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#CDOVision
www.cdovision.com
Moderator: Tony Shaw
CEO, DATAVERSITY
Moderator: John Ladley
President
IMCue Solutions
All content copyright 2015 IMCue Solutions LLC 0
Metrics for Information
Management
Starter
Can data or information cost
your company or organization
$$$$$?
Is there a broad economic
impact of data and
info...
Objective
 Understand the wide
variety of
options available to
CDOs and other TDJ –
types
for measuring the value
of
data...
What does Information Asset really mean?
 Metaphor
– Example from Thomas C.
Redman, Ph. D.
3
Accounting
reasons:
If it is an asset, then it has a probability of
generating future value
It is distinct from financial ...
Why usage holds the key:
The “algebra” of R
Where C= Create, U= Update,
D = Delete, R = Read
If Value = Usage , and Usage ...
6
How to look at information measures
InformationValue
Balance Sheet
Asset
Tangible
Intangible
Liability
Risk
Allowance
Te...
7
INFORMATION VALUATION
Components of relative value
Relative value category
Relevance Relative importance to your job
Importance Relative contrib...
Methodology to value information assets
• Align business direction with information needsAlign to business needs
• Identif...
10
Selecting an Information Valuation Method
What is your
objective for
valuing
information?
Focused on
improving
informat...
The value of information to a business process: How good is the
data? How applicable to the business or a particular busin...
(Business process = Online offer to website customer)
Our customer transaction data is of the most potential value to us i...
13
Technical Debt
 Organization
accumulate
technical debt by
doing code poorly
 Poor IM also
generates
technical debt
No...
Technical Debt from IM
 Examples
– The increasing cost to
clean up poor data
quality
– Excessive costs from
mis- aligned ...
Information Debt Example (simplified)
Initial cost Total
Recurring
TOTALS
Business area outsources an
analytic function to...
16
SOME SIMPLE METRICS
17
Efficiency
 Total cost of IT / Party (Customer, Member, etc.)
 End User Labor / Number Users
 Total BI/DW Budget / T...
18
Risk Categories
• Liquidity
Risk
• Credit Risk
• Market
Risk
• Cash Flow
• Regulatory
Penalties
• Cost to adhere
• Oppo...
19
Risk
 Threat metrics
– Cost per downtime event
– Loss of customer confidence
 Financial Risk
– Liquidity
– Operationa...
Improvement
 Operating Income by Knowledge Worker
– Operating Income for year divided by number of
Knowledge Workers
– Kn...
Summary
 Measurements of
information value and
effectiveness are
viable
 There are many many
options to present the
valu...
22
THANK YOU!
Questions?
22
All content copyright 2015 IMCue Solutions LLC
23
Building Value Through
Information Asset Management™
jladley@imcue.com
3...
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CDO Vision: The Value of Data

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There is growing discussion in many organizations on monetizing data, not only as a revenue source, but as a balance sheet item. John will cover some of the new and more interesting methods being kicked around for measuring data as an asset.

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CDO Vision: The Value of Data

  1. 1. #CDOVision www.cdovision.com Moderator: Tony Shaw CEO, DATAVERSITY Moderator: John Ladley President IMCue Solutions
  2. 2. All content copyright 2015 IMCue Solutions LLC 0 Metrics for Information Management
  3. 3. Starter Can data or information cost your company or organization $$$$$? Is there a broad economic impact of data and information? If you answered “yes”, show me how much? 1
  4. 4. Objective  Understand the wide variety of options available to CDOs and other TDJ – types for measuring the value of data and EIM 2
  5. 5. What does Information Asset really mean?  Metaphor – Example from Thomas C. Redman, Ph. D. 3
  6. 6. Accounting reasons: If it is an asset, then it has a probability of generating future value It is distinct from financial and material assets Compliance with Financial Accounting Standards Board Statement No. 142 — measuring intangible assets Practical reasons: Information affects the organization in visible and most likely measurable ways Value is, in its own way, a means to manage priorities All types of risks need to be managed Information management will offset technology debt Why worry about information’s value? 4Content property of IMCue and FSFP, Copyright 2013 Reproduction prohibited
  7. 7. Why usage holds the key: The “algebra” of R Where C= Create, U= Update, D = Delete, R = Read If Value = Usage , and Usage = R, then Value = R If Information Value = R, Information Costs = C + U + D Unless information is used (read) it has no value other than the sunk cost to produce the data, or the cost to get it back if lost The EIM / DG business case happens where data is used, or is misused 5 IM/DG business case: R > C+U+D Intellectual property also fits this approach
  8. 8. 6 How to look at information measures InformationValue Balance Sheet Asset Tangible Intangible Liability Risk Allowance Technical DebtEquity Income Statement Income / Returns Cost of Ownership Efficiency Effectiveness Program Progress Program Effectiveness EIM Value DG Value
  9. 9. 7 INFORMATION VALUATION
  10. 10. Components of relative value Relative value category Relevance Relative importance to your job Importance Relative contribution to overall business success Accuracy Relative importance of accuracy of data to business success Completeness Relative importance of all elements of this content being available History Relative importance of keeping history Volume Relative amount of events or transactions required to provide useful analysis Variety The different data types and sources, drawing from structured and unstructured content Volatility Relative effect of changing of values or instances Latency Relative importance of making this data or content available
  11. 11. Methodology to value information assets • Align business direction with information needsAlign to business needs • Identify what information needs to be valuedIdentify assets • Classify the identified itemsClassify assets • Determine valuation philosophyDefine philosophy • Determine valuation approachDetermine approach • Collect and calculate valuesExecute valuation • Present to business leadershipPresent results • Confirm understanding and approval to useConfirm support • Embed into regular planning processes Repeat 9
  12. 12. 10 Selecting an Information Valuation Method What is your objective for valuing information? Focused on improving information management discipline Focused on improving information’s economic benefits Intrinsic Value of Information (IVI) How correct, complete and exclusive is this data? Business Value of Information (BVI) How good and relevant is this data for specific purposes? Performance Value of Information (PVI) How does this data affect key business drivers? Cost Value of Information (CVI) What would it cost us if we lost this data? Economic Value of Information (EVI) How does this data contribute to our bottom line? Market Value of Information (MVI) What could we get from selling or trading this data? Leading Indicator Trailing Indicator CONFIDENTIAL AND PROPRIETARY © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
  13. 13. The value of information to a business process: How good is the data? How applicable to the business or a particular business process is it? How quickly can we get fresh data to the point of the business process? Information asset valuation: Simple Method: Business Value of Information (BVI) Variations • Include other objective or subjective measures • Weight information measures as appropriate • Assume latency (timeliness) is a given Notional 11
  14. 14. (Business process = Online offer to website customer) Our customer transaction data is of the most potential value to us in dynamically adapting the visitor’s website experience. Information asset valuation: Example Business Value of Information (BVI) Simple Method: Business Value of Information (BVI) 12
  15. 15. 13 Technical Debt  Organization accumulate technical debt by doing code poorly  Poor IM also generates technical debt No time to design Business conditions require we proceed What’s Layering? Now we know how we should have done it DeliberateInadvertent Reckless Prudent Steve Garnett-Technical Debt Strategies 2013 Ripplerock
  16. 16. Technical Debt from IM  Examples – The increasing cost to clean up poor data quality – Excessive costs from mis- aligned BI – The cost of not being able to count how many customers you have  The interest is still accumulating! And will until you reign in bad habits and build data reserves Data standards slow me down Business pressures require we proceed What’s a taxonomy? The cost of BI and data handling is silly Deliberate Inadvertent Reckless Prudent
  17. 17. Information Debt Example (simplified) Initial cost Total Recurring TOTALS Business area outsources an analytic function to a cloud vendor 5 year license commitment $25,000 $100,000 $125,000 Cost to integrate new external data into 3 interfaces, 5 years support $45,000 $5,000 $50,000 Total cost for “quick fix” $70,000 $107,000 $177,000 Internal cost to have IT build a quality solution $100,000 $5,000 $105,000 Information Debt $ 72,000 15
  18. 18. 16 SOME SIMPLE METRICS
  19. 19. 17 Efficiency  Total cost of IT / Party (Customer, Member, etc.)  End User Labor / Number Users  Total BI/DW Budget / Total Users, and / or Support  Number of interfaces, File feeds  Cost per Interface  DG / Compliance cost divided by Total Income  DG / Compliance cost vs. risk reserves / premiums  Budget / TB (GB)  Benchmarks – Number IT tools – Maintenance budgets – License costs – Training costs
  20. 20. 18 Risk Categories • Liquidity Risk • Credit Risk • Market Risk • Cash Flow • Regulatory Penalties • Cost to adhere • Opportunity Cost • Competitio n • M&A • Supplier exposure • Employee turnover • Loss of Info Operational Strategic FinancialRegulatory 18
  21. 21. 19 Risk  Threat metrics – Cost per downtime event – Loss of customer confidence  Financial Risk – Liquidity – Operational costs – Equity / market value reduction  Legal Compliance – Potential penalties per subject area – Litigation fees over time
  22. 22. Improvement  Operating Income by Knowledge Worker – Operating Income for year divided by number of Knowledge Workers – Knowledge worker is defined as someone who uses information to make decisions and take actions that cause the fulfillment of objectives, reads information  IM Project NPV – The net present value of the cash flow expected from IM projects over 5 year planning horizon  IM Portfolio NPV – Net present value of the current information assets expressed as pro-rated portion of free cash flow 20
  23. 23. Summary  Measurements of information value and effectiveness are viable  There are many many options to present the value of an information program  Saying it cannot be measured is not an option 21
  24. 24. 22 THANK YOU! Questions? 22
  25. 25. All content copyright 2015 IMCue Solutions LLC 23 Building Value Through Information Asset Management™ jladley@imcue.com 314-422-9076 23

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