The concept of data as a strategic asset has been gaining momentum in the past years. A few years ago The Economist published an article called “The world’s most valuable resource is no longer oil, but data.” Ever since, data has been compared to oil in hundreds of publications around the world.
Oil has become the world’s most important source of energy since the mid-1950s. Its products underpin modern society, mainly supplying energy to power industries, heat homes and provide fuel for vehicles and airplanes to carry goods and people all over the world. Comparing data to this raw, multi-purpose energy source is a bold statement. So, is it a reasonable comparison?
How is data like oil?
Let’s take a quick look at how Clive Humby, the data science entrepreneur who coined the phrase “data is the new oil,” compares oil and data:
“Data is the new oil. Like oil, data is valuable, but if unrefined, it cannot really be used. It has to be changed into gas, plastic, chemicals, etc. to create a valuable entity that drives profitable activity; so must data be broken down, analyzed for it to have value.”
Well, that’s pretty accurate. Data must be cleansed and changed after collection to be in the proper form. That’s because real-world data is messy, and that means we may need to deal with inaccurate or missing data. But unlike oil, data is an infinite resource that is created every day by people.
The notion that “data is the new oil” is linked to how both commodities gain value in a comparable way. Like oil, raw data doesn’t have value by itself; rather, value is produced when it is efficiently, accurately, and properly obtained, and also when it is connected to other relevant data.
What makes data so valuable?
Data helps meaningful customer engagement – a 19.3 billion dollar industry. Customers have more expectations than ever and demand more from companies, including integrated experiences across channels and personalised interactions. The availability of precise and complete data is a prerequisite for organisations to be able to offer these meaningful and personalised experiences.
Clean, reliable and good quality data helps to make decisions confidently, and quickly. The inverse has catastrophic effects; not being able to rely on the data at your disposal can cause undue stress and waste precious time and resources. Data literacy throughout the organisation can add tremendous value – when an organisation embraces and incorporates a culture of data, the impact on spending and operating costs is positive and significant.
Trustworthy data can give you a new product or service smooth entry into the market. The introduction of a new product or service can make or break an organisation, potentially having a direct impact on everything from cash flow to market valuation as well as a company’s capacity to draw in and hold on to investors for future expansion. A company’s current products can also create user data to inform future innovation and development if it has a sound data strategy in place.
Extracting data’s true value
Data needs to be organised, managed, stored and archived appropriately in order for it to retain and return on its oil-like value. Like how oil needs infrastructure for transportation and storage, data also needs infrastructure in the form of hardware and software. Any organisation that wants to retain data for analytics will need technology for collecting and storing data.
Good decisions are rooted in reliable information. You need to be able to rely on the tremendous amount of data running through your system. But it’s people who control processes and that means error is inevitable.
That’s where data management services come in. As a data consultancy, GlueData solves your business’ complex data challenges, streamlines your processes and trains your people so that your invaluable data can be relied on for its quality and that raw oil can become refined!
We help our clients manage, migrate and optimise their data; and we’ve been doing this for over a decade, giving us an unparalleled depth of knowledge and experience in our specialist field. We have expertise for all your data needs from governance, integration and SAP S/4HANA migration to data archiving, and analytics and insights.
Get in touch with one of our data experts and start managing your data with confidence.