News
 Data:
Your Ultimate Asset
Thomas C. Redman PhD (“the Data Doc,”) is
president of Navesink Consulting Group
Data are assets on par with other assets such as
people and capital. Here I’ll argue that they can be
even more. Indeed, properly leveraged, data can be
an organization’s ultimate proprietary asset! This
has enormous implications for management.
Managing Data Assets
Almost all organizations recognize “capital,” in its
various forms, and “people,” including the knowledge
in their heads, as assets. Assets command special
treatment. In particular, managers and
organizations:
1. Take care of their assets. As examples,
they make sure they have the right amount of cash on
hand. They strive to employ the right number of
people with the right skills and they train future
leaders.
2. Put their assets to work. They invest
their capital in new technologies only when doing so
pays greater return than employing it elsewhere.
They strive to run their factories at optimal
capacity. They put their people to work throughout
the organization. The goals are to increase revenue
and decrease cost.
3. Advance their management systems in
recognition of the special properties of these
assets. Managers recognize that they can’t
manage people the same way they manage money.
Employees have capacities to learn, give extra
effort, and work with others. Managers try to unlock
these capabilities. They can also complain and build
fiefs that capital cannot. Importantly, almost all
organizations have C-suite officers focused on
capital and people to lead their efforts.
An Organization’s Data are Uniquely Its Own
The most important property is that an
organization’s data are uniquely its own. It is an
easy point to miss and merits a moment’s reflection.
No other organization has, or can have, the same
data about an organization’s customers, its
marketplaces, its products and services, its
processes and operations, and so forth. This
property arises in three overlapping ways.
First, each organization can define its data in its
own unique ways, capturing and codifying all the
subtle and nuanced ways it distinguishes itself from
competitors. Consider “customers.” Each business
defines its “customers” in subtly different ways.
Brokers call their customers “accounts,” consultants
call them “clients,” department stores call them
“shoppers,” doctors call them “patients” and so
forth. Each organization has, and always will have,
the ability to think about and model “customers”
differently, to capture different “facts” about
customers, to utilize those facts to create new
niches—and new products and services uniquely suited
to customers. This ability extends to all other
data.
Second, each organization creates or obtains new
data values every day. It does so simply by
conducting business. Each new customer order, indeed
every action, creates new data. Data volumes grow at
enormous rates—an InformationWeek article estimated
that it takes twelve to eighteen months for a
typical organization to double the quantity of data
it possesses. No one else has these data values.
Third, data seem almost organic in nature. As one
example, data collected by one department for one
purpose may lead a second department to ask a new
question. The first department’s data help, but lead
the second department to define a new data element,
based on the first, but subtly different. And more
unique data are born.
Implications for Management
A full discussion of the implications of this
property of data is well beyond the scope of this
paper. Still, a few comments are in order.
First, companies struggle mightily to achieve
competitive advantage. It is absolutely clear that
data offer unprecedented opportunities to gain such
advantages. They (data) merit special attention for
this reason alone! So far, of course, few companies
have begun to seriously exploit these opportunities.
Doing so will require far greater and more concerted
effort than applied so far.
Second, too many organizations subordinate “data
management” inside their IT departments. But data
and information technologies are different kinds of
assets and most technology departments already have
their hands full. So efforts to put all this unique
data to work must be led by “the business.” Better
still, a Chief Data Officer.
Third, and the first two points notwithstanding, not
all data are created equal. Some are not unique.
After all, companies have to exchange data with each
other in everyday commerce. And some data, even if
unique, are of no particular value. So an important
step is to determine which data:
• Offer the greatest potential for creating and
sustaining advantage;
• Are essential for setting and executing strategy,
critical business operations, and external
reporting;
• Are important for operations and tactical
decision-making; and,
• Are never used and offer little future potential.
Clearly then, organizations must focus their efforts
on the top categories and spend much less time on
the lower categories.
Finally, this discussion highlights the importance
of more concerted data security efforts. Indeed,
losing or having its “greatest potential” data
stolen may be the number one threat to exploiting
these proprietary assets.
---Source: The
Data Strategy Journal (www.datastrategyjournal.com).
Thomas C. Redman is president of Navesink Consulting
Group (http://www.dataqualitysolutions.com).
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