November 21, 2023 Industry Playbook: Treat Data as a Valuable Asset

Businesses that want to be on the forefront of artificial intelligence and machine learning need to prioritize data.

By Dave DuVarney, Principal, Baker Tilly Digital – Data Solutions

It’s clear that there’s intrinsic value in a company’s data. But are most industry executives treating it that way?

Whether they are brick and mortar manufacturers or virtual tech companies, businesses that want to be on the forefront of artificial intelligence and machine learning need to prioritize data and treat it as an asset. One way to help industry leaders think this way is by using an example they understand, and comparing data to more traditional, tangible assets.

The Rise of Data Analytics

In the last 50 years, corporate America has seen an evolution in how data is used. In the 1970s, most of the publicly traded corporations in the U.S. were industrial and manufacturing companies in sectors like steel, automotive and heavy machinery, and companies in the energy sector like oil and gas. Since the early 2000s, Information Technology has risen in prominence with more than 70 IT companies being added to the S&P 500 in the last two decades alone. Along the way, the advent of the iPhone in 2007 accelerated the importance of data with applications that collect individual user preferences. Today, although invisible, data fuels our purchasing decisions, what we see online, with curated, customized user preferences. And now, we see tech companies like Amazon, Alphabet Inc., Apple, and Microsoft dominating the S&P 500. What’s the commonality of these newer companies on the list? Data is their most valuable asset.

How to get industry leaders to consider data an asset

Admittedly, some leaders may find it difficult to conceptualize data as an asset when it’s intangible. For many people, it’s simply easier to understand something physical that you can see or feel. Yet, when data is the lifeblood of a company, businesses have no choice than to treat it as an asset. For some companies, data may not be their main product, but robust data infrastructures underlie daily operations and activities, ranging from tight production inventories to sophisticated, targeted sales and marketing techniques.

As such, I recommend businesses reframe their data paradigm, and treat data with the same considerations as physical assets. Like a traditional manufacturing firm, this means inventorying the product, ensuring quality and accountability, and protecting your assets.

Inventory Your Data

When companies inventory their tangible assets at a manufacturing plant, they know where every piece of equipment is, they know where every bin is on the floor, and they know how many parts are in each bin. Data should be handled the same way; businesses should know what kind of data they have, what the data represents, and in what amounts or categorical units the data is available. This requires tight accountability and objective analysis.

Maintain Your Data  

Successful manufacturing firms maintain their equipment. They make sure it’s in good running order so they can continue to produce good quality products. The equipment isn’t allowed to rust, and innovations are implemented to improve efficiency. On the data side, we can equate this to ensuring good data quality. Businesses need to ensure that the data that’s being input into their systems is of the best quality. Data can’t be missing values, and it needs to accurately represent the variables it’s measuring and interpreting.

People also need to be held responsible for managing assets. Manufacturers have product line managers and quality assurance leads who have the responsibility for certain parts of that company’s equipment and products. Similarly, businesses need to ensure their data is of the highest quality, which means implementing a data governance plan under the leadership of a chief data and analytics officer. 

Protecting Your Assets

Another parallel between a traditional manufacturing firm and data-driven firm is security. If a company has physical assets, it will protect them by making them inaccessible to outsiders. This may be in the form of securing buildings, locking up raw materials, and limiting access to products. Like tangible assets, data also needs to be secured. A robust cybersecurity program is the cornerstone of data governance, and a necessity to prevent crippling cyberattacks.

A final area for businesses to consider is the employees themselves, and what they value. This means nurturing a data-driven culture with all stakeholders, emphasizing data’s role as a key investment that drives new growth, efficiency, resilience, and innovation. Business leaders need to be proactive in driving this awareness, emphasizing the understanding and usage of data and analytics across their organization. When stakeholders understand how data relates to the bottom-line or mission, they are more likely to embrace a data-driven culture.

In today’s digital landscape, where tech giants reign supreme and data shapes our very decisions, it’s imperative for industry leaders to recognize the invaluable role data plays. Just as a manufacturing firm safeguards its physical assets, so must they fortify their data repositories, embracing a data-first culture to fuel innovation, enhance quality and secure their digital future.

In this digital age, data isn’t merely information, it’s the lifeline of progress and the key to staying ahead in a world increasingly defined by AI and ML.

About the Author:
Dave is a leader in Baker Tilly Digital’s applications, cloud and data practice and leads the firm’s chief data and analytics officer (CDAO) advisory services. He is passionate about helping businesses drive sustainable growth through digital transformation and data analytics solutions.

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