In May 2017, the Economist cited that data had surpassed oil as the world’s most value resource. Indeed, the top 10 companies in the world are now dominated by those who store, transfer, trade and create data as their core business.
As finance professionals, we have many functions and responsibilities within our organisations.
We manage costs, seek to maximise profits, ensure there is internal control and rigour, and provide accurate and timely reporting to ensure the right decisions are being made at the right time.
One of the most important and fundamental roles is to protect and control the company’s assets.
No business would operate without a bank account, and leave cash dotted incoherently across their organisation. They certainly wouldn’t guess how much cash is in their account.
No business would operate without a system and process to manage stock. No warehouse manager would store out of date or volatile and potentially dangerous stock.
No real estate manager would forget where a cluster of buildings was within their company’s portfolio.
Yet, this happens every day, in nearly every small, medium and large entity when it comes to the management of data.
So, if data is the world’s most valuable resource, and therefore, a company’s most valuable asset, then why don’t companies take better care of it?
It’s fair to say that nearly every organisation will typically be unsure:
- How much data they have
- Where it is stored
- What data types they are holding, and whether they are relevant to the organisation
- What the unit cost is
- Where they hold Personally Identifiable Information (the underlying fundamental of the GDPR)
- Who has access to it
- Whether there are duplications
The list goes on, and on.
Next Year’s Problem
The most concerning thing is that this is not a surprise, and most organisations have realised this for quite some time.
But like the junk room in your house, or the shed that needs de-cluttered, this has always been next year’s problem while new, and perhaps more exciting projects, have been favoured.
A common argument has been that data storage is getting cheaper. Yes, it is getting cheaper through technological advancement and the economies of scale of the Cloud, but the rate of data growth far outstrips this reduction in cost.
The issue remains; there is an IT budget shortfall that is getting compounded every year.
Content gets richer, videos are replacing documents, the flow and growth of data is progressing like a runaway train, and because of the pressure on IT budgets, there is no money to solve the problem.
It’s become a Catch 22, while in the meantime, the world’s most valuable resource continues to get more valuable. While the oils reserves will eventually run dry, data will never stop being created!
The “dreaded” GDPR
Yet still, this continued to be next year’s problem, until…GDPR arrived! Those dreaded 4 letters that have caused many sleepless nights amongst the business community!
GDPR meant that the data problem was no longer next year’s problem. It’s today’s problem (as of May-18) and the matter of controlling the data a company holds is now a Boardroom issue.
This wasn’t just due to the risk of huge fines for breaching the regulations, but also the spotlight this now put on the matter for companies.
Some of our earliest customers were retail organisations. With typically high revenues and low margins, the financial risk of a fine (up to 4% of revenue) was potentially catastrophic.
However, they were equally concerned about the impact of a data breach given the low customer loyalty levels and the ability for the customer to cross the road and get largely the same product, at the same price, but with more trust!
And not only is data your greatest asset, it is also your biggest contingent liability.
Whilst the UK had already agreed to adopt the legislation post Brexit, globally it is now recognised as the exemplar for data protection – and it is only a matter of time before it becomes the norm around the world.
Driving Value from Data
But it isn’t all doom and gloom, you’ll be pleased to know – and there is a bright future ahead.
Once data is cleaned, controlled, managed, and put in the right place, Data Analytics can drive great value through the business insights that can be derived from it. Trends, risks, opportunities, forecasts.
Business is really the fundamental process of making decisions and dealing with the consequences.
In the words of Sherlock Holmes, “It is a capital mistake to theorize before one has data.” Therefore, the better the data, the clearer the understanding, and the better the decision.
Or to quote another; Aristotle Onassis, most famous for marrying Jackie Kennedy, and secondly being a successful shipping magnate, “The Secret to business is to know something that nobody else knows.”
If you want to benefit from the opportunities that data analytics can bring to your organisation, then make sure your data is under control.
In other words, take control of your data – so you can take control of your future.