It’s a pleasant surprise to find money you weren’t aware of in your pockets or drawers. Wouldn’t it be great if your business also found money lying around during this difficult time?
The good news is if you look closely enough, you may find an untapped, non-depleting asset sitting almost idly across your organisation. If you guessed we’re talking about data, you'd be correct.
Arguably, data is the most underutilised asset in any organisation. This is despite the fact that intangible assets, of which data is a critical part, have long been considered the key value driver for businesses.
Intangible assets like data have traditionally been a challenge in terms of both managing and communicating their value. Financial reporting has not evolved fast enough to adequately capture the true value of the organisation’s data and to address the needs of business decision-makers.
Despite the rapid growth in its volume and utility, data is still not included in corporate balance sheets. Board members, managers, investors, and other stakeholders are increasingly aware of the significance of intangible assets, but they still desperately need solutions to this information gap.
At the end of the day, an overarching theme of these hurdles is how challenging it is to put the right value on your data. And until that challenge is overcome, data cannot be tracked, managed, and reported properly.
Still, there are a few hurdles to be surmounted before organisations can fully realize the value of their data.
The first comes from the sheer volume of data and the fact that data does not always have an intrinsic value. We are creating 2.5 quintillion bytes of data each day. Extracting value from such a mind-bending amount of data is literally the equivalent of mining for gold with a pan in the middle of the desert.
And then there is the question of whether we have understood the true potential of data as an asset in the first place.
On one hand, data has been at the forefront of discussions in recent years among business leaders and experts alike, driven by the increasing importance of data-driven decision-making and a reduction in the cost of data processing and analytics technologies.
On the other hand, in most of those discussions, data is regarded as a tool, a catalyst of transformation rather than a revenue-generating asset by itself. Whilst there is nothing wrong with finding out how data can help you make better decisions, you can always take one step further by asking yourself: “How much is my business data worth?”
There are 3 major approaches to data monetisation: cost, income, and the market approach.
In the first approach, the value of data is estimated as the costs of replacing the utility of your data if you lost that data.
The income approach places value on your data as additional income or saved costs contributing to your products, services, or operations.
And finally, the market approach measures how much your data is worth if it is for sale in the open market.
Regardless of which approach you choose, you first need to ensure the quality and usability of your data. Just like any tangible asset, the more refined and high-grade your data is, the more value it can generate. Failing to do so means you cannot escape the paradox of the more data is generated, the more underutilised as an asset it becomes.
You also need to establish an organisational culture that embraces data, one that can make people believe in data and the importance of treating data as a critical asset.
And lastly, data monetisation should not be a one-off effort but a part of the overall enterprise digital strategy, one crafted with a well-thought-out process and forward-thinking vision.
In case you need more guidelines and inspirations for your digital strategy, we have TRG Talk Virtual: Digital - a series of events where you can get the answers you need from leading industry experts. Visit our website today to watch past events or register for upcoming ones.
