Businesses today often need much more data to achieve their goals than they can collect on their own.
Thus, they form data partnerships with each other to mutually benefit from.
What data marketplace is when it comes to one-time purchasing of data sets, data partnership is when we need many and constant transactions.
Thus, companies need to find the right partners given their data needs and set it up in the most beneficial way possible.
Let us take a look at how this can be achieved.
What Is a Data Partnership?
Before diving deeper into how to set up a good partnership, we should briefly go over what exactly a data partnership is.
Broadly defined data partnership or data collaboration is an arrangement between two or more organizations to share data or otherwise collaborate in order to advance their data-related goals.
Thus, the most basic form of data collaboration entails the exchange of valuable information.
However, such partnerships may also involve trading in analytical expertise, data storage, and analysis tools or similar informational assets.
Partnerships are usually formed by drawing up a contract. Both internal data governance rules and external laws and regulations apply and guide the conduct of the partners.
The Advantages of Partnering Up
As mentioned, companies form partnerships in order to advance their data-related purposes.
How exactly does partnering up help the firms with their informational and broader business goals?
Firstly, businesses can get additional data about their customers and leads from their partners.
This means understanding the client better by looking at not only their personal information but also at how they related to other brands.
With such enhanced understanding, companies are able to provide better-personalized orders and make adjustments to their services that will be welcomed by the client base.
Secondly, partners help to look for new potential clients by providing important data points about their customer base.
This enhances lead generation as well as gives an idea of how different kinds of consumers could be attracted to the business.
Additionally, data partners can boost the competitive intelligence of each other by sharing what they know about their mutual competition.
This makes for a coordinated strategic move that can help advance the position in the market of all the collaborating parties.
Furthermore, data partnerships boost the market intelligence of all the partnering firms.
As no company can gather all the data needed for high-level market understanding themselves, collaborating with a partner helps greatly to fill the knowledge gaps.
Finally, such partnerships, when set up right, are cost-effective.
Other ways to collect or acquire the necessary data and analysis tools are not only more costly but tend to be less certain to succeed.
With partnerships, firms should know exactly that they will get what was agreed upon. This takes us to the question of setting the partnership right.
Doing It Right
The benefits of data collaboration are beyond a reasonable doubt, thus what matters the most is how to set the partnership correctly.
That is how to do it so that one truly benefits from it and avoids being taken for a ride or losing where one should be winning.
There are some serious risks here. For one thing, there are always bad agents out there that aim at using their partners for their own purposes instead of cooperation and do not care about data security.
And, for another thing, even good-willed partners might make mistakes, unduly endangering data privacy and accidentally breaking regulations, which would damage the reputation of all firms forming the partnership.
The main foundational step of ensuring that the partnership is set up right is drawing up a thorough and well-prepared contract.
Thus, when entering a partnership both your legal team and your data experts should look through all the details of the agreement.
This is both to ensure that there is no concern of legal mishandlings and that your data needs will be covered to the required extent.
Additionally, the agreement should include robust reporting procedures.
This also includes a regular schedule for reports regarding what sort of data or services are received or accessed by the partner.
Many data platforms and apps have in-built reporting features that make it not that hard to ensure.
Finally, audit rights should be secured in order to truly ensure that your partners are not dishonest.
When partners audit each other’s usage of their data, they know that the sensitive information is not used beyond agreed terms or stored and transferred insecurely.
Auditing the data usage is also not too complicated these days with the help of the right tools and procedures that are agreed upon in advance.
In conclusion, data partnership can certainly be very beneficial and often is the right choice to answer the firm’s data needs.
However, one has to make a point of doing it right and setting firm terms of agreement with the partners to avoid any legal or reputational troubles.
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