By John Mancini, chief evangelist, AIIM
Big Data is only going to get bigger as more information generated. As businesses and individuals generate such large amounts of data — and organizations come to depend on it even more — the business value of information is drawn more sharply into question. Should it have an economic value and, if so, how should it be measured?
Data is growing at an astronomical rate. Around 1.7Mb of new information is created for every human on the planet every second of the day, according to analyst firm IDC. This is being driven by the consumerization of IT, increased mobile and cloud usage, and the arrival of the Internet of Things (IoT).
For example, the Internet of Everything (IoE) —which comprises of the networked connection of people, processes, data and things — will generate 507.5 ZB per year globally, according to Cisco research.
Almost every organization today is digital with the information it holds on customers and potential new business critical to its success. Understanding and managing this information is one of the most critical things needed to retain agility and a competitive edge.
It therefore makes absolute sense information would be assigned a value but, in fact, it does not even appear on the balance sheet.
There is a growing divide between the traditional ways we value organizations in terms of the tangible and intangible assets reported in financial statements and the value the market puts on organizations. How many times, for example, have you looked at an acquisition and thought, “Why did X pay so much to buy Y?”
The problem is that many have blinkers on and completely forget how much a company may have invested in Big Data processes to monetize information. Because data doesn’t have its own line on the balance sheet, we end up ignoring the true value of information.
Organizations pivot around information and I, like many others in the content management community, have been banging the drum for years that information should be valued with the same rigor and discipline as any other business asset.
This has been difficult to put into practice because it can be argued the value of information is to the person who finds it useful. But many in the information management community have been working on the concept of valuing data and the term “infonomics” has emerged. While not yet a mainstream business term, it is used to describe quantifying, managing, and leveraging information as an asset and it could well be set to become a game-changing concept.
A Measurement Model Is Essential
A few months ago, AIIM invited a number of leaders in information management from North America and Europe including Gartner, Shell, and Accenture to discuss information, its necessary promotion to asset status, and the role of infonomics in recognizing and measuring its value.
It was abundantly clear that the investment companies make in information processes designed to protect, use, and create customer value is being systematically undervalued. But there are some challenges in valuing information.
Firstly, how do you measure the value of information you don’t actually control and secondly that it can only be realistically be measured in the way it is being used.
Although accounting and insurance firms largely fail to factor the value of data and information, the industry is quickly realizing the inherent economic value of data and assigning a worth to that is paramount moving forward. Helping to define and measure the value of information will certainly be a priority for AIIM as industry discussion moves up a gear around infonomics, preparing business for a more information intensive future.