April 13, 2023
Build Data Products Like CARFAX by Following These 8 Imperatives
Do you have lots of data, but are wondering how to commercialize it?
If so, you’re not alone. CARFAX had a similar opportunity nine years ago when they first engaged 3Pillar Global. Since then, we’ve helped them aggregate and disseminate 17 billion records from 96,000 data sources to bring six digital products to market.
Now, CARFAX leverages their data to provide consumer-facing insights that connect buyers, sellers, and service providers across the whole lifecycle of a vehicle. If you’ve bought or sold a vehicle recently, you know just how helpful pricing intelligence and ownership history can be.
By applying the same principles, you can accomplish something similar—turning your data into insightful products that generate revenue.
Here’s a brief rundown of the eight imperatives you need to succeed at platform modernization and data productization, just like we did with CARFAX.
1. Identify clear outcomes aligned to your product strategy
Your first step in any platform modernization effort should be to prioritize your capabilities based on their alignment with your strategy. This implies that you have a clear product strategy that defines the value your new or updated platforms will deliver for your customers.
In addition to existing capabilities, consider the new capabilities your organization needs to deliver a value-driving platform. This will certainly require engaging experts and partners that specialize in not only certain technical capabilities, but also have the mindset to grow.
2. Categorize your legacy technology
Platform modernization requires you to categorize your existing tech stack and determine which systems to contain, maintain, or enhance:
- Contain applications that require minimal support and updates
- Maintain applications that require continuous support and major enhancements
- Enhance applications that are strategic and revenue-generating, resulting in tangible benefits
Factors to consider for categorizing applications include the user count, operational criticality, support costs, and the backlog of bugs to fix. Depending on how you categorize, you may need to refactor, rewrite, or retire any or all legacy applications.
3. Shift your mindset from outputs to outcomes
Platform modernization isn’t about technology. It’s about empowering your organization with the capabilities you need, today and tomorrow, to accelerate product innovation and promote business agility. It’s not about feature parity with your legacy technology.
Without this cultural change, you’ll just end up layering your existing problems onto your shiny new platform.
As such, it’s just as important to transform your business model and culture as it is to develop new technology. This requires shifting your focus from outputs to outcomes:
- Output-focused teams ask: How much can we get done?
- Outcome-focused teams ask: How do we develop the features & capabilities that provide the most value to the customer?
Adopting a product mindset requires you to invest in training and coaching developers on new ways of approaching products. To drive a positive culture, provide developers with an environment where they’re allowed to experiment (and fail!) and conduct blameless postmortems. This encourages open communication and shared context on mission and goals.
4. Implement new processes for your software teams
Your development team will be able to adopt new ways of working that allow them to produce frequent and short application releases. This approach, along with cultural change, will improve your team’s productivity, quality, and impact.
5. Identify performance baselines and target KPIs
To understand where you’re headed, you have to first figure out where your feet are now. This requires establishing performance baselines for your legacy systems.
Once you have a clear picture of your current state, you can establish reasonable and measurable KPIs for your platform modernization engagement. These can include the number of active users tapping into a new service or how many business units rely on a new service.
You can also measure the impact on revenue and user satisfaction as well as application performance, such as the ability to support demand elasticity and optimizing the time users require to perform and complete operations.
This process not only has the benefit of establishing clear markers for each step of the journey, but makes clear and visible the benefits you’re receiving along the way. This can boost leadership and stakeholder buy-in and engineering team morale.
6. Create unified data stores and remove silos
Eliminate silos of information by integrating applications, data, and devices. This will create more efficient business workflows for end-users by ensuring that all resources—both internal and external—are rowing in the same direction.
To achieve this, consider architectures that enable interaction between different applications. It is much easier to accomplish this with cloud native, microservices architecture than a legacy monolith.
7. Create new features that add value to the end user
Platform modernization also requires eliminating redundancies, which will drive efficiencies, as well as investing in meaningful new features. Following this principle results in optimizing user experiences and increases the long-term value of your applications.
However, most information services companies cannot afford to shut down their legacy applications for the duration. By incrementally innovating specific features and capabilities, your team can keep new technologies in sync with the old, ensuring the value train never stops.
8. Keep your data clean
Modernizing your data is one of the most important facets of platform modernization. This includes updating the data architecture, certifying the security posture, and redesigning the schema. By modernizing your data, you create a foundation for analysis that leads to valuable business insights.
How to succeed with your platform modernization project
For information services companies, platform modernization is more than simply updating your technology. If you look at CARFAX, you’ll see that they found ways to innovate their data delivery methods to provide more direct value to end users.
By following these 8 imperatives for platform modernization, you can seamlessly and efficiently fix your brittle, legacy architecture and open up new revenue streams for your business. What’s more, you’ll have the process in place to seize new product opportunities when they arise.
If your company is looking for help with modernizing your application platform, we would be glad to help. Contact us today to speak with a 3Pillar expert.