Professional service businesses
Licensing Historical Business Data for AI: A Guide for Professional Service Businesses
AI-assisted educational guide with automated source checks. FirmSignal is independent of Mode and may earn a referral fee if you complete a qualifying transaction through our link. Eligibility, valuation, terms and data handling are determined by the buyer.
Professional service businesses generate vast amounts of data through their daily operations, including project delivery, business operations, and internal documentation. This data can be a valuable asset, not only for improving internal processes but also for licensing to third parties for use in artificial intelligence (AI) research and training. In this article, we will explore the opportunity of licensing historical business data for AI, what makes operational context useful, and provide a concrete first assessment for businesses considering this option. According to Mode, companies can get paid for their operating history, and the process typically takes about three months from the first conversation through payment [1].
What is a Company Data Partnership?
A company data partnership involves a business partnering with a third-party organization to license its historical operating data for use in AI research and training. This data can include email, documents, chat, CRM, and billing data, among other types. The partnering organization, such as Mode, agrees on the scope of the data to be licensed with the business and removes or transforms sensitive information before onward delivery.
- Determine the types of data to be licensed
- Agree on the scope of the data with the partnering organization
- Ensure sensitive information is removed or transformed
What Makes Operational Context Useful?
Operational context is useful because it provides a rich source of information about how a business operates, including its processes, decisions, and outcomes. This context can be used to train AI models to improve business operations, such as automating routine tasks, predicting customer behavior, and optimizing resource allocation. By licensing their historical business data, companies can unlock new revenue streams and contribute to the development of more sophisticated AI models.
- Identify the types of operational context that are relevant to your business
- Determine how this context can be used to improve business operations
- Consider the potential revenue streams from licensing this data
Concrete First Assessment
To determine whether licensing historical business data for AI is a viable option for your company, you need to conduct a concrete first assessment. This involves identifying the types of data you have, determining its potential value, and considering the potential risks and challenges associated with licensing this data. You should also review your company's data management practices, including data storage, security, and access controls. The Federal Trade Commission (FTC) provides guidance on protecting personal information, which is essential for businesses considering licensing their data [2].
- Inventory your company's data assets
- Assess the potential value of your data
- Review your data management practices
Hypothetical Worked Example
Let's consider a hypothetical example of a professional services firm that wants to license its historical business data for AI. The firm has a large dataset of project delivery information, including emails, documents, and chat logs. The firm wants to license this data to a third-party organization, such as Mode, for use in AI research and training. The firm's data inventory might include the following entries:
System: Email, Date coverage: 2018-2022, Internal owner: IT department, Useful workflow context: Project planning and execution, Exclusions: Personal emails and sensitive client information
System: CRM, Date coverage: 2020-2022, Internal owner: Sales team, Useful workflow context: Customer relationship management, Exclusions: Financial information and personal data
System: Chat logs, Date coverage: 2019-2022, Internal owner: Customer support team, Useful workflow context: Customer support and issue resolution, Exclusions: Personal data and sensitive information
System: Billing data, Date coverage: 2018-2022, Internal owner: Finance team, Useful workflow context: Financial management and planning, Exclusions: Personal data and sensitive financial information
- Identify the systems and date ranges for the data to be licensed
- Determine the internal owners and useful workflow context for each system
- Specify the exclusions for each system
Questions to Ask a Buyer
When licensing historical business data for AI, it's essential to ask the right questions to ensure that you're partnering with a reputable and trustworthy organization. Some questions to ask a buyer include: What is the intended use of the data? How will the data be stored and secured? What are the terms and conditions of the licensing agreement? What are the potential risks and challenges associated with licensing this data?
- Ask about the intended use of the data
- Inquire about data storage and security
- Review the terms and conditions of the licensing agreement
- Discuss potential risks and challenges
Uncertainty and Risk
Licensing historical business data for AI is not without uncertainty and risk. There are concerns about data privacy, security, and ownership, as well as the potential for data to be used in ways that are not intended or anticipated. Companies must carefully consider these risks and take steps to mitigate them, such as implementing robust data management practices and negotiating clear and comprehensive licensing agreements.
- Consider the potential risks and challenges associated with licensing historical business data
- Implement robust data management practices
- Negotiate clear and comprehensive licensing agreements
Conclusion
Licensing historical business data for AI can be a valuable opportunity for professional service businesses, but it requires careful consideration and planning. By understanding what makes operational context useful, conducting a concrete first assessment, and asking the right questions, companies can unlock new revenue streams and contribute to the development of more sophisticated AI models. However, it's essential to be aware of the potential risks and challenges associated with licensing this data and take steps to mitigate them. As noted earlier, Mode provides a platform for companies to license their data, and the FTC provides guidance on protecting personal information [1] [2].
- Understand the potential benefits and risks of licensing historical business data
- Conduct a thorough assessment of your company's data assets
- Negotiate clear and comprehensive licensing agreements
Frequently asked questions
What is a company data partnership?
A company data partnership involves a business partnering with a third-party organization to license its historical operating data for use in AI research and training.
What types of data can be licensed for AI?
The types of data that can be licensed for AI include email, documents, chat, CRM, and billing data, among other types.
How can I ensure that my company's data is secure when licensing it for AI?
To ensure that your company's data is secure when licensing it for AI, you should implement robust data management practices, such as data encryption, access controls, and secure storage. You should also negotiate clear and comprehensive licensing agreements that address data security and privacy concerns, as recommended by the FTC [2].
Sources and further reading
Program criteria can change. Confirm current eligibility and written terms with the buyer. Hypothetical examples illustrate preparation and are not actual transactions.