When managed properly, high quality data is a valuable asset to your company. Managing your data as an asset is an important way to make sure you’re getting the maximum ROI as you collect, store, analyze, and delete the data your company uses. Part of smart asset management involves evaluating your assets’ “life cycles.” Your data assets’ needs, attributes, and value to your company will all shift as their life cycles progress. Therefore, your data asset valuation needs to take into account the life cycle stages of all your different data assets.
In this discussion of life cycle management for data assets, we will borrow some terms from the vocabulary of human and animal life cycles. For example, the first stage in your data assets’ life cycle, which can look a little different for each asset, may be termed “baby data”. “Baby data” can either be recently collected, in the process of being collected, or not yet collected. Whatever its collection status, all ‘baby data’ shares the common attribute of not having been analyzed yet. This is the phase where your data has the least value to you; the risks and expenses involved with making it useful to your company may well turn out to be greater than the benefits reaped by its eventual analysis.
The value of your data assets is much higher during the next phase in their life cycle. Although the line between “baby data” and “data in the prime of its life” differs between data assets, data is generally at its peak value when it is being used by your company and generating an ROI. It is smarter to make large investments in managing a data asset that is at this phase than in “baby data,” which has not yet proven its value to your company.
For every asset, there comes a time when the costs of managing it exceed the rewards of owning it. Data is no exception–in fact, shifting trends and volatile markets mean that many data assets have a very short span between their status as “baby data” and their status as “derelict data.” Derelict data, simply put, is data that has served its purpose and must be disposed of. For many data assets, disposal is a simple, low-cost matter. For data assets that involve confidential information, however, disposing of derelict data comes with a set of unique costs. These costs should be factored in when assessing the value of “derelict data.”
Accurate valuation of all your assets, including data assets, is important to the financial management of your company. As your assets go through their life cycle phases, their value to your company changes. Being aware of where your data assets are in their life cycles is a key component of accurate data asset valuation.
Data Clairvoyance is here to provide companies with an efficient, fact-based approach to data management in all areas. Please feel free to contact us for more information.