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Does data have an inherent value?

by Scott Priest, Editorial Director

March 31, 2011

That's the question Forrester's Rob Karel raises in his blog post, "Stop Trying To Put A Monetary Value On Data – It’s The Wrong Path." I'll let you guess what his answer is.

The “data is an asset” rhetoric doesn’t translate to putting a monetary value on a customer record, as an example, because data in and of itself has no value! The only value data/information has to offer — and the reason I do still consider it an “asset” at all — is in the context of the business processes, decisions, customer experiences, and competitive differentiators it can enable. 

For example, a customer record doesn’t have value unless you can sell, market, or service that customer. So for each customer record, many customer intelligence analysts calculate lifetime value scores, the potential share of wallet available, the customer’s propensity to buy certain products and services, and even the cost of servicing the customer. But that doesn’t put a value on the customer record itself: It places the value based on the sales, marketing, and service processes the data supports. And that’s where the data value should live: in the consuming processes.

My first thought while reading this was if you were to buy a customer list from another company, but Rob addresses that later. I still had some qualms with it as I started to think about it from this perspective: If you were to lose data, or if your data were found to be damaged, it would cause problems for your company.

Others had similar thoughts, and a pretty interesting discussion is taking place in the comments section of the post with people on both sides of the argument. To some degree it becomes a semantic issue -- if data has value, shouldn't it be valuated? -- but interesting nonetheless.

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