It used to be that technology and data officers gave CEOs historical data so they could spot trends. That's not good enough now, says Paul Ballew, global chief data and analytic officer at Dun and Bradstreet. "This phase requires us to talk about business outcomes [from data]. If you can't do that, you are a cost center."
Top executives across industries, though, typically overestimate how much and how well they measure the value of their data, says Gartner's Laney. About one-quarter of 410 senior leaders surveyed recently by Gartner say their organizations quantify the value of their information assets as precisely as if they were on a balance sheet.
One-third say they measure the benefits that each type of information generates, and nearly one-quarter say their information assets are well cataloged and defined. But, Laney says, that's "an acute disconnect from reality."
He estimates that less than 5 percent of organizations calculate the value of their data, measure its benefits, or properly inventory their information, based on client interviews and his ongoing research. But the valuation itself may not be as important as tracking how it changes over time, Laney says. You want to keep increasing the value of your data, so you must know how much it was worth at the start. Then continuously assess your most important data to see how accurate, fresh, unique, complete and relevant it is, he says, to recalculate the data's value.
If CIOs can't or won't expend the energy, someone else will. Namely, chief data officers and other executives responsible specifically for data strategy. Years ago, a CDO, if you had one, reported to IT. Now they may belong to the COO, CFO or another non-IT leader, says Aditya Kongara, head of enterprise data management at the $6.8 billion American Family Insurance.
Kongara has worked in data management for 13 years, including in senior roles at Capital One and Discover Financial Services. Early in his career, he reported to IT. Now he reports to the chief risk officer.
"I'm not really sure the CIO can be a new-business or revenue generator," he says. "IT is a steward of data—integrates, stores, manages security. But who actually uses the data and can make strategic decisions? The business."
Some data experts say it's possible to be exact when evaluating the value of a piece of data and they get frustrated when others disagree. In many circumstances, data does indeed hold an inherent value. Companies buy and sell demographics, psychographics, records of shoppers' purchases, health reports, online browsing histories—all kinds of data about individuals and groups. For example, $75.95 will get you a list of 4 million email addresses.
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