A practical guide to Data Valuation

Why you must value your data now and how to start.

Key sections

What is Data Valuation?

Unlock the benefits of Data Valuation

How to calculate the value of data

Data Valuation is the foundation of a winning data strategy

Take the next steps

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Last updated in February 2024.

What is Data Valuation?

Data valuation is about understanding what your data is worth to your organisation by putting a monetary value on it. This allows you to manage your data better because it’s transformed from something abstract, to something measurable and understandable outside of technical audiences. Doing so allows you to prioritise your resources on the data that is most valuable and increase the return on investment from your data initiatives.

The rise in the value of data has led to a desire to put a monetary value on it. From what we’ve seen in our work with organisations and our own research, data can easily account for 20% to 30% of an organisation’s total value.

But with so much value going unrecognised or being poorly understood, how are organisations making informed decisions about their data and how to manage it? The unfortunate reality is that many of them aren’t.

Unlocking the benefits of Data Valuation

Data is critical to your organisation. Yet, many leaders admit they don’t have a good handle on why or how data is valuable. In our experience, understanding the value of data is the first step to becoming a data-driven organisation. Putting a monetary value on data transforms how data is treated. It grabs the attention of senior leadership and changes the data culture from the top down.

We have seen CDOs get a seat at the table, and data teams’ budgets rightsized to meet their needs as a direct result of valuing their data. This is because expressing data assets in terms of £/$/€/¥ is very powerful – it is the language of business that enables data teams to express the value of data in a way that everyone can understand.

Data can be technical and abstract, and therefore hard for most people in an organisation to think strategically about. So, it’s important to be able to cut through the noise and communicate how it contributes to your organisation’s success, just like other assets. In doing so, it enables both the data-savvy and the laypeople to focus on what’s important: value creation.

Carrying out this type of data valuation is transformative at all levels of your organisation and allows you to:

1. Make better decisions

Understand the data that drives your most important decisions and invest in making it more reliable. Build a strategy on reliable data so you can trust the decisions you make.

2. Focus your spend

Resources aren’t infinite, so it’s important to spend wisely. Data valuation allows you to target your resources towards the data assets that can deliver the most value.

3. Understand what you’ve got 

A monetary value of data. This is a language the organisation understands, which means they understand the value of data. Especially because this number makes data comparable with other assets in the organisation.

4. Change the culture 

Create a data culture by having a shared understanding of what data is valuable. Instead of trying to convince people of the theoretical value of data, use the monetary value to tangibly show it, and have time to get on with solving the most important data problems facing your organisation. No shrewd businessperson is going to ignore an asset that’s valued in the millions or billions.

5. Empower your team 

Transform your team from being seen just as technical folk into the custodians of, and experts on, some of the organisation’s most valuable assets.

How to calculate the value of data

By now it should be clear that the benefits of doing a data valuation are tremendous, and you might be asking yourself the billion-pound question: how do you do a data valuation? 

There are many different ways to value data. Ultimately, the right one for you depends on what outcomes you want from your data valuation. 

In the video below we discuss some of the benefits of data valuation, the pros and cons of different data valuation methodologies, and we even discuss how to get data onto the balance sheet. 

  • Intro
  • 00:35 – Overview
  • 01:54 – Intangibles now make up 90% of S&P 500 
  • 03:11 – Organisations aren’t making the right investments in data
  • 04:36 – Data is a new kind of asset
  • 05:58 – Why is data not on the balance sheet?
  • 08:38 – What’s been going on in data?
  • 11:17 – Leaders say data’s important, but it’s not managed as such
  • 14:51 – Data asset management and data valuation are critical
  • 16:56 – Different data valuation methodologies
  • 20:53 – Data valuation in action
When deciding how to calculate the value of data, you will need to choose the right methodology for your organisation. As we mentioned above, not all methods are created equal.

Typically, we opt for our stakeholder data valuation, as it gives the most holistic view of your data value, through the eyes of your most important stakeholders, such as investors, customers, society and regulators.

Traditional data valuation methods often focus heavily on the cost of data or are focused on calculating its sale price, without considering the broader context. Our approach highlights the value of your assets today in the context of your organisation’s objectives and what the data is used for. Valuation isn’t an end in itself, it’s a means to achieve better data management and make better decisions.

We’ve used our stakeholder approach to successfully measure the value of data for our clients. Our work has been instrumental in changing the conversation around data in those organisations. By putting a number (and a very large one at that), data’s value has become undeniable.

Data Valuation is the foundation of a winning data strategy 

Once you’ve valued your data, what do you do with that new knowledge?

Understanding your data’s value and being able to communicate that value so that you can offer a clear justification for why and where you want to invest time and resources, gives you a solid foundation on which to build your data strategy.

We often talk about “the data about your data”. Having the information in your hands about how and where data creates value in your organisation, coupled with how mature your data assets are, and what you need to do to make them fit for purpose, gives you the lay of your data landscape, and a map to help you navigate it.

Without this “data about your data”, you can’t approach the management of your data strategically. You can only hope that you’re focused on the right things. But what if you aren’t? Can your organisation afford not to have the data that is needs to be successful?

Take the first big steps toward strategic data asset management

Anmut are the world’s leading experts in data valuation, and we’ve developed an integrated set of products and services that scientifically measure the impact data is having on your organisation. We replace hope, with the knowledge that ensures you are focused on the right data, so you can be confident about where you are allocating capital to improve the return on investment in your data.

Explore our data valuation solution and contact us, if you want to learn more about how we can help you take the right next steps toward managing your data strategically.

Data Valuation resources

£60bn Data Valuation case study
Learn how one Chief Data Officer applied data valuation and data asset management and now delivers £2.70 for every £1 invested in data and has a roadmap to deliver £1.2 billion in savings.
Download
data asset management case study

Data Leadership report: data assets and their (mis)management

86 data leaders. $1 trillion in combined revenues. Find out what they had to say about data assets, how they’re seen, invested in, managed (or not) and what experts say can be done to tackle the challenges.
Download
anmut data leadership report