Return on assets (ROA) is an increasingly popular performance indicator, calculated by dividing net income by a company’s total assets. However, it would be appropriate to include company data in this account, i.e. to consider it an asset in its own right. In fact, when properly managed and optimized, it contributes to the performance of the organization. Therefore, companies have every interest in looking now at the potential and exploitation of their data set.
A paradigm shift is necessary
Data is often referred to as the “new black gold”. The way it is organized and exploited is crucial to the entire information economy. Data management and analysis has become a differentiator for all organizations that want to make smarter decisions, monetize the knowledge they possess through data sharing, or make the best use of third-party data.
Faced with this observation, the traditional use of stock indices return becomes obsolete. A company that has the same physical assets, workforce, product lines, and service model as its competitor will be outperformed by the latter if it uses its data less efficiently. It’s time to look at data as a key element that can be relied upon to generate new opportunities, both internal and external to the company.
Make data a key performance indicator
The continued investment in your data makes it a real asset of great value. Concretely, this involves sorting data to make it clearer, contextualizing it, cleaning it to increase its accuracy, integrating it at the core of operational processes and enriching it with metadata and external data in order to reveal its full potential.
In the digital age, data volumes are a company’s biggest asset. In an environment of economic uncertainty and potential slowdown in spending, it becomes imperative to focus on what already exists and understand how to improve it, rather than incurring speculative spending on new initiatives with hypothetical results. Thus, it is likely that “return of assets on data” will soon replace return on investment, becoming the main measure of companies’ investments in their digital strategy.
Optimize your data to “stay in the race”
Organizations that are able to turn their data into knowledge and make actionable decisions based on it will be rewarded. Their ability to exploit data will become a major selling point in corporate reporting, marketing and public relations, financial communications and discussions with analysts.
Of course, before the return on assets of data becomes a mainstream business language, a framework must be established and objective means must be established to prove the positive use of data, but this is no excuse for delaying this work. Data will soon separate companies into two groups, just as the arrival of e-commerce 20 years ago separated the winners from the losers according to their ability to adapt to this evolution. Is your data ready for this new technology chapter?
Editorial written by David Rosen, Vice President, Platform Marketing at TEPCO
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