It’s the data economy, stupid!
Data as the #1 business asset of the future.
In the last few years a new commodity has entered the business playground – data has become one of the most important assets for some companies. Facebook, for example, is one of these companies that understands the value of data as a valuable asset, which is one of the reasons of their high growth perspectives and current market valuation.
But it is not limited to Silicon Valley companies to derive business value of data. Other companies in different industries are also beginning to see data as the foundation for future growth by gaining deeper insight, using it to predict customer behaviour or creating novel services and business models. This trend is the reason why the research firm “Gartner” predicts that by 2022 companies will be valued mostly on their information portfolios.
In this blog post we as Tributech want to provide some food for thought about what’s necessary to transform data into valuable business assets and to become part of the data economy:
1.) When data access matters
Whether you see data as the connector of businesses, as the lifeblood of global value chains or as the key to customer experience improvement and customer service it’s not just about the data itself, it’s also about getting access to it. For example, accessing different data pools within your organization or getting selected data from your suppliers, customers or partners. This broader access to data can be used for increasing traceability within value chains, build new business models (e.g. pay-per-use), offer data-driven services (e.g. predictive maintenance) or to simply get access to the right information that enables you to make better decisions than “the others”. However, if data will be seen as a valuable asset, companies will be highly restrictive when it comes down to accessing their data. Then it has to be linked to specific business requirements (e.g. providing additional services or guarantees) and become transparent for all involved parties. Therefore, it is necessary to establish a standardized data sharing possibility for selective and transparent access control without central storing or routing.
2.) Auditability provides a trusted basis
From a quality management perspective, it is a common sense in the “physical world” to verify obtained commodities or products if they meet the requirements placed on them. But how can this be handled in the “digital world” where the delivered commodity is data? For data, which is provided by 3rd parties, so far no solutions are available to guarantee the data’s truthfulness. These companies need to rely on their data suppliers and their systems and impose a potential risk for every data-based decision. Transforming data into a business asset requires new standards for risk & quality management, compliance and security by offering business partners the possibility to verify and audit shared data assets.
3.) The accounting perspective
How many companies are listing their data as tangible corporate asset on their balance sheet? Current GAAP and IFRS accounting standards do not permit data (intangible assets) to be capitalized on the balance sheet, which currently can lead to considerable differences between the book value and market value of a company. We at Tributech believe that it is necessary in the mid-term that this needs to change, because the true value of a company should be reflected in the balance sheet and the past showed that there is a huge gap, especially for technology companies, between the current market cap and the book value.
4.) Putting data on the relevant table
When asking CIOs or IT leaders what is the most important asset of their company, they will most likely say, “data”. But is it really managed and treated within the company as an asset?
For example, if you take a look at your organizations value chain, financial reporting or asset management divisions for physical assets, are there similar accounting and asset management practices in place for your “information assets”? If data is seen as relevant corporate asset within a company, it should then get where it belongs – in the boardroom. Companies, who want to truly change to a more data-driven business, need to see data asset management as a cross-sectional topic starting with strategy development, sales, marketing, IT, governance and accounting.
Data economy is on the rise and will jumble the old business landscape. It can already be seen on the list of the most valuable global companies where most of them focus on gaining business value out of data.
Nevertheless, this shift can also be seen as possibility to leapfrog within the own industry by being a first mover in transforming data into business assets. With our proposed view points we hope to provide some new thoughts to this discussion. We can help you transform your data into digital assets. If you want to know more about feel free to contact us.
Curious? Talk to us!
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Digital twins are one of the most important inventions of recent years – The digital twin is a virtual model of a process, a product or a service. Read more
Data sharing is fully in line with the trend. The concept is simple: two or more business partners exchange data with each other to ensure an optimized and flexible joint workflow.