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What does it mean to "Manage your information and data assets"?
July 2007
Thomas C. Redman PhD
One of the more popular sound bites in data management today is “Manage data and information assets.” It's a catchy phrase and it sounds like a good idea, but what exactly does it mean? And, more importantly, what should organizations do differently? In this article, I intend to answer the first question and suggest a first step for answering the second
In today's organizations, “capital,” in all its various forms, and “people,” including their backs and brains, are generally recognized as assets. Some organizations may recognize customers, their processes, or information technologies as assets as well, but only capital and people are generally recognized as assets. A casual scan also reveals that most organizations manage their capital and people more professionally and aggressively than things they do not recognize as assets. They:
- Take active measures to improve the value of their assets. For example, they invest in hiring the right people, training employees, and succession planning.
- Use (or exploit) their assets within the organization and in their marketplaces. For example, they use people's brainpower to innovate and develop strategies to market and sell their products. And they invest their dollars in plant and equipment to manufacture them economically.
- Adjust their management systems in recognition of the asset's special properties. They put someone in charge (e.g., Chief Financial Officers, Heads of Human Resources) and they recognize (for example) that managing a person and managing a dollar are not the same.
For data and information to rise to the level of capital and people as assets in the eyes of the organization, I believe they must pass three equivalent “tests.”
- Care and Feeding Test. To pass, organizations must acquire the right kinds of high-quality data and information, and their people must be able to find, access, and understand them. Data and information must be of sufficiently high quality that people can trust them and use them with a high-degree of confidence. And they must take reasonable steps to prevent these assets (the data and information) from being lost, stolen, or used in inappropriate ways.
- Unique and Significant Contribution Test. To pass, the organization must manage data and information as part and parcel of its present and future. Data and information must make unique and significant contributions to the day-in, day-out running of the business, to its value proposition, and to the unique selling points of its products and services. Perhaps most significantly, data and information must be at the core of innovation, strategy, and competitive position.
- Special Properties Test. To pass this test, organizations must demonstrate a deep understanding of data and information, their special properties, and adjust their management systems accordingly. Data and information have properties that present both opportunities and perils unlike any other asset. The easiest to see is that they may be shared. Departments compete for the organization's investment dollars and if Operations gets one, then Finance does not. Not so data and information. Operations and Finance can use exactly the same data at exactly the same time without involving the other. The flip side is that it is harder to protect data, as the fifty million lost customer records in 2005 attest.
