Is “data as corporate asset” the next big thing?
Today’s ChallengeAs more and more companies are transforming to a data-driven business world, the international research firm Gartner predicts that by 2022 companies will be valued mostly on their information portfolios. This development underlines the trend of data moving to the status of a business asset, but where can these be found in the balance sheet of a company? 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.
Our VisionWe at Tributech believe that the true value of a company should be reflected in a corporation’s balance sheet and as there is an increase in the relevance of data for business success it has to find its way for being represented in the balance sheets. Additionally, through an activation, it is more likely that it gets the management attention it deserves and needs for being used as true corporate asset fueling the future success of the company. This can help to reduce the huge gap, especially with technology companies, between the current market cap and the book value and also help optimize goodwill in M&A transactions.
Introducing Data Asset ManagementWhen 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 organization’s value chains, financial reportings or asset management divisions for physical assets, are there similar accounting and asset management practices implemented for their “information assets”? 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. With an active data asset management, the decision-makers of a company can identify
- relevant data for supporting the execution of the company’s strategy
- data sources from other companies that can add additional value to the company
- new business opportunities for the company based on analyzing data or
- data that can deliver additional value for other companies and therefore can be monetized by selling it
Enabling new business opportunitiesSummarized the cross-company view and management of data can enable the following business opportunities:
- Introduce new data-driven services: Offer new services (e.g. predictive maintenance) by also considering data sovereignty of customers
- Share & license technology or IP: Transfer knowledge & technology to partners by having auditability of proper use
- Add revenue streams by monetizing data: Share auditable data with partners or on data markets to create new revenue streams
- Drive innovation in AI: Setup and participate in data pools without the trade-off of central storing or routing
- Use auditable data as a basis for agreements: auditable usage data as trusted basis for business & legal agreements
- Enhance traceability within supply chains: Increase traceability within global supply chains even across processes, systems, and companies
Qualifying as Business AssetFor upgrading data to business assets, it is necessary to define what qualifies data as assets and how it can be uniquely linked to a company and made sure that it is tamper-proof. We propose 3 key requirements for data as a necessary foundation to qualify as a business asset and therefore can be capitalized on companies balance sheets:
- Auditable origin: Data collected by IT systems need to be auditable to verify its origin and uniqueness.
- End-to-end integrity check: Need for data integrity checks across systems starting at the data source to monitor for unauthorized changes.
- Data ownership: Data from 3rd parties needs to be synchronized, based on a sharing agreement to document ownership and permission to use.
Enabling Technology by TributechTributech offers the technology for your company to secure and share data cross-company or cross-process in a selective, tamperproof way while maintaining data sovereignty. This data could be IoT, process or business data as well as documents. Businesses can therefore rely on the data source and its integrity – especially when the data is transferred cross-company. Tributech’s technology adds the following features to the IT infrastructure of companies:
- Peer-to-peer data sharing functionalities between companies – without central storing or routing for high data security and privacy
- Event-based and contract-based data access management that ensures data sovereignty and traceability of exchanged data for all involved parties
- Cryptographic proofs of data, created at the data source, are securely and tamper-proof stored in a distributed ledger for guaranteeing cross-system and cross-company auditability of data origin and integrity
Curious? Talk to us!
The rising amount of collected IoT data, the trend towards data-based decision-making and new data services increase the risk of being vulnerable to manipulation. Therefore, companies should implement countermeasures to prevent IoT data form being tampered and build their data services and IoT platform on a trustable foundation.
Nothing new came forth but it would have enhanced prior knowledge if considered before.
A few weeks after the outbreak of the covid-19 pandemic, it makes sense to draw a first conclusion of what we’ve seen and heard from industry players and we tried to summarize some of our core findings.
Alexander Sztatecsny, who has been working in different areas of Digitalization across the value chain for most of his business life, has recently joined the team of Tributech as COO and Managing Partner and will work with the team to elevate the business to the next level.