Do you know how much your data is worth?
Do you know how much your business should spend on security to protect its big data?
We’re creating more data in a few days than in the whole of human history, but do we really know how much it’s worth?
A recent report revealed that 90 per cent of data existing in the world was created in the last two years. Much of that data is being generated by companies that don’t really know how much it’s worth.
Take a company like Facebook, for example. It’s currently valued at about US$200 billion. Some of that value is in its IP and bricks and mortar, but most of it is the data the company holds on its nearly 1.5 billion monthly users.
Competitive advantage or mountain not worth climbing?
For many businesses, big data can seem ubiquitous and overwhelming. Even beyond the sheer numbers involved, knowing what data is and isn’t useful is not an easy task without the right systems and processes.
While this could be viewed as a mountain not worth climbing, effectively managing and valuing your big data can provide a substantial competitive advantage. Even if there’s not a potential wider business use, if you don’t know how much your data is worth then you don’t know how much you should be spending to keep it secure.
Infonomics a new paradigm
If you’ve never thought about this before, you’re not alone. The science of valuing data is so new that Gartner research VP Doug Laney coined a term for it: infonomics, or the economics of information.
While some organisations will prefer to just value their data in relative terms, like how accurate it is and how useful it is in relation to the business’s goals, others may opt to use the financial models Laney developed based on standard accounting practice for valuing assets.
The intrinsic value of an information model doesn’t consider the business value at all, instead putting the focus on data quality. How accurate, complete, timely and accessible is the data? How unique is the data to your organisation – do you have market data not available to your competitors?
Different companies will use a variety of characteristics, each weighted differently, to come up with an overall score.
Alternatively, an organisation may choose to value the information by measuring the data characteristics in relation to business processes. The performance value of information is more of an empirical metric as it measures what impact data has on KPIs over time.
For example, would your salespeople be able to close deals more quickly if they had accurate, real-time stock data? If you can’t answer this question now, Laney suggests an experiment – where one of your sales teams has access to this data and another doesn’t – to see if the performance of the teams is different.
In recent years, whether through online or offline attacks, many organisations have had to recover from a complete loss of data. As part of that process, they’ve needed to answer the question: “How much is our data worth?”
Based on standard accounting principles, a method was developed to quantify the information’s value based on its replacement cost. How much revenue was lost from the destruction of the data and how much would it cost to reacquire it from scratch?
The economic value of the information model refines the performance value model by using revenue instead of a given KPI. Again, using the sales example, an experimental group has access to real-time stock data and a control group doesn’t. Then, instead of looking at how quickly sales are closed, you’re looking at how much revenue the salespeople in each group generate minus the cost to acquire and administer the data.
The final model is based on the market value of your data. How much revenue would your data generate if it was sold, rented or bartered? While open markets for data aren’t very common – legal ones, that is – what your data would fetch on the open market can be estimated by comparing it to similar data from syndicated providers.
Insight as valuable as data
Valuing your data using any of these methods will be a painstaking process, but the insights gained may be almost as valuable as your data. You may find that your data is more valuable than you thought it was and you’re not spending enough to protect it as a result. Alternatively, you may have some expensively protected data that is not really worth that much.
Whatever the result, you won’t know without going through the process of determining how much your data is worth.
For more insights into where ICT and business is going in 2020, download our free white paper.
Dr. Hugh Bradlow, Australian Academy of Technology and Engineering, shares his insights on the growing cybersecurity war, and how to manage risks and resilience in a world of unknowns.
Data science can give you the insights you need to create new services and transform your business. But, if you don’t understand your data, you risk making bad business decisions or worse, automating them for years to come. Here’s a few things you should know to get started.
To date, the average total cost of a data breach is approximately AUS$2.51 million. That's bad news. And it gets worse: Australia ranks fourth among the 10 countries most affected by data breaches. Be proactive and avoid these common data leaks.
With cyber crime on the rise in Australia, it’s becoming more important than ever to protect your business with cyber security training. We look at how your employees are your best weapon against cyber attacks.
In this digital world, data management is a significant responsibility and a data breach is an equally significant risk. Should things go wrong, businesses must take steps to minimise the impact. With the changes to the Privacy Act coming into effect this week, Andrew Giles, Head of Public Relations and Communications for Canon Australia, shares insights on how to preserve trust and maintain strong customer relationships.
If you're on the Internet, you face security risks. You can no longer afford to assume that your business won't be a target because you're not big enough. Here are some big business takeaways that can substantially benefit your business' security.
Ever heard of blockchain? Best known as the technology that enables controversial cryptocurrency Bitcoin, blockchain could be one of the most significant IT developments of our time.
After years of hype, artificial intelligence is ready to disrupt the workforce – and it’s time for executives across industries to pay attention.
Discover how small businesses are using insights gleaned from data mining to rethink operations, offerings and outlooks.
E-waste is one of the fastest growing components of the waste stream. Discover why your company needs to consider enforcing take-back or recycling policies.
Discover how IT experts are solving the issue of finite IP addresses with IPv6.
Email our customer support teamSend an enquiry
For customer service and sales enquiries just give us a call from within Australia
(8am to 5pm, Monday - Friday)