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In the current information-driven society and increasingly digitalised world, sentiments are shifting from the economics of tangible assets to the economics of information – “infonomics” – and other intangible assets.
Infonomics is the theory, study and discipline of asserting economic significance to information. It strives to apply both economic and asset management principles and practices to the valuation, handling and deployment of information assets.
In the book “Infonomics, How to Monetise, Manage and Measure Information as an Asset for Competitive Advantage,” Douglas Laney, vice-president and distinguished analyst at Gartner, explains how chief data officers (CDOs) and other information and analytics leaders can help their organisations become more info savvy.
“Traditionally, information managers have had a limited view of how they can help business leaders generate value from information, mainly focusing on operational and analytical benefits,” says Laney. “Businesses that measure information’s productive utility can make more intelligent investments in information-related initiatives, among other benefits. Infonomics provides the framework business needs to value information, manage it and measure it as a real asset.”
Monetise: The trend to recognize and take advantage of information’s unique economic characteristics is still in the early adoption phase, and is therefore a competitive differentiator. Organisations broadly monetising their information assets by using them to reinvent, digitalize or eliminate existing business processes, products and services can readily outstrip their rivals. Yet many information and business leaders lack the experience and methods to monetize information in a wide variety of ways, thereby leaving much of it underutilised.
Manage: To date, no widely accepted set of principles and practices exists for managing information as an actual asset. Yet, domains outside of enterprise information management (EIM) and even outside of IT have long benefited from sets of detailed, well-honed asset management methods and standards. Rather than creating information asset management procedures from scratch, data and analytics leaders, including CDOs, should adopt and adapt practicable concepts from these other domains for improved information asset governance, availability and utility.
Measure: Most organisations lack any reliable way to determine the potential and realized value of their information assets — merely because information is not a recognised balance sheet asset. Even so, CIOs, CDOs and even CFOs should adopt information asset valuation methods to justify and prove information-related investments, spur information-based innovation, and foster an information-driven culture. Valuation approaches can include gauging information’s quality characteristics, business relevancy and impact on business functions, along with its cost, market value or impact on expense savings or revenue streams.
“CIOs, CDOs and business executives need to ask themselves how their organization expects to survive, let alone thrive, in the Information Age without treating information as an actual asset,” says Laney.