Master data is often one of the key assets of a business. It is not unusual for a company to be acquired primarily for access to its customer master data. There are also a number of companies that have created highly lucrative business models based on selling data about specific marketplaces (examples include: Reuters, Bloomberg, IMS Health, Aimia, and Dun & Bradstreet).
Over the last few decades commerce has changed from being biased towards tangible assets (such as factories, stock, property and physical products) to more intangible assets (such as intellectual property, marketing brands, IT systems and the data that resides in them). In essence, intangible assets have supplanted tangible assets as the key value drivers in today’s economy.
The classification of intangible assets is in its infancy. Based on the current research in this area four areas of intangible assets can be identified:
- Knowledge: intellectual property (patents, recipes, product research), industry experience and knowledge (such as manufacturing and operating guides and manuals), IT systems and the data that resides in them.
- Business Processes: innovative business models, manufacturing techniques and supply chain operations.
- Market Positioning: contracts, distribution rights, licences (eg third generation telecom licences), import quotas, government permits etc.
- Brand and Relationship: trade names, trademarks and trade symbols, domain names, design rights, trade dress, packaging, copyrights and the brand relationship with the consumer.
Some examples of real world companies that have business models based on (or heavily impacted by) intangible assets are:
- Google purchased Motorola Mobility Holdings for over $12 billion to forestall patent litigation and force settlements with Apple Inc. (AAPL) and Microsoft Corp. (MSFT) over smartphone technology.
- ARM Holdings, a circa $1 billion company, is the world’s leading semiconductor intellectual property (IP) supplier.
- Dun & Bradstreet is the one of the world’s leading source of business information and insight for credit risk management, sales & marketing, supply management and regulatory compliance decisions worldwide. They have a huge commercial database containing more than 202 million business records.
- IMS Health gathers and connect more than 10 petabytes of complex healthcare data on diseases, treatments, costs and outcomes. This data is sold to pharmaceutical and healthcare organisations as well as government agencies.
The purpose of valuing the organisation’s enterprise data is not about getting the exact value (if this is at all measurable) but to give a sense of the importance of this type of data to the organisation. It is easier to manage and understand things that can be valued rather than nebulous data concepts.
This blog is an extract from my latest book which is on the subject of MDM, entitled ‘Mastering Your Data’