Data As A Liability

Lee Mc Donald posited at last week's Perth Data Engineering Meetup that data is at its most basic form a liability because it costs money in simply existing.

I'm no economist but let's go back to basics:

• Asset: anything that puts money in your pocket
• Liability: anything that takes money out of your pocket

Excuse me as I use the Rich Dad, Poor Dad definition.

Data sits on a spectrum between the two. I particularly like this article "Tread Carefully: Big Data Is Both An Asset And A Liability " which highlights that organisations collecting as much data as humanely possible may come back to bite them as it becomes impossible to meeting increasingly strong compliance standards.

The fact that by merely holding data costs a business puts it in the inherent liability quadrant (Rich Dad, Poor Dad IFYKYK), yet in order to gain value it must be balanced with an equal or great opportunity to "put money in the businesses pocket".

Those costs?

1. Storage: yes, storage solutions are essential for managing and accessing large volumes of data effectively. However they come at a significant cost...and a growing one. Enter Moore's Law; data grows exponentially.
2. Governance: ensures that data is managed consistently and responsibly across an organisation. This involves policies, procedures, and standards that must be established and maintained, adding to the overall cost. Emphasis on the maintained.
3. Security: Cybersecurity is increasingly important to protect data and it becomes an almost insurance like fee, requiring continual maintenance.
4. Compliance: Enter GDPR. Organisations must comply with current AND future standards. Non-compliance can result in hefty fines, making it a costly to ensure all data practices are up to code.
5. Analytics: Great to have data analytics but it costs in manpower and technology to deploy this.

Data is only an asset when the value is realised.

Balancing Act: Turning Liability into Asset

I'm not data guru but from my perspective these stand out as the path to asset:

1. Optimise Storage: Implement cost-effective storage solutions, such as cloud storage with scalable pricing models. Regularly audit data reducing storage costs. Enter FinOps.
2. Enhance Governance: Invest early and get it right early, not later where it becomes more expensive.
3. Strengthen Security: Jump on the cybersecurity trend e.g. encryption, access controls and continuous monitoring. Regular security audits and employee training can help mitigate risks and protect data assets.
4. Ensure Compliance: Keep up to date with changes and be conscious that guidelines could tighten in the future.
5. Leverage Analytics: Invest in advanced analytics tools and the people to operate them.

People Drive Asset Growth

The combination of the right technology and the right people leveraging that technology will lead to the asset being utilised.

If we view data as a mine and the trucks as technology to get value from the data...we still need the right people to drive...and it's costing us money everyday to simply operate a min.

The right people need to drive the operation and data value forward.

DR Analytics Recruitment

I'm Douglas - former data analyst and Founder of DR Analytics Recruitment. We grow people and businesses with an exclusive focus on the recruitment of data, analytics and AI professionals. Companies use us to build their data teams because of our industry expertise, specialisation and technical testing.

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