Whilst, as demonstrated above, data is recognised as contributing to business value, it is currently viewed as an intangible asset and under existing accounting rules, cannot be listed within a business’s balance sheet.
However, companies currently demonstrating data-driven strategies are securing valuations well above standard market value. Just look at the likes of Apple, Amazon, Alphabet, Microsoft and Facebook, now all in the top 10 biggest companies in the world by market capitalization and all within the data technology arena.
Research firm Gartner predicts that by 2022, companies will be formally valued on their information portfolios. Douglas Laney, Gartner VP and analyst further states “Anyone properly valuing a business in today’s increasingly digital world must make note of its data and analytics capabilities, including the volume, variety and quality of its information assets.”
But with no current standardised approach available within the business valuation industry how do you evaluate the value of your existing and potential business data assets?
Asha Saxena published an informative blog post last year on this very subject, referencing several approaches to data valuation. Certainly, worth a read!
One key point observed is that unlike other tangible assets that decrease in value over time, data moves in the opposite direction and with more use becomes more valuable.
So how can any business in today’s data-centric world continue to ignore this unique opportunity to build their company’s worth?