cross-enterprise access to key data assets. Access must be FAIR (findable, accessible, interoperable, and reusable) for innovators inside and outside the company. This means establishing clear data governance (including data asset owners and rights management), deploying and evolving capabilities like cloud-based data warehouse and management tools, data ingestion capabilities, building a workbench of data analytics and AI tools and services, and leveraging APIs to make it easy to build new applications that consume and add to data assets.

CIOs and CTOs have a critical role to play in driving a sustainable data advantage for their organizations. Their positions are multi-functional by nature, which gives them a uniquely valuable role in bringing the “data as currency” mindset to life. They can lead on enabling the technology, tools, and capabilities to unlock and derive value from scores of unused, wasted data. Just as important, CIOs and CTOs can serve as ambassadors, helping executives and their board of directors understand how to unlock the value of their data across the enterprise, and build the necessary data science skills in their respective teams.  This also includes setting the pace by upgrading their own teams to include a critical mass of data/AI skills and mindset.  In doing so, they will demonstrate not only their importance to the entire organization, but the rapidly growing importance of technology in the future of business operations.

Scott A. Snyder has more than 30 years of experience in emerging technologies, business strategy and innovation, and digital transformation for Global 1000 companies and startup ventures.  He is the co-author of Goliath’s Revenge: How Established Companies Turn the Tables on Digital Disruptors and the author of The New World of Wireless: How to Compete in the 4G Revolution. Dr. Snyder is a Senior Advisor at Heidrick & Struggles focused on Digital and Innovation.  He is also a Senior Fellow in the Management Department at the Wharton School, an Adjunct Faculty Member at Penn Engineering, and a Digital Economy Project Fellow for the World Economic Forum.