Physical Asset Management vs. Data Management
With the growing significance of data as a key component of doing business, organizations are treating data more and more like an asset. Although organizations realize that data holds value, no formal or agreed-upon approach currently exists for data valuation. Thought leaders in the data space have proposed several different approaches to data valuation. They include traditional asset valuation concepts based on cost (e.g., the cost of third-party data), fair market value (i.e., the amount an entity is willing to pay for data or an organization that brings with it access to data), and future revenue (e.g., insight into ongoing consumer behavior through data). More indirect approaches to data valuation highlight risk and cost associated with lack of data quality and data management. These approaches express the value of data in terms of costs incurred when an organization is unable to comply with regulations or adapt to changing demand, due to the poor quality of data and data management.