This phrase is regularly thrown around but most organisations are not connecting the dots, failing to see their data as a tangible asset in order to help their digital transformation efforts succeed.
While businesses are happy to make investments in their underlying technology to become more data-driven, they could fail to realise an ROI because their data assets are poorly managed. It’s a little like investing in an F1 car and putting in the wrong fuel.
The result? Your data isn’t fit for purpose. Your digital transformation initiatives fail.
The answer? You need to regard your data as a specific asset. Something businesses are already exceptionally adept at, it just appears that when it comes to data, many have lost their way.
Let’s explain what we mean here. A data asset mindset means putting a monetary value on your data and managing it like a business asset. By changing your perspective, your business can better manage its data.
In other words, by viewing your data as a corporate currency, by treating data as an asset, you’ll actually unlock real value from it.
Chief Data Officers (CDOs) are already aware of this issue. Our 2020 Data Leadership Report reveals that 87% of data leaders think viewing data as an asset means it can be measured, incentivised, prioritised and analysed across the business.
In other words, CDOs and other data-savvy leaders understand that to get your digital transformation efforts over the finish line, it takes more than an investment in your technology alone.
As we said, it’s like investing in an F1 car and putting in the wrong fuel. You won’t even get off the starting line unless you start to prioritise the fuel (aka data) driving your digital change initiatives and optimise it for success.
Yet, most organisations invest heavily in the technology infrastructure surrounding their data, instead of prioritising investments in their data. Yet, what is digital transformation for if not to become data-driven?
Our research also shows that technology receives 88% of the budget but the data only receives 12%. However, data causes 80% of business challenges, compared to just 20% for technology.
So, how can you treat data as an asset?
First, let’s just clarify what a data asset is not. This does not mean transforming your data into a series of data sets, which represent a collection of related information, composed of separate elements that can be manipulated. It is not a digital asset, which represents anything that exists in a digital format. Likewise, it is not an information asset, which is a body of knowledge organised and managed as a single entity.
To treat your data as an asset, you must view it as a standalone resource – and one that requires your attention.
This is part of the work we do at Anmut. We put a monetary value on your data based on the contribution it makes to your value-creating activities.
These numbers give people the language they need to think about data as a strategic asset and compare investments in a way they’re comfortable with.
This removes a lot of the confusion around data, helping your board members to understand what data is and how it works. With clear values on your data assets, they form a portfolio of assets, each with different values. Which then gives you a digital strategy framework, so you can focus transformation efforts. You can present your data investments as a choice, with clear examples of how high-quality data can help you realise high returns of investment – and how low-quality data can have disastrous consequences for your business.
This is an important point for today’s digital transformation initiatives – and their success.
How data assets help digital initiatives succeed
The Annual Global CEO Survey from PwC reveals that, despite investment in data, the majority of CEOs do not think the “comprehensiveness” of their data has improved in the last 10 years, where comprehensiveness is essentially the quality of data across the business to aid specific processes.
This has a direct impact on the success of your digital transformation efforts. Further research reveals that 85% of businesses fail to effectively leverage their data to power these initiatives.
Another survey from Experian found 68% of businesses are impacted by poor data quality during these transformation initiatives, where duplicate data and mismanagement are key challenges.
This has a knock-on effect. According to Gartner, “the average financial impact of poor data quality on organisations is $9.7 million per year.” IBM also discovered that organisations in the US lose $3.1 trillion every year due to poor data quality.
That’s not all. Poor data quality leads to operational inefficiencies, security and compliance risks, a poor customer experience and loss of brand reputation.
Why data assets matter
The concept of data assets bridges the gap between the complexity of the data and the business, making it easier to tackle both problems.
When data is seen as a specific asset, this changes the CDO from someone who makes data better to someone who makes the business better through data.
For your business, this means everyone can understand your data, value it and manage it.
You’ll be one of the few organisations that actually treat its data as the new corporate currency, giving you a competitive advantage.
At Anmut, we’re a consultancy that turns your data into an asset. Our approach is underpinned by an unwavering focus on how your organisation creates value and the role of data in that.
We don’t work with your data, we work on your data and the ecosystem around it. If you’d like to find out more, click here to read more about how to make your data an asset.