The Value of Data
Posted by 
Share this Post
Many executives still don't see data as the asset it can be.
In preparing some presentations about MDM and Data Governance, one theme keeps coming up that also appeared loud and clear in our recent Data Governance survey. (The survey is now closed as we analyze results.) That core issue is that most businesses do not understand the value of data to their organizations. This does not shock or even surprise me, but it still bothers me.
The Evolution
Over the last 25 years, we started putting data into more open databases and began managing more data than we’d been able to gather before. We were beginning to use relational and later entity-relationship modeling to describe the data being managed by our organizations and began to use SQL to access data in ways we could never have dreamed of before.
It began to occur to those of us who were architects of enterprise systems that data were becoming more and more important. Then, in the late 80s we began using Enterprise Architecture to examine the role of data within an enterprise, and in the early 90s we began integrating data in data warehouses.
But we never were able to quantitatively prove to business leaders that data were an asset.
We’ve never been able to show a direct “line of sight” that measures the value of data in meeting (or hindering) organizational goals. The best we were able to do is wear our business leaders down by arguing that since some data were in lots of systems and lots of processes, certainly it must be an asset.
Then we showed them data models, drew loads of Create Read Update Delete (CRUD) matrices and talked about online analytical processing (OLAP) etc. – “convincing” them and “coercing” them into agreeing that data are an enterprise asset.
But if you asked them to spend real money or make a real bet based on data as an asset, very few would make that bet.
Survey Says…
Our survey validated that this is still an issue, and one that we must begin to address. The question asked if the respondents’ leadership saw data as only an application resource, or as an enterprise asset that deserved to be managed accordingly.
The largest segment, almost 27% of respondents, said that “data are a somewhat valuable asset with suspected value.” Only 27%. That’s a little surprising, even for me.
The second most popular answers, tied at just over 22% each, said that “data are a critical business asset with known value” – that’s encouraging – and “data are an application resource that always seem to be broken.” Not altogether surprising.
The third of five answers that was voted on almost 16% of the time said that “data are an application asset with some intrinsic value.” The lowest ranking answer at just over 13% said that “data as an asset are not even on their radar screen.”
We have to do better. We need to collect metrics that measure where data are actually being used, how value is tied to those data, and how data quality affects the quality of those assets and therefore the value to the business.
How much does it cost to allow a redundant customer record? How much does waste or fraud cost the company? How many transactions are rejected due to poor data quality and what does it cost to re-process those transactions? Those are the easy metrics to capture, but we must start!
Have you begun doing this in your organization or with clients? How has it been received?
3 Responses »
Trackbacks
Leave a Response
Entries(RSS)
Seems link for survey is not right -- clicking on it produces "Webpage cannot be found" error.
Randy, the survey has ended. I just removed the old link so it no longer returns an error. Thanks for the heads up!