Your information assets are one of the most valuable assets your business has – second only to your people. Today, global accounting practises do not enable the value of those assets to be represented on the balance sheet, despite the fact that information clearly has a financial value. This is going to change – in the not too distant future, you will be able to recognise the monetary value of your information assets as part of your company valuation. So are you ready for that?
The value of information is far deeper than being able to assign a dollar figure to it. Value is influenced by many factors – so many that “Infonomics” is the discipline that is being created to help us apply methodologies to this challenge. Doug Laney became established as one of the world leaders in Infonomics with the publication of his book in 2018. Infonomics discusses the management, measurement and monetization of information. It’s a “must read” book for anyone involved with data & information – and that is everyone!
So how do you measure the value of information? There are a number of methodologies out there – Doug introduces 6 of them in his book, which can of course be combined to create an infinite number of ways of thinking about your information depending on what you are trying to achieve as a business. Information value is understood by considering these information characteristics:
Considering which of these characteristics are relevant to you and your information, then scoring them is a great way to get started. We’ve built that capability directly into LINQ which allows you to add that score to the information assets you rely on to deliver business value and see the impact of that on all of the data, information, people, systems and processes required to create that asset and deliver that business outcome. This support article describes the LINQ valuation methodology and how it creates a value score for your entire business.
Value is however, only one half of the ledger. The other side of the equation is the liability that information creates within your organisation. The process of understanding the liabilities created and how that can impact the information’s value and thereby the value of your business will also contribute to the overall information value.
Business value will be impacted if these risks are not avoided, transferred, mitigated or accepted; just as for any other identified business risk. This level of understanding can help us further protect information by enabling effective information governance. These liabilities should be built into the overall information value assessment, sitting alongside the value characteristics outlined above.
The connection from information value to the value of your people, systems and processes creates a powerful model of your organisation – a Digital Twin – which can be used to prioritise your change and transformation programme. Simply put, you fix the challenges identified in the most valuable areas of your business first. Ensuring that your highest value information assets are;
- created quickly,
- to a high quality,
- made accessible in a timely manner,
- protected from attack,
- managed effectively,
- provide a competitive advantage through its uniqueness,
- meet customers expectations and
- preserves your reputation
will ensure that business value is protected, or created, or increased, through the well established monetization of your information assets.
Thanks to Doug Laney for his contribution to this post.
If you’re ready to model your information value, you can sign up to a 30-day Free Trial of LINQ below. We’ll be in touch with you to help out and share some of the successful stories from our work with our customers.