Skip to 0 minutes and 4 secondsSo the question about monetary value of data is a very interesting one. Because I think the accounting community has not really reflected the role that data plays within our ecosystem today, on the balance sheet. So currently on the balance sheet, there is no place for data to be to be attributed. I mean, there is there's something called intangible assets where you could kind of throw stuff into it. But there, you know, one of the key ones where data usually gets logged under is something called goodwill. But goodwill could represent anything good will could be, 'Oh, you want to buy this from me at this rate? That's fine.'
Skip to 0 minutes and 43 secondsIf you're, you know, that's goodwill, you know, but data gets clubbed into that. So, how is data appreciated and at which point, at which point do you actually value data, becomes very a very important question in the sense that is it it at the point of sale? Because to go back to the goodwill question, then, you know, are you willing to pay however much I tell you that I want for this data? Or how much are you actually willing to pay for that data? So the market kind of dictates. Or are you looking at the value of data from the point of view of an organisation that wants to look at efficiency and efficient processes?
Skip to 1 minute and 19 secondsThat's another angle looking at data. Or are you looking at monetizing data? Which is that even another angle. So there are many dimensions to being able to value data and again, it has to go back to what is the reason? what's the driver behind an organisation wanting to put a value? is to demonstrate the value of a team? Is it to demonstrate the value of an investment? Is to demonstrate the value of, you know, ploughing more money into data activities within an organisation? There's a whole raft of questions that need to be answered, before we even get to valuation methods, accounting versus, you know, some newer forms of valuations that we could kind of look around attributing data to.
Skip to 2 minutes and 4 secondsBut I also think that you cannot think of value, of data without thinking of values of data. I don't think that you could separate these two anymore. I think that customers are becoming far more clued in to what brands represent and what companies represent, that the two cannot be separated anymore.
Skip to 2 minutes and 26 secondsAnd if brands leverage that and have a good understanding about their ethical practices and the values that they represent as a brand, and they're able to transmit this to the customer through the way that they manage their data, or the way that they choose to give the power back to the customer to manage their preferences, and you know, the way that they want their data managed, I think these will be the real winners in the future. So the values conversation could not be taken independently of the value conversation. I think, ultimately the real question is what is the value of values?
Skip to 2 minutes and 57 secondsI guess what data sitting on the balance sheet would achieve is it would definitely get the attention of the board and, you know, C-suite, to have a clear focus on what is this number? What is it doing? Am I doing the right thing about it, or am I not? It becomes, it gives data more of a recognition, of where it needs to be and where it needs to be understood and seen. Because the last thing that an organisation wants to do is have no visibility around the data and just assume that things are flowing within the pipeline's of the company and things are ticking along just fine.
Skip to 3 minutes and 43 secondsWhich means that companies are not really leveraging the full opportunity that they have, or that they could in creating better experiences for their customer. And I think that's a shame really. And that's really the main driver between, behind the value of data campaign that I'm running for for the DMA. Is to give that recognition at the senior level, to encourage investment because once we start investing more in the space, that means that we're creating work. We're creating room for the great talent that we're we're getting out of universities, or not from universities.
Skip to 4 minutes and 18 secondsWe've got great examples, not coming from universities, coming into the industry and giving them a space to be able to leverage their talents and grow, grow the economy and reshape Scottish industry in a really fundamental way.
Data as a different kind of asset
The Data & Marketing Association have an initiative called “Value of Data”. Led by DMA Scotland, this initiative seeks to reshape the understanding of the true worth of information to an organisation. At the core of the initiative is the question:
“If data is now widely understood to be valuable, then why is it still so difficult to attach a value to it?”
To help answer this question, DMA Scotland ran various sessions to explore what would need to happen to put data onto a company’s balance sheet and what impact that might have. You can find more details on the DMA website.
I thought it was really powerful to hear Firas linking value with values (ethics) and how your use of data can impact your brand value.
Regarding the balance sheet, it feels to me that if data was more than just an intangible asset, but instead one with a monetary value, you would see more engagement across all levels within an organisation and more activity to use data to drive better customer outcomes. It is easy to be initially sceptical about whether we could ever find a place on the balance sheet for data. But if you allow yourself to explore the idea, it highlights a few insights based upon the difference between data and other more tangible assets.
Have a look in the ‘See Also” section below for some more content from the DMA on The Value of Data.
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