By Peter Wilson
May 19, 2021
More than 9 in 10 business leaders say data is critical to business success. But only 1 in 3 manages their data assets with the same discipline as other business assets.
London, UK | Data is poorly understood, inadequately valued and badly managed by global businesses costing them and their investors billions of dollars every year, according to a report published today by Anmut, the data valuation specialists. This is a big problem because it means most businesses are running on data that isn’t fit for purpose.
The Anmut Data Leadership Report compiled data and anecdotal evidence from almost 100 Chief Data Officers from organisations headquartered on five continents whose collective annual revenues total over $1 trillion.
The report finds that 91% of business leaders believe data is critical to the success of their businesses. However, only one in three (34%) of their companies manage their businesses’ data assets with the same disciplines as other business assets. These companies spend their allocated data management budget on creating value from their data that in turn helps them scale their businesses and develop their strategies.
Three quarters of respondents (76%) say their businesses are investing in large-scale data and digital transformation strategies. And, 63% say data is more critical than technology to achieve business transformation. Yet, Anmut’s report also finds that technology investment regularly overshadows data investment. Technology gets three times the attention (73%) and five and a half times (88%) the budget as data. This is in spite of the fact that technology is dependent on reliable data to run well.
Chief Data Officers (CDOs) interviewed for the report regularly cite the challenge to make data something that everyone in their businesses understands, values and knows how to manage. The report finds that one third of company boards (33%) don’t consider data a ‘material asset’. 9 in 10 CDOs (87%) say putting a monetary value on data would enable people within the business to manage that data better.
Heyns adds: “A critical issue for businesses’ data leaders is winning senior buy-in. When the board doesn’t appreciate the value of data to a company’s future performance, it’ll lack investment further down the business. That’s where data valuation comes into play. When the value of data assets are set out in pounds and pence, data can be thought of as a business asset. Then it climbs up the food chain, gets taken more seriously, impacts C-suite decision-making more readily, and receives greater investment. When data is treated like any other asset by assigning a monetary value to it, businesses can make better strategic decisions.”
Anmut, whose clients include Smith & Nephew and Highways England, advises international companies across all sectors on how to manage, measure and value the data within their businesses. Intangible assets make up 90% of the total market value of the world’s largest companies. Anmut’s most conservative estimates put data at 20% to 30% of that. With only a third of companies managing that value well, it’s not a surprise that companies who do manage data well – the FANGS – have become the most valuable companies in history in the shortest time.
In March, the UK’s Department for Digital, Culture, Media & Sport (DCMS) published its report: Increasing Data Access across the UK Economy in which they commit to creating a framework within which the government may have the ability to make interventions into private and third sector organisations to unlock the full value of their data. DCMS follows governments in several leading economies including the US and Germany that are taking the lead to enforce better data management in business.