Dr. David R. Hardoon is a Visiting Faculty at Sim Kee Boon Institute for Financial Economics, Singapore Management University and previously the Chief Data Officer at the Monetary Authority of Singapore.
Shubhangi Agarwal, Research Assistant at Sim Kee Boon Institute for Financial Economics, Singapore Management University.
Sri Siva Shankar R, CFA, Research Assistant at Sim Kee Boon Institute for Financial Economics, Singapore Management University.
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Ever wondered how much your data assets are worth? Rest assured, you are not alone. Today, organizations appreciate how data is a key asset for realizing the ambition in unlocking new value, new revenue streams, and new opportunities in the unfolding digital reality. Currently, it may only be possible to estimate a return-on-investment a-posteriori to data acquisition and investment. There is value in this approach. However, as a firm’s management trying to maximize shareholder value, or external investors assessing whether to buy, build or invest in an asset, or even as a nation’s government operating amidst the international data flow, we may benefit from having an a-priori estimate of our assets’ value.
Presently, data assets are valued using traditional methodologies used in the evaluation of other tangible assets. These methodologies, by virtue of their design, pose certain challenges when applied to data assets. Specifically, they yield an incomplete estimate of the value of data assets by ignoring the fact that no two data assets are the same and failing to account for the possibility that a data asset may have certain features not found in other intangible assets.
Furthermore, the importance of data has only been amplified due to Covid where the dependency on digital has grown exponentially due to necessity. New users are coming online; online transactions are happening at a faster rate and work from home is the new standard. Organizations are undergoing an accelerated digital transformation to ramp up their teleworking, cloud computing and e-commerce capacities. Consequently, not only is more data available, but more data can also be collected. Therefore, the question of “How much are my data assets worth?” is more pertinent now than ever and it is imperative that we figure out a way to answer this question.
Like most contemporary economic models, one way to approach this…
Continue reading: https://towardsdatascience.com/estimating-the-value-of-your-data-41917942f83b?source=rss—-7f60cf5620c9—4