The shift from the industrial age to the information age has seen a corresponding shift in the asset value of leading organisations – from tangibles, such as buildings and stock, making up 80% of assets to intangibles, such as knowledge and information, comprising almost 80% of company value.
While accounting rules do not allow intangibles to be counted on the balance sheet, it does not mean they do not count and should not be counted.
Dave Waltho
Indeed many leading organisations, such as Tesco, have made the mastery of information a prime source of competitive advantage. However, such examples are few and far between and the majority of organisations and most chief financial officers still do not proactively manage the value of vital strategic assets such as information.
In fact, in March 2010 the Information Commissioner's Office (ICO) unveiled The Privacy Dividend report explaining "how to put a value on personal information and how to assess the benefits of protecting privacy".
This new report followed a 2008 study by ICO that revealed a lack of management engagement, a failure to put an appropriate value on personal information, and that organisations had not identified the potential cost of poor data privacy.
Further accentuating the problem in terms of valuing information within the public sector is the media frenzy around data loses that has reinforced the prevailing compliance and security-centric approach to information.
Unfortunately, because such approaches encourage a 'tick box' mentality rather than an understanding of the importance of information, they rarely succeed in achieving even their limited aims and they certainly inhibit the legitimate exploitation of information assets.
However, the consequences of failing to manage and share information effectively are well known, and include high profile cases such as the Soham murders, Dr Harold Shipman and Baby P.
Public trust
In contrast an asset-centric approach to information ensures it is secured and exploited with the same care as other strategic assets such as pounds, people and property. This switch in mindset and the need for management to become much more involved in managing the value of information is particularly important in the public sector, which can neither afford to continue to erode public trust by mismanaging information nor to leave such a vital asset so under-exploited.
Exemplars for the benefits of an asset-centric approach to information do exist in the public sector. In 2008 only 1 of 32 of the Metropolitan police boroughs rated 'excellent' for data quality and 18 were rated as 'poor'.
Nine months later, 30 boroughs were rated 'excellent' or 'good', none were 'poor' and information had become a major weapon in the fight against crime.
The Met's data quality manager believes the key to this transformation was the time taken at the outset to assess the operational importance of the different data sets and prioritising initial efforts on the information that would deliver the most value.
Communicating examples of early arrests made possible by analysing accurate and up to date information, quickly demonstrated to the front line the importance of taking more care at the initial data capture stage.
Similarly, by harnessing the power of their information assets to improve their targeting of non-compliant and potentially dangerous vehicles and operators, VOSA transformed their performance. Within a year 15% fewer investigations yielded a 32% higher prohibition rate and a 20% increase in customer satisfaction.
Failure to communicate
The importance of making an asset-centric case for improved information management has been underlined by the latest ICO report, which acknowledges that over 20 years after privacy legislation was first introduced, the reason it still does not receive the attention it deserves within most organisations has been the failure to communicate the importance of privacy in terms of business value.
Their paper quantifies the benefits and makes a compelling business case for privacy.
However, general progress is slow and the current political debate does not suggest it will accelerate. Despite general recognition from the major political parties that the public sector needs to become better at 'steering rather than rowing', their IT strategies still remain concerned with how to source and share cheaper oars.
Dave Waltho is head of government affairs, SAS UK
A whitepaper on valuing information as an asset is available here
From Bubb's Blog
From Whitehall Watch
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