As the digital age unfolds, managing data is not getting any simpler. On one hand, there is this huge promise around what data and analytics can do for your enterprise, while on the other, there are petabytes of data still ‘unmanaged’ for economic value. As a CEO cognizant of both the cyber risks as well as the potential, you have been used to certain data metrics for managing your enterprise, but perhaps it’s time to rethink your strategy.
This is especially critical if you suspect you have been “collecting metrics for measurement’s sake.” The notion of chasing metrics without looking for evidence that they are actually relevant for you today as well as the foreseeable future might prove to be both inefficient as well as ineffective.
Gartner says there will be more than 20 billion connected devices by 2020. Interestingly, these connected devices will be an important part of your business model and indeed, your business ecosystem over the coming years, if they are not already.
But these connected devices generate more data than most traditional businesses may be prepared to handle. IDC has previously made headlines by predicting that the total amount of digital data created worldwide would mushroom from 4.4 zettabytes in 2013 to 44 zettabytes by 2020. Well, today, IDC believes that by 2025 that total will hit about 180 zettabytes. This is a lot of data, potentially involving important business processes, interactions and events.
“enterprises should develop transparency-creating strategies so that the involved processes and systems in a business model are measured for true relative value.”
Enterprises will need to collect and manage all this data and this could be prohibitively expensive if the relative importance of the involved systems and the involved data remains a ‘mystery’. If the relative importance of data is established, resources can then be apportioned appropriately. A customer-facing system along with customer data is potentially a lot more valuable than systems without it, for example.
Therefore, enterprises should develop ‘transparency’-creating strategies so that the involved processes and systems in a business model are measured for true relative value. Underwriters especially will need this level of transparency to manage cyber risks.
The Data as an Asset (DaaS) Index is an example of a tool that measures the relative importance of data in an enterprise’s business model. CEOs and their teams can use it to accurately allocate proportionate resources for various business outcomes. The DaaS Index has 9 parameters that define the relative importance of data-related assets:
- Shareholder value
- Customer value
- People management
- Demand management
- Data quality
- Data architecture
- Data standards & governance
- Communication plan
- Continuous improvement
While the promise of the emerging digital age is exciting, it would be scary to embark on transformational journeys without a controlled and measured approach. Businesses that manage their constraints best with available technologies and people will win.
It’s no surprise today that 5 out of the top 10 most valuable companies on the 2017 Fortune 500 list are tech companies. These companies are adept at using their available resources, especially data, in the best possible manner.
A rule of thumb for any enterprise is to acknowledge that the most valuable metrics are those that are ‘person-centric’ in nature. Ultimately, the value of any business is dependent on how best it serves the involved people in the business and how much economic value the business creates for the involved persons, starting with the customers, employees and the shareholders.
In the digital age, since data connects the dots between people, processes and technologies, businesses which have the best handle on their data will have an advantage over their competitors. Knowing the relative importance of the data that’s in your business model is a starting point for not just addressing the increasing volumes of data, but also for addressing the big changes in data protection rules.
Consumers have rightly or wrongly trusted businesses to protect their personal data. We share huge amounts of our data with friends, family and businesses, all the while trusting that we are in ‘safe hands’. It is risky to surrender the fate of this data to a business where it’s relative importance is not known.
In Europe, data protection will undergo a significant shake up in May 2018, when the European Union’s General Data Protection Regulation (GDPR) will go into effect.
The legislation will update the 1995 Data Protection Directive—introduced at a time when the digital age was in its infancy—and will impact both citizens and businesses.
The best CEOs will keep their businesses resilient and indeed prepared, by knowing and managing the relative importance of data as a metric.