If anyone were to ask you for an accurate value of your business’ or company’s data, would you know the answer? More to the point, would you know where to begin when it comes to assessing its value? After all, data is a coverall word which doesn’t differentiate between critically important data and worthless data that has been accumulated over the passage of time.
For many of you who have your own business, it would be reasonable to suggest that data is your most valuable asset. If that is the case, is it appropriately protected? It is likely you lock up the premises at the end of the day to protect the physical assets, but these can all be easily replaced. Data is unique, and once gone, unless appropriate backup precautions have been taken, it can’t be replaced. However, what’s the point in protecting data if it has no intrinsic value? Furthermore, if you don’t know your data’s true worth, how can you put a value on it?
The value of data is actually such a subjective matter that there is a whole field devoted to it, called infonomics. However, in many instances, insurance companies and the accounting profession do not regard data to be an asset, and thus this has become one of the principal challenges of infonomics. Company CIOs, CFOs and CMOs know that their company data has value, but not how much – that is the domain of infonomics, also known as the economics of information.
Where IT is concerned, physical assets have a clearly identifiable value, but what about the ‘information’ itself? This is often seen as having far lesser value as an asset and is often looked upon purely as a by-product of a company’s IT department. In many companies, fixtures and fittings are more closely managed and accounted for than the asset of information.
According to an article in the Wall Street Journal by Vipal Monga, one of the biggest challenges facing anyone trying to put a value on data is the lack of any standards. According to Monga, companies need to be able to “estimate the shelf-life of their data, figure out its future worth and track and report any changes in its value. Crunching those numbers would be relatively easy for a physical asset like a factory. But in the squishy world of intangibles, there’s little precedent for such calculations.”
When it comes to valuing data, its use also has to be taken into account, as well as how the data was compiled. In understanding this, it is possible to use a number of methods to value data, as follows:
- Establishing how much it would cost to replace the data
- Calculating how much the data contributes to the business revenue streams
- Estimating how much you could sell the data for
Depending on the nature of the data, its value also plays a critical role where cybersecurity is concerned. In the same way you wouldn’t keep Monopoly money in a safe, there is little point in spending valuable financial resources in protecting your data if it has little or no value. Beyond that, valuing data is critical from the point of view of any business insurance policy.
An example of the importance of valuing data was revealed after the 9/11 disaster in the United States. A number of major businesses located in the World Trade Center who filed insurance claims in the months after the terrorist attack learned, to their cost, that insurance companies refused to recognise that information, or data, constituted ‘property’ and as such was therefore excluded from any compensation payments made. To overcome this problem, the challenge has subsequently been to see the value of data included in corporate accounting, and therefore be classed as an asset. In so doing, this means that any cyber insurance policy will provide adequate financial cover in the event of a catastrophic data loss.
For many a business, certain information and data has immense value, without which that business would cease to function; other information has little value and simply becomes archived as part of the business process. Once data is established as having a value, that is not the end of the story though as there is one additional step which needs to be taken. That is protecting the data. Here at Sedmi Odjel we specialise in providing secure data backup and managed secure storage solutions for data which has value. To find out more about how to value your data and information, and to learn more about how, as a managed service provider, we can protect it, please get in touch and we will be more than happy to discuss all the options available to you.