Page 12 - Finanancial Management_Feb_Apr23

Valuing data is becoming

increasingly practical as

marketplaces emerge
that establish a price for

data that is categorised

and packaged.

geography, which can be used to hone marketing campaigns and
product assortment strategies.
Each of these uses can deliver internal value in the form of
better decision-making, but they also have value as commercial
data products available for sale to others.

The journey to value
There is already an emerging group of technology service
providers, financiers, insurers, advisers, and data asset company
operators willing to partner with CFOs to convert enterprise data
into assets that can be traded and securitised.
This ecosystem can ensure that an organisation’s data is fit
for reuse, can be replicated or combined with other data to create
new data, and can be safely transferred and used by others. These
service providers can also ensure provenance, veracity, and
accuracy; validate aggregation and calculation routines; provide
secure access and governance; and mitigate risk.
The biggest barrier to unlocking the value of data is not
technical. High-profile data breaches, both accidental and
through hacking, have created an atmosphere of fear about the
financial, regulatory, and reputational risks of exposing sensitive
data. For many boards and executive teams this has engendered
a very cautious approach to leveraging the value of data.
Data protection legislation, such as the EU’s GDPR, has further
reduced the appetite to embark upon any data-related activity
that exposes an organisation to risk. Many of these concerns can
be addressed by effective anonymising of data, adopting
advanced cybersecurity protocols, and the judicious use of
insurance and other risk mitigation techniques.
For a CFO, job one remains ensuring the integrity of financial
data, and job two focuses on ensuring that the organisation
extracts maximum internal value from data. However, an
attractive third job is emerging — developing a financial
construct to unlock the future value of an organisation’s data in
the marketplace. Proceed with caution, but don’t discount what
could be a potent new source of tangible financial value. n

David A. J. Axson is a former partner with Accenture,
co-founder of The Hackett Group, and former head of
corporate planning at Bank of America. He currently serves as
part-time CFO of Shrap.co.uk. To comment on this article or to
suggest an idea for another article, contact Oliver Rowe at
Oliver.Rowe@aicpa-cima.com.

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