The title to this blog is a common refrain these days and most of us don’t blink an eyelid when someone says data is an asset.
However, if it really is an asset why don’t more of us treat it like one?
In my experience, if we truly believe data is an asset, many of us don’t treat data as well as we should.
This is a big subject and I will only scratch the surface in this blog. However, I want to stimulate the reader into asking themselves questions about their data assets and hopefully inspire action that extracts more value from those assets.
This principle is quite well understood from a data point of view, but the data protection focus has been driven as much by legislation (for example, the Privacy Act) as commercial priorities. If the community hadn’t had this legislative burden imposed, I wonder how long it would have taken to reach our current level of data protection competence.
At any rate, it is generally understood that personal data must be protected in order to ensure client privacy and cyber-crime insurance is also becoming more common. Not backing up your data and storing that back up in a safe place (usually outsourced to the cloud and therefore off site) is now the exclusive domain of the fool.
Nevertheless, it still surprises me how much information is readily shared via email instead of using more secure electronic methods or how frequently applications like Dropbox (where data sovereignty might be an issue) is used for personal information. It would appear there is still plenty to learn in this space.
Given the ubiquity of cloud-based software solutions it is also vital that you understand how your suppliers protect your data. Make sure the contracts you have with these suppliers protects your data in a way that is necessary and satisfactory to you.
No asset will deliver on its potential if it isn’t well maintained. Data is no different to any other asset in this respect.
If we are to extract value from our data asset it must be accurate, relevant, easy to use and analyse.
This is the work of data asset management and requires focus and process. It’s important that we define whose job it is to do each part of this work.
Without doing the maintenance work, we will struggle to generate a return from our asset. Given the size and importance of this topic, I will be dealing with it in more detail in my next blog.
Almost all data is valuable but how can we turn the asset into dollars.
Quality data generates its returns in four main ways:
Data has rich information locked up in it that has the potential to help us understand almost everything about our business more accurately and in real time.
If extracted and analysed well it can transform the quality and scalability of our decision making and add huge value to the organisation.
Each component of this process (collection, storage, extraction, analysis, insights) can be scaled and improved using data management techniques but only a few organisations will have the resources and therefore capability to do it all at once. Digital natives (even if they are small) often have the jump on traditional business because their processes and systems have been built from the ground up to do this work.
However, as with most things data, data analytics and even the application of artificial intelligence (AI) to the results of that analysis is becoming cheaper and easier to use for smaller organisations. There are now several software packages available at modest cost, for example Tableau, ClearStory Data or even just good old Google Analytics
Those organisations that master the ability to collect, analyse and act on their data earlier than their competitors will undoubtedly have a key competitive advantage in their market places.
We don’t generally give away our assets for nothing, yet many organisations do this all the time when they provide data to a third-party for free.
On other occasions, you may be able to negotiate a better deal if the supplier realises you understand the value of your data asset.
If you are using a third-party provider and your data will be stored in their systems on a server out of your control, make sure you understand what that data can be used for and who (if anyone) is going to generate a return from that asset. Sometimes, the functionality of the provider plus the price you are paying for that functionality maybe be enough to offset the fact you are giving an asset away for nothing but make sure you do that with your eyes open.
If data has so much value, then we should be collecting as much of it as we can, ensuring its accuracy and storing it in a way that is easy to use, especially if we can do so at low cost. Many of your third-party software providers are doing this with your data already.
Data can come from two sources:
At the very least we should be collecting all our own data in a way that enables us to extract value from it.
It’s the data management processes that ensure the data is in a condition to add that value. As alluded to above, given the importance of the data management process, I will be writing about that in my next blog.
Once again though, the means of doing this are getting cheaper as running your own scalable data base and controlling your own Application Programming Interfaces (APIs) becomes more common in the Small to Medium Enterprise space.
I don’t think it will be long before those capabilities become an essential component for any organisation with growth and sustainability ambitions.