Executives should quantify the business value of data and invite the privacy team to join that process.
It’s not enough to use your company’s data to build new products and services. If you want to move to the next phase, you need to have a “data trust strategy.” This means you need to know what your company’s value is worth and take action to preserve that value.
In the November 2019 PwC Digital Trust Insights report, analysts asked corporate leaders about the state of their data strategy as well as their biggest concerns about that strategy.
Companies that are building a data trust strategy find that regulations are helpful in guiding data governance.
The report found that a distinct group of leaders are pursuing an enhanced and advanced data strategy. This 37% of survey respondents are doing more than developing products and services from data. These leaders are “mitigating against the potential for value destruction, such as the cost of privacy breaches or the risk of relying on inaccurate data.”
Here’s what people are most worried about when it comes to managing data:
- Preventing data theft and leakage – 34%
- Improving the quality of the data – 34%
- Protecting the integrity of data and data-driven processes and decisions – 31%
- Managing privacy risks from authorized data processing – 29%
The three most surprising findings are:
- Pacesetters say regulations are a help not a hindrance
- Data privacy teams are vital to the process of defining data’s value
- Companies must choose customer privacy over profits
Among these “data trust pacesetters,” 61% have started using data to make operations smarter and faster compared to 46% of all companies. They are three times more likely to see an ROI from these efforts – 24% – than other respondents – 7%.
Whether your data policies and projects are at the leading edge or the lagging end, these three strategies will help you move things forward, they found.
Set a value and stick with it
PwC found that even companies with deep experience in data collection—like healthcare and financial services—have not moved to the next level of extracting value. If you haven’t calculated a value for your data sets, start by answering these questions:
- How much is your data worth?
- How much should you spend to acquire new data?
- How much more value will your data bring if it’s combined with other data?
- What percent of revenue should you spend to protect your data?
In the MIT Sloan Management Review, James Short and Steve Todd recommend considering a few frameworks for determining value:
- The asset, or stock, value
- The activity value
- The expected, or future, value
- The prudent value
The leaders in data valuation use marginal cost-benefit analyses on each data element to determine what data is worth acquiring. This helps with ROI calculations and is more reliable than leaders’ untested assumptions about value. The analysts note that “valuing data properly can also have a direct impact on operations, such as by setting the appropriate priorities for supply chains.”
Build privacy into your systems
Technology generally moves faster than the legal system can keep up. That has definitely been the case with privacy and data laws. Europe’s GDPR regulations and California’s Consumer Privacy Act are only the first in what is likely to be more government requirements around data privacy and management.
PwC found that pacesetters create design tools that incorporate security and privacy into their systems, products and services instead of waiting for regulations to force these changes. This means managing third-party vendors to make sure they also meet these standards for data handling and security.
Take the high road
This may be the most challenging characteristic of the pacesetters: adopting a value-based approach to data. This means choosing customer privacy over profits. This also means keeping only the data that your organization needs and deleting the rest. In research about the Fourth Industrial Revolution, PwC found that consumers want more transparency and controls around their data. In previous research, PwC found that two-thirds of respondents expect to field more than 500 customer calls per day from customers with data inquires, with 11% planning for more than 10,000 daily.
Jay Cline, Joseph Nocera, Mir Kashifuddin, Sean Joyce, and Shawn Conners are the authors of the report, which is based on responses from 3,539 people.