Pity the data rich, they haven’t a clue
1 July 2021 | 0
Speaking to journalists before HPE’s recent Discover event, CEO Antonio Neri (pictured) told them that data was being generated “at an amazing pace and that pace is unstoppable”.
According to a report in MicroScope, he also argued the world was moving on from “the information era” to “the age of insight”. For those of you who may be unaware that you are currently living through this shift or even that you have been residing in the information era, Neri defined it as a time when customers were data rich.
I like that phrase ‘data rich’ because it brings to mind another phrase we often use when talking about someone with a lot of monetary wealth: “He’s got so much money he doesn’t know what to do with it.”
It’s apt in this case because that’s pretty much what Neri means too, essentially stating that businesses have gained a lot of data but they’re struggling to use it. That’s why they are ‘insight poor’.
The good news is that IT companies like HPE are coming along just in time to help businesses improve their insights into the huge levels of data that manufacturers like HPE helped them generate in the first place which they haven’t been able to use properly.
The impressive news is that all this will happen while the data which has made organisations rich but poor at the same time continues to be generated at the aforementioned “unstoppable” pace.
If you’re talking about gaining insights from data, the suspicion has to be that chunks of the data that companies hold are close to worthless. Otherwise, if all the data was valuable why would they need to look for the good stuff to get the insights that would make their business better?
This is intriguing because of what it says about a relatively common assumption that the data held by an organisation could well be recognised as an asset on the balance sheet in the future in the same way as land, inventory, cash or equipment is today.
Neri also subscribes to this view, claiming that data “is now our most valuable asset” and will one day “show up as an asset on your balance sheet”.
It may well do but I’m not entirely convinced yet. For example, if data is being generated at an “amazing” and “unstoppable” pace, that suggests it is being created much more quickly than any other part of a company’s business. If you make that data an asset on your balance sheet, isn’t there a real likelihood it could soon become the largest asset you own purely because it is growing so fast?
Balance in all things
Secondly, how do you assign a realistic value to that asset on your balance sheet? There might be general agreement on the value of some data but disagreement over how valuable or not other data is. Sifting the data to be able to assign a true value to the data you own based on its usefulness rather than the volume you store could be tricky. How do you arrive at a calculation of the value of the data you own so that you can recognise it on your balance sheet and everyone will trust the value you have assigned to it?
Do you only recognise data that you have gained insights from? How do you prove the value of those insights to your balance sheet?
I guess there are people much cleverer than me who have already thrashed out many of these issues. Let’s hope so. But doesn’t it worry you that it’s taken so long to get from the information era to the insight era and it might have been better to be more selective about the data we generated and collected in the former rather than reaching the stage of trying to extract value mow that the pace of data generation has become unstoppable?
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