Data has been trumpeted as the new gold for the 21st century more times than one could possibly count. And it does bear similarities to its physical cousin. Both are malleable, with the ability to be forged and manipulated into something of tremendous value in the hands of a skilled craftsman or data scientist. Both are also highly reflective; gold is used in the visors of astronaut’s space helmets to reduce glare and heat from the sun, just as data is used to reflect errors in our thinking to reduce possible human biases in our work. Even in its most raw form, gold is prized for its beauty, while data is prized for its simple face-value insights.
However, there is one key difference between gold and data: abundance. Gold is one of the ten rarest elements on the Earth’s crust, with mining consolidated in only a handful of places across the globe. Data, on the other hand, has become so abundant that you wouldn’t even notice it being mined right under your nose.
In recent years, we have witnessed the explosion of data sources; from the smartphones in your pocket to the smallest IoT sensors. With it, the amount of data generated has jumped from 13 Zettabytes in 2013 to 53 ZB in 2019. This abundance of data has created billion-dollar companies in the data economy and created new opportunities for businesses worldwide. However, these eye-popping valuations have also created significant fears of missing out (“FOMO”) for executives looking to leverage their company’s data to gain a competitive edge in the market.
With data usage terms like “artificial intelligence”, “data analytics”, and “automation” being thrown around on an almost daily basis, it is easy to get caught up in what data could do as opposed to what it can do. It is important that executives not get distracted by lofty outcomes of using data but instead understand what data is available to them, what it conveys, and how it can support current business strategies. In
keeping with the gold analogy, an expert goldsmith can only craft the best jewellery if they fundamentally understand the gold nugget in their hand; its properties, limitations, possibilities, and how to manipulate or augment it to fulfil a specific purpose.
Like smithing, there is a process to harness the full potential of data, known as the “data value chain.” It specifies the complete lifecycle of a nugget of data: from data collection to storage, usage and, finally, disposal. All four stages are governed by a robust data centric culture, cybersecurity measures, and regulations, which are changing rapidly across all jurisdictions.
Despite all the hype, we believe there is significant wastage in the market around investing in data-centric projects. In particular, we find many companies are spending significant amounts of capital in the “usage” stage of the data value chain without a firm understanding of what it genuinely means for their business or how it falls within the company’s broader data strategy. In reality, these half-baked data projects create considerable losses in investment or, even worse, fail to meet desired business outcomes. We estimate that more than 95% of companies globally, excluding micro unlisted firms and NGOs, do not have a complete grasp of the data value chain within their organisation, leading to silent but substantial losses.
In our two-part report series, we look to: (1) unpack the data value chain; and (2) showcase what a holistic data strategy project looks like, incorporating both business and technology elements to ensure executives structure data projects around their core business strategy, such that every dollar spent on transformation or optimisation is put to good use. After all, data is – and always will be – the real lingua franca of business.