"What's our data really worth?" your CEO asks you one day.
Maybe he's mulling new sources of revenue. Maybe he's having nightmares about the risks of a data theft, like the one that toppled the Target's CEO (and CIO). Or maybe he's read yet another article about how big data is a potential gold mine and wonders how to get in on that action.
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So how are you going to answer his question?
"Responding with a shrug and a shot in the dark won't exactly enhance your own value in the CEO's eyes," notes Managing Editor Kim S. Nash in our cover story (" CIOs Consider Putting a Price Tag on Data"). "CIOs need to know the value of the 'I' in their title."
This wonderfully comprehensive story was the brainchild of our Executive Editor Mitch Betts, who's been collecting research tidbits on data valuation for years. Recently, he noticed that as the big data buzz got louder, more CIOs began talking about monetizing data as a company asset.
That turns out to be one tough assignment. It stretches beyond the IT department into every nook and cranny of the business. It touches a lot of nerves.
As massive amounts of data are generated by mobile and social technologies, sensors of all kinds and the widespread use of analytics, CIOs are being thrust into the limelight of data-value discussions. Especially in companies hoping to monetize their data by offering new products or services, the IT leadership skill set must broaden to include pricing, sales, packaging and customer service ideas.
Yet while CIOs are often viewed as stewards of corporate data, the real decision-making power regarding those info assets may lie elsewhere. At $6.8 billion American Family Insurance, for example, the head of enterprise data management reports to the chief risk officer, not the CIO. "Who actually uses the data and can make strategic decisions? The business," says this data guru.
"It's frustrating that companies have a better sense of the value of their office furniture than their information assets," says Doug Laney, a Gartner analyst who specializes in information economics--quantifying the value of data. He believes most companies overestimate what their data is worth, and that less than 5 percent can calculate its true value.
So, what's your data really worth? Our story will give you a head start on finding that answer.
Read more about cio role in CIO's CIO Role Drilldown.
This story, "Editor's Letter: Why CIOs Must Own Data Valuation" was originally published by CIO.