Your data is a balance sheet asset. Are you treating it accordingly?
It’s no secret that data is your organisation’s biggest asset. It’s what powers data-driven business decisions, better product development, and exceptional customer experiences.
But data can also be one of your biggest liabilities. Poor data management carries risk, with the average financial toll of a data breach now estimated at US$4.35 million.
How can you ensure your balance sheet accurately reflects your company’s position—including your data valuation and risk? Many companies are not doing this well, because frankly, they don’t have clear visibility over their data.
And it’s no wonder they aren’t doing it well. Pricing the risk of your data falls in an awkward no-man’s-land in many companies—the CFO has a stake, the CIO has held the reins on the data, the business owns the data, and obviously, it’s the CRO’s job to manage risk.?
But companies can’t excel in the current environment with these pieces working separately. There’s an opportunity here for brave C-suite leaders, especially CROs, to unify their data asset, codify their intellectual property, and get risk valuations right. The consequences otherwise could be catastrophic.
CROs, are you ready to take the lead??
What’s your IP worth?
Whether you sell cars, mortgages, or services,, your company is a data company.
You already know that a unified view of your data is what drives improved decision making, operational efficiency, risk mitigation, and more. Many organisations have already begun solving for fragmented data by codifying, understanding, and protecting their intellectual property in a single platform. It’s a heavy lift—customer data, operational data, employee data, and transaction data often live in different systems and architectures.
A holistic view is necessary not only for innovation and growth in your business, but also for an accurate balance sheet. All this data has immense value, and risk too. And you can’t value messy data accurately.
If you can’t price your risk, your balance sheet is likely over-leveraged?
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For too many organisations, risk is being treated as an assessment rubric or a compliance spreadsheet—a form to tick off and hand to a supplier. And that’s certainly a part of it, but that’s not all risk is.
Risk is also a balance sheet line item.
Traditionally, enterprise organisations manage financial risk by provisioning and maintaining an equal value of assets. And so, if you’re not accurately assessing the risk of your data, you can’t manage your operating expenses effectively.?
On one hand, if you overestimate your risk, you’re stuck overpaying, over-hedging, and over-leveraging your balance sheet with assets. That means you are holding onto assets that you can't operationally use to power the growth of your business, because you’re leaving cash sitting idle in your savings account.
Conversely, if you're a startup, you’re seeking to raise funding. And so, being able to very accurately identify and calculate your risk enables you to raise capital at a lower cost relative to your industry peers. Valuing your risk accurately relies on having a unified view of your data.
You need to manage that risk, too
Once you have a unified view of your data and its value, it’s a risk manager’s job to protect and keep that asset safe against risk.
Therefore, a CRO needs to have a say about:
If your job is to manage risk in your organisation, you can no longer take a back seat to decisions about how data is stored, protected, and governed. That’s why I believe that conquering this mammoth task should fall under the purview of the CRO, the very same person tasked with keeping an organisation’s data compliant.?
I’ll talk about that more in my next post.