Making people and ideas findable
Information Assets Aren’t on the Balance Sheet
I’m talking as much about a company’s customer lists, vendor databases, and the knowledge bases as I am about proprietary product and pricing information.
Yet many companies are bought and sold based on their client lists. And we’ve all read about the high percentage of companies that close their doors when a disaster strikes and causes massive data loss. How is this critical data monetized?
Replies to This Discussion
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Permalink Reply by Bob Hettel on -
Hi Doug, this is an interesting issue. My father inlaw had a company that was growing quickly not necessarily in terms of revunue but in terms of customers. They knew that the customer base was more valuable then the revenue they generated and they eventually sold the company based on that base.
I've seen similar deals in the cable and ISP arenas - where people are basically buying up the competition not based on the revenue or business but for the base of customers. I've seen different industries use differnt valuations but I've never seen anything that was formula driven or based on any GAAP's.
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Permalink Reply by Matt Theobald on -
This is a problem ISEN is working on. Monetizing/Commiditizing data sets.
More will be revealed once we are operational. Some information now on the isen.org and blog.isen.org
There are many ways data can be measured for value, most ly on how it is used (i.e. analytics)
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Permalink Reply by Brandon Corbin on -
It is in my humble experience, the key is making the business model - data centric. Meaning, everything we do has to utilize our core data assets including every product and service. And if for some reason, product A or service B do not serve the master technology, they should quickly be removed.. Once the data becomes the "core" of the business, evaluating its worth is fairly straight forward. The fun and hard part is wrapping your business around the technology!
For example X per Y generates Z in revenue, following by showing how you can scale the X or Y by creative marketing and sales distributions strategies...
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Permalink Reply by Erik Deckers on -
I guess the reason is that it's hard to quantify how much data is worth. Sure, you can sell it, but you're only selling access. Could it be that the reason it doesn't have value is because it can't be insured? Or can it? How would you go about determining its insurance value? Is it worth the overall value of the company? Is it worth only the cost of the storage device it's on? Or are people overpaying for a company's information because we've been swindled into thinking it has a lot more value than it's worth?
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Permalink Reply by Matt Theobald on
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Not just insurance, Erik. There are entire companies that do nothing but sell information EBSCO, Lexis-Nexis, etc...
A database can be evaluated by the cost in developing and collecting not only the data, but building the resource, staffing the resource and related upkeep issues. This doesn't even include the impact the data has on the market as a fee or free resource. Just the cost in bringing in it to the Internet and keeping it there. Librarians like me are pretty good at determining the value of a resource to its audience. This is is the analytics piece of puzzle of how to commoditize/monetize data. Then there is advertising which is the vast Google's and search market's model. But that's shallow and can be abused (aka Click Fraud) More to come as ISEN comes out from behind the scenes.
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Permalink Reply by Scott Abel on -
I agree with you, but I'll raise you $10 and another questions. Why is it that most organizations don't value the content they create enough to track, manage, and work to improve it?
Sales materials, documentation, training, marketing collateral....all of the words, photos, graphics, charts, tables, video and audio files a company produces are business assets, and yet most organizations have no idea what this stuff costs to produce. Nor are they aware that they can and should be managing efficiently the entire content lifecycle -- the creation, editing, approval, management, translation, delivery, retirement and destruction of these information assets.
It's not the paper or the web pages were' talking about. It's all of the components of information that make up each product (brochures, websites, catalogs, annual reports, RFPs, user manuals, online help and knowledge center content) that needs to be accounted for -- and documented in the balance sheet.
This is changing, albeit slowly. The smart organizations are shaving millions of wasted dollars by analyzing their content lifecycles and streamlining content creation, management, and delivery tasks, automating previously manual (and inefficient) tasks such as formatting and quality control, and using component content management systems to keep everyone and everything in order. One day, everyone will see the value, until then, my job is to keep trying to show them why they need to think differently.
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Permalink Reply by Matt Theobald on
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Just a plug for the Library + Information Science mindset. We run the full cycle from creation to destruction. But few metrics are in place to make the business argument, which the skillset (whether you are a librarian or not) is undervalued and under-budgeted. Trying to get people to document what they do, let along set standards for how they organize things for sharing has only crept up and been dismissed as knowledge management malarchy. Maybe this is changing, and some software is getting better at this. But the root of it is culture. Most want to reinvent the wheel most of the time.
I'm fairly certain the Internet has allowed this to happen with much less frequency over the years, but it is only the tip of the iceberg. I think it will take a generational change. Keep up the good fight!
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