How to Measure Business Data Financial Value?

This is a newsletter in partnership with Marcos N. .

Business data and information play a fundamental role in all aspects of commercial operations. It's a valuable resource that fuels the day-to-day operation of sectors such as sales, purchasing, production, manufacturing, logistics, distribution, among others.

These intangible assets are often overlooked as a component to achieve operational efficiency, innovation, and strategic decision-making within organizations.

Measuring their value and understanding the consequences of their loss are challenges that companies face today.

The valuation of business data can follow several approaches, each with its own complexities and considerations:

1.???? The COST method involves analyzing the costs associated with the acquisition, development, and maintenance of data. It covers expenses related to technology, human resources, software, and other infrastructure.

2.???? Determining the MARKET VALUE of the data based on what another company would be willing to pay for them in a market transaction is a challenging approach.

3.???? The Net Present Value (NPV) approach calculates the current value of future cash flows that the data can generate. It takes into account expected benefits such as increased revenue, reduced operational costs, and improvements in decision-making.

4.???? Through USAGE-BASED EVALUATION, the value of data is determined by how it is internally used by the company to generate value. This includes its impact on operational efficiency, customer satisfaction, innovation, among others. Here, it is necessary to reflect on which sectors of the organization would become inoperative if the data were unavailable.

5.???? Another technique is ASSESSMENT BASED ON SIMILAR INTANGIBLE ASSETS, sometimes data is compared to other intangible assets such as patents or trademarks to determine its value.

Once we are aware of the value and scope of business data, we can highlight some negative impacts due to its loss beyond the consequences of operational disruptions:

1.???? Financial loss due to operational disruptions, loss of revenue, and additional costs to recover or rebuild lost data can result in significant losses. Additionally, violations of data protection regulations can lead to substantial fines.

2.???? Damaged reputation due to data loss can undermine the trust of customers, investors, and stakeholders, negatively affecting the company's reputation and customer loyalty.

3.???? Operational impact due to disruptions in business processes, downtime, and system failures can impair employee productivity and the company's ability to meet customer demands.

4.???? Compliance risks due to violations of data protection regulations can result in fines and substantial legal penalties, depending on the industry and the company's activities.

5.???? Loss of competitive advantage as data is a strategic resource, and its loss can result in the loss of competitive insights and the company's decision-making ability.

6.???? Recovery and rebuilding costs to retrieve lost data can be a costly and time-consuming process, involving investments in technology and additional resources.

Therefore, it is clear that business data must be protected as assets such as buildings, factories, offices, machinery, tools, and vehicles are protected.

Below are some ways to protect business data:

1.???? Develop and implement INFORMATION SECURITY POLICIES that address aspects such as data access, acceptable use of technology, password policies, among others.

2.???? Implement ACCESS CONTROLS to ensure that only authorized users have access to sensitive company data. This may include physical access, multi-factor authentication, strong password controls, and privilege management.

3.???? Use ENCRYPTION to protect data in transit and at rest. This ensures that even if data is intercepted, it cannot be accessed without the proper encryption key.

4.???? Implement network FIREWALL and ANTIVIRUS software to protect against external threats such as malware, ransomware, and other forms of cyberattacks.

5.???? Perform regular BACKUPS of business data and implement DISASTER RECOVERY procedures to ensure that data can be restored in case of loss or corruption.

6.???? Implement SECURITY MONITORING systems that can detect and respond to suspicious activities on the network, such as unauthorized access attempts or abnormal user behavior.

7.???? Provide regular SECURITY AWARENESS training for employees so they are aware of recommended information security practices and can recognize and report potential threats.

8.???? Keep all systems and software UPDATED with the latest security patches and fixes to ensure that any known vulnerabilities are addressed.

9.???? Physically protect equipment and devices containing sensitive data, through measures such as physical access control, security cameras, and security locks.

10.? Ensure that the company is in COMPLIANCE WITH APPLICABLE DATA PROTECTION REGULATIONS, such as LGPD, to avoid fines and penalties for data breaches.

By implementing measures to protect business data, companies can reduce negative impacts such as financial losses, reputational damage, and even competitive advantage loss. Consulting specialized professionals greatly helps mitigate these risks and ensure operational continuity and sustainability of organizations.