Is data a liability?
We typically talk about data as a valuable business asset; a modern-day treasure of sorts. Data is our eyes and ears; our business oil; the engine that powers our decisions. Or so people commonly claim.
But what if data is really a liability? With a rise in data breaches and legislation like GDPR, the destructive power of data is now being noticed at least as much as the benefits of collecting it.
Today, more of us are beginning to see data as a danger – while still benefiting from the ways it proves an asset. So, which is it? Here, we examine our relationship with data in a world overloaded with it.
Our relationship with data
The amount of data we store is on an upward curve and it’s showing no sign of slowing. We create more data every second — as much as 1.7 megabytes worldwide. By next year alone, we’re going to be storing as much as 44 zettabytes of data. That’s 44 trillion gigabytes of data requiring storage and maintenance. (To put these numbers into perspective, that volume of data would fill a stack of iPad Air tablets from the earth to the moon 6.6 times.)
Now, we already know about the benefits of this data. It gives businesses invaluable insights into brand perception, customer satisfaction and emerging trends. It’s instrumental for informing decisions, improving our operations and helping us plot the future of our companies.
But we don’t use everything we store. In fact, it’s likely that as much as 90% of the data we store isn’t even analysed. In other words, we’re hoarding data on a massive scale, but only gaining from a marginal percentage of it.
On the other side, consumers are becoming less and less willing to share their data. GDPR, multiple mass breaches and data scandals like the Cambridge Analytica saga have raised public awareness of the dark side of data. Meanwhile, concerns over cybersecurity are high. It’s clear that our relationship with data is a complex one.
The data dark side
Data has patent and undeniable value. But it also poses a distinct liability. Maciej Ceglowski has gone so far as to label data: “A waste product, a bunch of radioactive, toxic sludge that we don’t know how to handle.”
Indeed, data is often far from the celebrated resource it is so often perceived as. It can prove both difficult and downright dangerous. The most common arguments against the merits of data centre around cost, security and consumer concerns.
- Cost of storage
Expense is perhaps the most basic argument for data being a liability. It costs money and eats up a vast amount of energy to store and process all the data we collect. This not only includes the cost of data hosting, but also the costs of the software needed to collect, analyse and manage it.
- Security of data
With the rise of awareness — and instances — of cybercrime and data breaches, many people are hesitant to share their data. Companies that do collect it are then faced with the task of ensuring its safety. This poses another instance of the liability of hoarding data — where a breach stands to damage the customer relationship and erode any trust you’ve built. And this is true regardless of whether you’ve used that data or not.
- Privacy concerns
Apart from major data breaches, collecting and using data is also a potential privacy liability. People don’t tend to enjoy feeling as though they’re being spied on. Nobody wants their every move stalked and scrutinised. So, when they receive materials and services based on information they haven’t shared, it can be unsettling or annoying for customers. In some cases, it could scare them away or damage the relationship they have with your brand.
Types of data
These problems don’t necessarily lie with the data we use. It’s the data that we hoard but don’t use that proves a major liability, because the risks aren’t offset by benefits.
Useful data is a liability in so much that it needs storing and protecting, but it’s often far more an asset providing a valuable decision-making aid.
Non-useful data is the other side of the coin. It’s most likely to pose a liability to your business, and it comes in a few forms.
- Legacy data: once-useful data that is now old and outdated.
- Duplicate data: repeat records of the same data.
- Dark data: the data we don’t use, analyse or even realise we’re collecting.
This data we store — but don’t use — offers us little-to-no benefit. It’s not an asset because it doesn’t provide any advantages. But by collecting and storing it, we end up out of pocket. Plus, should a breach happen, non-useful data is as damaging as useful data.
In other words, it’s unneeded, but still a vulnerability.
Actionable insight and correct usage
Data, when used correctly, is an asset. It gives insight that’s integral to helping us improve and direct all areas of our business efforts. But we’re collecting far too much of it. So much, in fact, that it’s becoming a liability.
So, to optimise our data, we need to be sure that we are using it effectively. We need to always ask ‘does the benefit outweigh the costs?’
Correct and effective use of data starts with only collecting the useful data. It means following legal regulations for its use. And it means carefully considering how best to use the insight it grants.
A data de-clutter
The key to reducing the liability of data, then, is focusing on recording and storing only the data we use and need. We also need to be wary of the effects that actions based on data insight could have. Keep the data that provides an asset, and forget the data that’s just a liability.
It’s time for a data de-clutter. We need to stop storing and start deleting all the non-useful data that’s clogging up our systems. If the benefit of keeping the data doesn’t outweigh the risk of storing it, why do we need it anyway?
Note: we originally published this article here: https://www.itproportal.com/features/is-data-liability/