Most organizations have people or teams to optimally manage their valuable corporate assets. Real estate teams manage and optimize the use of space. IT manages the technology. Same with inventory, cash and investments, and people resources. Even intangibles like patents and other intellectual property. But with data – arguably one of our most valuable resources – who is managing it and optimizing its value?
Our digital economy runs on data. The right data helps us improve how we serve our customers, make better decisions, and drives new revenue streams. Some companies seem to be pretty good about deriving value from their data (think Facebook and Google). But what about the rest of us?
For many companies today, the answer to the question is “no one.” Data is not an asset on the balance sheet (as per established accounting rules; see IAS 38), so a CFO doesn’t necessarily have to make sure that it is accurately reported and optimized. Yet, most employees work with data, and lots of it, every day. What can we do to become better stewards of this critical asset? How can we help our organizations manage it effectively? The following tips – which everyone can do – will help.
Tip #1. Reduce the costs of data throughout its lifecycle. Research suggests that as much as 50 to 60 percent of an organization’s data is not used at all, so think about the costs to acquire, store, protect, inventory, and archive all that data. Before acquiring new data, ask if your organization already has it in some form. Then only keep the data you actually need. Delete it when you no longer need it.
Tip #2. Find ways to derive even more value from the data you already have. Do this not just for your daily tasks, but for your organization as a whole. What does your data tell you about how to serve customers better, how to make better investment decisions, and how to create more sales? Consider who might get value out of this data, especially people outside your team and even outside your company. Can the data be safely bartered or sold (perhaps after removing any confidential elements)? According to Gartner’s Doug Laney, the grocery chain Kroger generates an estimated US$100 million per year by selling product sales data to packaged goods manufacturers. Rolls Royce monitored service outages in the aircraft engines it builds and created a new revenue stream selling engine miles (rather than engines) which is now 70 percent of the engine division’s business, according to Bernard Marr.
Tip #3. Curate and inventory your data. If no one else in your company knows what data you have, they cannot find ways to create new value. Make sure there’s a catalog of the data you have, along with the metadata describing what’s in it, where it is stored, when it was created, and so on. For security and privacy reasons, everyone should not have access to all data, but at least they should know where to go to seek approval if they have a valid reason to use this data.
These tips will help create an info-centric culture at your organization. Beyond the cost and revenue benefits, managing your data well can create new market value for your company. Gartner has compared the market premium (as measured by the Q Ratio), and concluded that info-centric organizations are valued two to three times higher than otherwise similar organizations. With the opportunity to reduce costs, identify new revenue opportunities, and create a market premium for your company, let’s hope the answer to the question “Who is managing our data assets?” is “Everyone”.