{"id":406602,"date":"2021-02-09T05:53:20","date_gmt":"2021-02-09T13:53:20","guid":{"rendered":"https:\/\/www.esri.com\/about\/newsroom\/?post_type=wherenext&p=406602"},"modified":"2021-11-19T14:23:22","modified_gmt":"2021-11-19T22:23:22","slug":"what-is-the-business-value-of-location-data","status":"publish","type":"wherenext","link":"https:\/\/www.esri.com\/about\/newsroom\/publications\/wherenext\/what-is-the-business-value-of-location-data","title":{"rendered":"What Is the Business Value of Location Data?"},"author":501,"featured_media":0,"parent":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"sync_status":"","episode_type":"","audio_file":"","podmotor_file_id":"","podmotor_episode_id":"","castos_file_data":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","filesize_raw":"","date_recorded":"","explicit":"","block":"","itunes_episode_number":"","itunes_title":"","itunes_season_number":"","itunes_episode_type":"","_links_to":"","_links_to_target":""},"categories":[1001,381312,1021],"tags":[],"department":[476822],"wherenext-category":[],"industry":[],"class_list":["post-406602","wherenext","type-wherenext","status-publish","format-standard","hentry","category-commercial","category-cxo-priorities","category-transportation","department-data-and-ai"],"acf":{"short_description":"Most of a company\u2019s assets are now digital, yet few CEOs know how much that data is worth. One UK government-owned company has figured it out.","pdf":{"host_remotely":false,"file":"","file_url":""},"flexible_content":[{"acf_fc_layout":"content","content":"If a fool knows the price of everything and the value of nothing, the saying goes double when it comes to data. Any CIO footing the bill for enterprise technology is keenly aware of how much it costs, but do they know the value of the data on which those systems run? Generally, no. For truly data-centric organizations, this may soon become an essential practice."},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Right","content":"Article snapshot:<\/strong> Companies in every industry\u2014from retail to real estate, energy to banking\u2014are gathering and using more data than ever. Few know the monetary value of that data, but one UK government-owned company has figured it out.","snippet":""},{"acf_fc_layout":"content","content":"Though just 16 percent of business assets are tangible nowadays<\/a>, few firms have been able to successfully value the data that represents one of their greatest intangible assets. The traditional business balance sheet is partly to blame. There, physical assets like buildings and vehicle fleets are valued explicitly, while data assets tend to be valued implicitly. But that scheme gives short shrift to the primary asset of the digital age<\/a>. If data assets are in disrepair, a company might not give them due attention because their value isn\u2019t obvious, and doesn\u2019t carry a clear balance sheet consequence like a failing HVAC unit or an underperforming store would.\r\n\r\nTo bring valuation practices in line with the times, some executives are trying to put a value on their data<\/a>. A pioneer in this movement is a government-owned company in the UK, and its early work on establishing the monetary value of data should make business leaders take notice.\r\n

Talking to the Business about Data \u00a0<\/strong><\/h3>\r\nHighways England is the UK\u2019s governmental organization charged with operating, maintaining, and improving\u00a0England's 4,300 miles of motorways and major A roads, which carry over two thirds of all freight. Its mission is to connect the country and increase the safety and reliability of these major highways.\r\n\r\nLeaders of the organization have cut a new trail by bringing together different groups to understand and assign a monetary value to data, and arrive at a common business language to justify data investments. Don\u2019t be surprised if business leaders in the private sector end up following this lead."},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Left","content":"Location Data and the Power of a Visual<\/strong>\r\n\r\nLocation data is much easier for stakeholders to grasp than complex spreadsheet data, says Davin Crowley-Sweet, chief data officer of Highways England. \u201cMe giving you an Excel table that's 300,000 lines deep doesn\u2019t help you understand how to fix something,\u201d he says. \u201cIf I show you a map and there's a bridge that's in the North Sea, you can quickly do something about it.\u201d GIS technology improves the quality of data delivered to stakeholders, and makes it relatable and visible in a way the human brain inherently understands, he adds.","snippet":""},{"acf_fc_layout":"content","content":"Highways England has assessed over 60 datasets that create value for internal and external stakeholders, including any group that depends on road transit\u2014logistics providers, retailers, manufacturers, major transport hubs, commuters, local authorities, and data consumers.\r\n\r\nDuring the evaluation process, its analysts discovered that the geospatial data about its road network was a particularly high-value dataset, covering everything from real estate to bridges to work trucks to the places where weather events occurred and the actual roads in the network. But it took a bit of a maverick to set the organization on a path to measuring that data\u2019s monetary value.\r\n\r\n\u201cWhat we wanted to do is make data a bit more visible to the organization and to our people, our suppliers\u2014from a perspective that they understand, which tended to be finance,\u201d says Davin\u00a0Crowley-Sweet, the agency\u2019s chief data officer.\r\n

Investments in Location Data Multiply Value <\/strong><\/h3>\r\nCrowley-Sweet joined the agency two years ago after a long stint in the railway sector, where he became interested in the concept of generating value from data<\/a> by treating it as an asset. Once at Highways England, he decided to do an experiment to uncover the types of data stakeholders prioritized, as well as the financial value of that data.\r\n\r\nBy gaining a common understanding of data\u2019s value, he reasoned, the organization could better structure its investments in protecting, maintaining, and building this critical asset.\r\n\r\nDuring the first stage of the assessment, Highways England pegged the value of its physical road infrastructure at \u00a3115 billion, and the intangible value it delivered to the country at \u00a3200 billion, according to Crowley-Sweet. Then they faced an even more difficult question: what proportion of that intangible value was derived from data?"},{"acf_fc_layout":"form","form_type":"aside","form_position":"Right","form_title":"THE ESRI BRIEF","form_desc":"A biweekly email connecting senior executives and business leaders with thought-provoking articles on location intelligence and critical technology trends.","form_button_label":"Sign up now","form_content":"https:\/\/go.pardot.com\/l\/82202\/2017-10-12\/jw1bmb","form_tag":"low-commitment-form\/sign-up-form"},{"acf_fc_layout":"content","content":"\u201cIf our accounting rules were written in a digital era, would we still see data as something that isn't valued on our balance sheet? My view is no, you wouldn't. Data would probably be front and center,\u201d he says.\r\n\r\nTo establish the data\u2019s value, Crowley-Sweet and his deputy Victoria Williams began by calling representatives from every stakeholder group\u201459 interviews in all. The team talked to local authorities, major transport hubs, and data consumers, and identified the datasets that most supported their activities.\r\n\r\nThe team supplemented its phone interviews with online surveys to ensure the process was statistically robust. Roughly 300 people weighed in during the nine-month process.\r\n\r\n\u201cWe asked those stakeholders to rank the Highways England initiatives they valued the most\u2014things like maintaining the road surface and providing traffic flow data,\u201d says Williams, head of data and information governance. The results yielded a measurable preference for each initiative, which the team then used to gauge data dependency, identify enabling datasets, and calculate the economic value created for each stakeholder group.\r\n\r\nThe value of organizational data came out to just under \u00a340 billion for the top six stakeholders, and approximately \u00a360 billion for all groups combined. The value comes in the form of time saved via traffic notices and roadwork alerts, as well as safety improvements and even reductions in emissions and noise. Crowley-Sweet and the team weren\u2019t sure how members of the organization would react, considering it was the first time anyone had heard a number assigned to the data. People were more accepting than he expected.\r\n\r\nHe and the team then posed a question to their colleagues: \u201cOur governance structures are geared around managing physical assets, but did you know that our virtual assets are one-third of the value of our physical assets?\u201d The inescapable conclusion: the organization was not paying enough attention to its data assets<\/a>."},{"acf_fc_layout":"quote","image":406622,"text":"If you find a company that has really good quality data, that's just a mirror image for all of their processes, be it safety, performance, finance, operations. Companies that care about data, they tend to care about everything.","author_name":"Davin Crowley-Sweet, Highways England","author_profession_organization":""},{"acf_fc_layout":"content","content":"

Comparing Physical Apples to Digital Apples<\/strong><\/h3>\r\nThe insight that followed\u2014embedded in these questions posed by the team\u2014couldn\u2019t help but capture the attention of senior leaders:\r\n