30. November 2020

Making the right strategic investment decisions with the most valuable data

Digitalizing the manufacturing process – 69% of German machine and engineering companies have set themselves this goal. Many digitalization projects already fail in the pilot phase. They often fail due to a missing return on investment (ROI) (61%) and a missing long-term goal or strategy (59%). Only 30% of the companies have successfully implemented their pilot projects in the whole company.

A company-wide assessment of use cases is the key to digitalization success

The core of every digitalization project is data, which can be both input and output. As the degree of digitalization increases, data is no longer just the result of processes, but rather creates the prerequisites for processes, acts as a product initiator and is traded as a product. For these reasons and the following three, it is crucial to systematically assess the monetary value of this data:

  • Value-added data: The analysis of operational activities shows which data is most frequently used in the company and which is most important for profitable processes. Digital skills and technologies should be aligned with this data in order to achieve high-quality and rapid digitalization success.
  • Drivers of growth: A holistic view of use cases and for their implementation required data shows which departments, processes or customers are facing the same challenges. Once collected and processed data can be quickly transferred to similar use cases. This overview helps to invest in the right projects for data acquisition and processing.
  • Value-enhancing synergies: Looking at digital use cases in a strategic and company-wide context allows a distinction between use cases that represent an isolated solution or, if successfully implemented, enable further digitalization projects. The interdependence of some digitalization projects not only determines the strategic implementation sequence, but also justifies investments that initially generate a negative ROI, but in the long term enable projects with a positive ROI.

For a profound investment decision of digitalization projects, it is not sufficient to calculate the ROI for individual digitalization projects, but further digitalization potentials must be included. A strategic consideration of the ROI of use cases in a company-wide context will show that while some use cases will generate a negative ROI, they will act as drivers for other digitalization projects with a thoroughly positive ROI.

It can justify why not-profitable digitalization projects must be implemented, in order to drive digitalization successfully and profitably within the company in the long term. At the same time, a holistic approach allows synergy potential to be identified so that strategic investment decisions can be derived.

The company-wide “Return on Data Investment” as a strategic investment decision

Due to the non-obvious, indirect value contribution of the generated and used data in digitalization projects, the monetary valuation of the data represents a fundamental challenge for the establishment of a digital business. You also want to be one of the 30% of companies that successfully roll out digitalization projects? You want to develop your digitalization strategy in a profit-maximizing way and make the right investment decisions based on the data to successfully foster the digitalization potential of your company?

Then our consortial project “Return on Data Investment” is just right for you!

Together with the FIR at the RWTH Aachen and our enrolled member IW Consult, the consortium develops a methodology to determine the company-wide “Return on Data Investment”.

  • Identify the most valuable data and their financial benefits for your company.
  • Learn to make the right strategic investment decisions for your prospective digital projects.
  • Discuss other companies’ data-based use cases and examine them in a company-wide context.
  • Get exclusive access to the methodology for determining the “Return on Data Investment”

Are you interested? Would you like to learn more about the consortium? Then do not hesitate and contact us