Before figuring out, Is Data an Organizational Asset or not, we must know what is an asset.
Form Data Management School perspective, we understood asset is something that generates or saves (prevents unnecessary loss) in terms of monetary value. Without a second thought we believe this definitely resonates with many of the widely available perspectives or definitions regarding asset. The stuff that does the work of an asset for the organization is an organizational asset.
Then the question is how data does the work of an asset to become an organizational asset. In essence if we can see various ways how data generates or saves monetary value for an organization then it becomes an organizational asset.
It has been a challenge for the organization to quantify the economic value generated or saved by data management initiatives or programs. However, the objective of this article to give an overarching view regarding data as an organizational asset. In early 90s, there were skepticism regarding goodwill as an organizational asset and quantifying this in terms of monetary value. Now, the ‘value of goodwill, commonly shows up as an item on the organizational financial statements. Similarly, the awareness regarding monetization of data is increasing. Who knows, data might appear on the organizational financial statements in terms of monetary value in future.
Now, let’s see few examples where data does the work of as asset.
First, how data saves monetary value for the organization.
Here is a website https://enforcementtracker.com/
If you visit this website, you will see various fines imposed on the organizations due to non-compliant to regulations followed by data breaches. And the amount is significantly high. Here is the snippet for reference from enforcementtracker. Left side image represents the cumulative fine over a period of time and the right side shows the non-cumulative fine.
Appropriate data management strategy intact with the industry dynamics can save this much monetary value over a period of time. This is not all, there several ways effective data management saves money.
- Optimized Resource Allocation: By effectively managing data, businesses can allocate resources more efficiently. This means they can invest in the right areas, avoid over spending on unnecessary resources and optimize operational costs.
- Improved Decision Making: Properly managed data provides insights that enable better decision-making. By making informed decisions, businesses can avoid costly mistakes and capitalize on opportunities, ultimately saving money in long run.
- Enhanced Productivity: Efficient data management streamlines processes and workflows, reducing the time and effort required to access and utilize data.
- Streamlined Operations: By integrating and centralizing data from various sources, businesses can streamline their operations, eliminate redundancies and avoid inefficiencies, leading to cost savings across the organization.
Now, let’s see how data generates monetary value for the organization.
Data management is not only about cost savings but also about leveraging data to drive revenue growth, enhance competitiveness and unlocking new business opportunities. There might be many other ways of generating money by leveraging data was existing and it’s not limited to the following examples. And, in future a lot of news ways will come to generate monetary values from data.
- Data Monetization: Companies can monetize their data by selling it to third parties, such as market researchers, advertisers or other businesses looking for valuable insights. This can create new revenue streams and unlock the latent value of data assets.
- Improved Marketing and Sales: Effective data management enables businesses to better understand their customer’s preferences, behaviors and needs. By leveraging this insight, companies can target their marketing and sales efforts more effectively, resulting in increased customer acquisition, retention and ultimately, revenue generation.
- Personalization Customer Experience: By utilizing data management techniques to analyze customer data, business can deliver personalized experiences tailored to individual preferences and behaviors. This can lead to increased customer satisfaction, loyalty and ultimately higher revenue through repeat purchases and referrals.
Finally, data in itself is not an organizational asset. Organization has to manage data to make it as an asset. Because, if an organization will not strategize and manage its data then data will not do the work of an asset. It will become a liability which will only cost the monetary value. Imperatively, organization’s data management strategy must be flexible and dynamic enough to accommodate the changes and trends around the evolution of data.
Reference:
To read on what exactly data management is, find the following link to the article.
https://datamanagementschool.com/what-is-data-management/
We would definitely love to hear perspectives from you. Please comment in the comment section.