Is Data a source of value?
We have always been exposed to natural and man-made events and have wondered and been impacted by their outcomes. Our lives are shaped by the awareness of the phenomenon underlying the events we witness. We might find certain events to be favorable while others unfavorable depending on our interests and aspirations at the time.
Data is simply a descriptive representation of an event captured by a sensory device and/or an interpretive mechanism. Our ability to capture, represent, and share events have increased exponentially, causing an unprecedented growth in data. To survive and prosper in this new data rich environment, individuals as well as businesses are undergoing digital transformations of their conventional operating mechanisms. Such transformations are often guided by the conviction that data has value and thus must be managed like an asset, and more the better.
Data and the concept of value
Is data a source of value? To seek an answer to this question, one will have to first broaden our understanding of the concept of value and how and where does value emanate from.
The concept of value provides an internal reference for what one might consider as beneficial and desirable during the pursuit of their aspirations, and it may span ethical as well as economic dimensions. If a group of people or a business group have common aspirations, they may have a shared understanding of value as it applies to achieving those aspirations. But for the most part, the concept of value is subjective as individual aspirations differ and are often competitive.
Data and value are opposite concepts in fundamental ways. Data is an objective and static representation, notwithstanding the biases introduced by the limitations of the measurement mechanism. Concept of value is subjective dynamic, and contextual. The fact that it is raining today in Austin may be of value to me in deciding whether to pick up an umbrella or not only if I have to step outside today. Knowing about rain yesterday, or in Michigan may not be of any consequence.
Is it than proper to say that data has no intrinsic value in itself? As a rule, the answer is yes but there are few exceptions. To assert that data has intrinsic value in itself, is equivalent to saying that a static entity has always encoded within it a contextual and time-sensitive entity which seems quite paradoxical. So, what are the exceptions?
First exception is when data itself is an object of exchange in an economic activity for which the buyer is willing to pay, than data is a source of value for the seller. For a business which collects and sells data, data becomes an asset. This does not necessarily mean that the acquired data also has an intrinsic value for the buyer.
Second exception is better understood by the analogy of a seed. A seed is a static thing but it has embedded within it the potential for manifesting a tree which is a dynamic and evolving thing. In the context of data, it means that data in its encoding contains the intelligence for deriving value from itself. Most data we collect however does not exhibit this characteristic and thus have no intrinsic value.
Deriving Value from Data
When the data has intrinsic value by virtue of embedded intelligence, extracting that value is a simple matter of activating that intelligence.
In other cases, data has to be paired with other data and intelligence for value. The fundamental difference is that the value now gets attributed to the intelligence for value extraction than to the input data itself. The value extraction intelligence is contextual and furthermore may be self-evolving through built-in reflective and self-learning capabilities.
The above distinction between data, value, and value-extraction intelligence prompts the following observations:
- Data collection and management is much easier than developing the required intelligence for value extraction.
- Having indiscriminate and more data may hinder rather than support the value extraction process.
- Value from data is realized only when the value-extraction mechanisms are triggered in time.
- Keeping all data around could be a curse rather than a boon. It helps to have mechanisms not only for remembering but also for forgetting.
About the author:
Dr. Rana is founding CTO at diwo. With more than 35 years of experience as serial entrepreneur and executive leadership, he was also the CTO of CommerceOne, and a core team member for developing strategy and launching distributed systems management initiatives at IBM.
Amalgam Insights names diwo as a market leader in Decision Intelligence
Data. You can never have too much of it — or can you? The data your business gathers means nothing without context and framing; insights... + 2021-07-13
CRN Names Enterprise AI Company diwo a Top 10 AI Startup of 2021
We are proud to announce that CRN has named diwo to its “10 Hottest AI Startups of 2021” list, the only bootstrapped startup to make... + 2021-06-22
AI Leaders Spotlight: The Power of Decision Intelligence in Retail Merchandising
Welcome to our AI Leaders Spotlight where we interview top business leaders on how AI can transform decision-making in key industries. The second interview in... + 2021-06-18
7 Questions For diwo´s Founder
We sat down with diwo CEO Krishna Kallakuri to learn about his vision and guiding inspiration for launching diwo. A serial entrepreneur, Krishna started his... + 2021-06-08
Why AI Models Eat BI Dashboards for Lunch
Many organizations devote precious time and resources developing predictive AI/ML models to determine what might happen in the future. The ultimate goal of these models... + 2021-03-26
Why More BI Dashboards Don’t Mean Better Decisions
A typical analytics dashboard, whether it’s viewed as a pivot table in Excel or within a business intelligence (BI) platform, is often the primary source... + 2021-03-17
How banks can leverage AI to better manage pandemic relief programs
The recent massive economic shifts due to COVID-19 have driven up risk for the vast majority of financial services institutions. Customer sentiment, spending and behavior... + 2020-07-28
Financial Services: Preparing for the Looming Credit Crisis
The COVID-19 pandemic has significantly affected financial institutions – slowing the growth of loan originations, increasing credit costs, contracting economic activity, and causing record levels... + 2020-05-15
Can retailers find strategies that balance short-term recovery with long-term sustainability to lead them out of the COVID-19 crisis?
Retail and fashion business leaders are currently focusing on business continuity (“keep the lights on”) and crisis management (“sell the right stuff”), but soon they... + 2020-05-05
Transforming Business Decisioning in the Pandemic era is more crucial than ever.
Our human tendency toward incremental thinking limited us from foreseeing how “a few cases of the flu” would balloon into the impact we see today.... + 2020-05-01
Surviving COVID-19: How can Retailers free up working capital tied-up in inventory?
Among the many sectors affected by COVID-19, retail will be one of the hardest hit. The sudden decline is attributed to country-wide store shut-downs and... + 2020-04-23
Don’t let your shiny AI models lose their luster!
Businesses have made significant investments in building AI/ML models in recent times. While models are increasingly driving significant operational efficiencies and differentiation for businesses, they... + 2020-04-22
AI Modeling in the time of Covid-19
Companies of all sizes are facing unprecedented uncertainty and challenges due to the global impacts of COVID-19. It has created a major systemic shock to... + 2020-04-14
How to derive value from your AI investments with Decision Intelligence
Ultimately, a company’s value is measured by the sum of its decisions. In order to succeed, the organization must make and execute decisions—across all levels... + 2020-01-24
Why isn’t my enterprise getting value from AI at scale?
Why do most AI initiatives for business fizzle out? Why do so many teams’ best efforts to develop or deploy new algorithms or predictive models... + 2019-11-21
Here’s why you’re probably losing the AI race
As the AI arms race is becoming more heated, more organizations are looking to beef up their competitive advantage... + 2019-08-01
Data In Wisdom Out
I am often asked by the curious, what do we actually mean by “wisdom out”. Is it just a marketing ploy or is there something more to it?... + 2018-10-31
Is Data a source of value?
We have always been exposed to natural and man-made events and have wondered and been impacted by their outcomes... + 2018-10-16
The Future of Decision Making: Human-AI Symbiosis
When we have to make an important decision, we face numerous challenges: uncertainty, complex data that’s difficult to interpret, competing priorities... + 2018-09-20
Digital Transformation- a $900B failure this year alone
Digital transformation has become a major priority for most organizations in some form or another, but for many, it’s proving to be quite the challenge... + 2018-09-20
So What’s AI’s Dirty Little Secret?
One could read the massively hyped claims of the trillions in productivity gains and then how far AI still has to go for real-world application... + 2018-09-20
How AI can rescue your BI “situation”
Even with a few credible upstarts in the past couple years, Self-Service BI still seems to be dominated by some large players that also require some very large and "very ongoing" commitments... + 2018-03-20
Business First! – how diwo aspires to flatten the knowledge pyramid
We can all agree on the fact that we are sitting on an unprecedented volume of data, and it is continuing to accumulate exponentially... + 2017-09-18
The Growing Market Impact Of AI
The future is always uncharted territory, and in the hype that currently sorrounds AI, with its ambiguous... + 2017-09-18
AI: How It Will Redefine My Job?
In the past few years, there has been an explosion in innovation and interest around Artificial Intelligence... + 2017-09-18
Wait Less, Sense More, Act Fast!
“If I had more legs, I could walk faster. If I had more hands, I could handle more, and if I had extra senses, I could respond wiser” – did you ever wish that?... + 2017-09-11
Unlocking the holy grail of UX design: bias-free user feedback in real time!
The potential of measuring emotional feedback from users is an exciting proposition in many fields, not least because it offers the possibility of unlocking... + 2017-07-25
What’s the Deal With AI Connectors
Artificial Intelligence (AI) is changing our lives, and these days feels more omnipresent than ever before. From Siri to autonomous cars... + 2017-07-25
Business Analytics-Why Search is Not Enough
Due to the popularity of internet searches, many businesses have attempted to adapt the search paradigm to tame their own unruly document clutter... + 2016-09-15
Drowning in data? Still no excuse for inaction!
Wouldn’t it be fantastic if we had a total understanding of the laws governing the reality around us? Imagine for a... + 2016-09-15