How ironic that we live in an ‘information’ age, yet so many companies don’t treat their information as their most valuable asset. While companies speak about how valuable data is to them, the reality is that most spend thousands on tracking physical assets, whereas little time or value is assigned to managing information.
Infonomics, according to Gartner, is the emerging discipline of managing and accounting for information with the same or similar rigour and formality as other traditional assets (e.g. financial, physical, intangible, and human capital).
“They [companies] report to the board on the health of their workforce, their financials, their customers, and their partnerships, but almost never the health of their information assets,” says Doug Laney, author of the book Infonomics. Laney believes that “information is not ‘the new oil’ as so many have not-so-cleverly claimed. Rather it has characteristics that render it an order of magnitude more potentially valuable than oil”.
In particular, information, unlike oil, can be reused by a number of players simultaneously and for more than one purpose. This is a really key characteristic of information and it should be utilised in as many ways as possible.
“Right now, every CIO, CEO, and business leader should be asking themselves: Why isn’t our organisation monetising, managing and measuring information as an asset, and how the heck can we hope to thrive, let alone survive, in an increasingly digital world without doing so?”
Laney points out that companies are moving towards harnessing this value, as in the case of MISO Energy in Indiana, US. They identified information assets that were costing them more to collect, store and secure than the value they were generating. “This enabled them to make the decision to dispose of the data, thereby saving them over a million dollars a year in unnecessary infrastructure costs.”
Laney adds that in his experience, information savvy companies tend to have a market value twice that of the average company and seem to be valued more by investors.
How to make the most of your data
Data assets can reach their full potential only when they are monetised, managed and measured. In order to do so, Laney suggests the following:
Monetise: Recognising and using the economic characteristics of data is still in its infancy. Yet, organisations are using data to rethink their produce offering, business process and services. However, Laney believes that there is still a lot of data that is being underutilised or ignored completely due to a lack of knowledge around how best to exploit it.
Manage: Interestingly, “no widely accepted set of principles and practices exists for managing information as an actual asset”. Laney reveals that utilising asset management methods and standards from other domains may be just as effective. These should be adopted and adapted to improve information asset governance, availability and utility.
Measure: “Most organisations lack any reliable way to determine the potential and realised value of their information assets – merely because information is not a recognised balance sheet asset,” says Laney. It is vital that information is valued as an asset “to justify and prove information-related investments, spur information-based innovation, and foster an information-driven culture”.
The following best practices can be considered as starting points for becoming more ‘data-centric’:
- There must an executive level officer responsible for your data assets.
- Consider separating Information and Technology in your IT business.
- Measure your data governance efforts, utilising well established asset management practices.
- Treat your data as an asset and utilise asset management principles.
- Understand that monetisation isn’t necessarily selling data – it is about generating economic benefit from the data. Such as by improving efficiency, only keeping data that is truly needed or simply improving customer service.
More and more we see how data is being utilised and considered in different ways across the entire economic and social value chain. Utilities already have the benefit of operating in data rich environments. The impetus now is on making the most of that benefit to secure their futures and the economic prosperity of their businesses. ESI
Metering feature proudly sponsored by Landis+Gyr