In the last two years digital transformation has ceased to be a choice for many companies. A remote workforce has seen to it that many formerly manual processes and workflows, including those involving customers, must now be automated and/or move online.
One critically important thing this development highlights, as Tatyana Corbin, CPA, points out writing for Strategic Finance Magazine, is that data has become the strategic asset.
We’ll summarize her argument here from our editorial perspective and link to Corbin’s article for your deeper consideration.
Data is an asset
Without high quality data (or without data at all), business decisions are at best made by instinct and opinion. That “finger to the wind” approach can and does steer companies in the wrong direction, to the extent that it can break an organization. Data–aka facts–is therefore a concrete tool whose maintenance and use is of tangible, measurable value to a company.
To go a step further, in the digital age data may be the single most valuable asset companies can leverage. Whether and how it can be monetized varies from company to company, but virtually all companies ultimately must use data internally to drive business. There are many studies to back this, but perhaps the most poignant comes from IBM, who Corbin mentions “discovered that bad data costs $3.1 trillion annually in the United States alone.” There’s simply no question that data is as or more important than almost any other traditional asset.
Who manages data?
Like other assets, data must be managed. Just because you can’t hold it in your hands, or drive it down the road, doesn’t mean data won’t suffer from neglect and wear. The importance of a systematic strategy for data collection, storage, transformation, and presentation cannot be understated, and it goes hand-in-hand with the valuation of data–whether it’s financial data or not.
As a result, finance leaders, who are largely responsible for asset management en masse, must be deeply involved in both the management and reporting of data throughout an organization, regardless of what the data is or where it comes from.
Data requires an investment, and thus finance plays a pivotal role in data stewardship–designing, relaying, and enacting the strategic vision for the organizational uses of data as well as the decision derived from it.
Data is an investment
Like any investment, data ought to be leveraged for its potential to drive returns. It therefore must necessarily enter the accounting world and all the rigors therein. Finance and accounting professionals throughout an organization must be involved in recognizing data as an asset. Perhaps this starts with finance leadership, but only insofar as they impart the larger cultural attitude toward data strategy. Finance leaders must work to instill in themselves and their teams this importance.
For a deeper look at data as an asset for finance professionals,
read Corbin’s full article here.
