Data Products: 9 Best Practices To Minimize Risk - InformationWeek

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5/9/2016
07:06 AM
Lisa Morgan
Lisa Morgan
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Data Products: 9 Best Practices To Minimize Risk

Data generation, collection, and analysis are making their way into more types of products and services. The trend is creating new opportunities for innovation, some of which are so impactful, they're causing some companies to revisit their business models. The path to success isn't always obvious, however, so here are a few best practices to keep in mind.
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Consider The Business Impact 

Organizations tend to underestimate the amount of effort, patience, and open-mindedness that may be required to create and maintain successful data products. Similarly, it isn't always apparent what degree of impact a data product may have on the business.  
For example, a consulting company morphed into an application company because an investor perceived an opportunity the founders had not considered. At the time, the consulting company was working with a hospital to improve the spend management associated with implantable devices used in knee, hip, spine, and cardiac surgeries. To do its job more effectively, the consultancy developed a system that was used for internal purposes. Just as the company was closing a round of seed funding to fuel its growth, a new investor noted that the funding was adequate to grow the consulting business but inadequate to build a SaaS product. As a result, the founders decided to pursue the new direction. They ultimately launched Kermit, a spend management analytics platform that's built on the Mendix application platform. The full-featured version of Kermit allows surgeons to see what the implants will cost, and allows hospital executives to better understand profitability. It also automates invoice auditing and contract compliance.  
'When a surgery is performed, the sales rep for the implant company uses a piece of paper to track the items that were implanted,' said Richard Palarea, CEO of Kermit, in an interview. 'What started out as an internal need to calculate savings [by] negotiating better price points turned into an opportunity to create an electronic, intelligent version of the paper bill sheet being used -- one that could capture overt and covert billing errors before they are submitted to the hospital for payment.'  
(Image: PublicDomainPictures via Pixabay)

Consider The Business Impact

Organizations tend to underestimate the amount of effort, patience, and open-mindedness that may be required to create and maintain successful data products. Similarly, it isn't always apparent what degree of impact a data product may have on the business.

For example, a consulting company morphed into an application company because an investor perceived an opportunity the founders had not considered. At the time, the consulting company was working with a hospital to improve the spend management associated with implantable devices used in knee, hip, spine, and cardiac surgeries. To do its job more effectively, the consultancy developed a system that was used for internal purposes. Just as the company was closing a round of seed funding to fuel its growth, a new investor noted that the funding was adequate to grow the consulting business but inadequate to build a SaaS product. As a result, the founders decided to pursue the new direction. They ultimately launched Kermit, a spend management analytics platform that's built on the Mendix application platform. The full-featured version of Kermit allows surgeons to see what the implants will cost, and allows hospital executives to better understand profitability. It also automates invoice auditing and contract compliance.

"When a surgery is performed, the sales rep for the implant company uses a piece of paper to track the items that were implanted," said Richard Palarea, CEO of Kermit, in an interview. "What started out as an internal need to calculate savings [by] negotiating better price points turned into an opportunity to create an electronic, intelligent version of the paper bill sheet being used -- one that could capture overt and covert billing errors before they are submitted to the hospital for payment."

(Image: PublicDomainPictures via Pixabay)

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