If you were to look at the balance sheets of most Global 2000 companies, you would see many varied entries for assets such as property, cash, equipment, accounts receivable and my favorite category goodwill. Unfortunately, one item that is not seen in the asset section of the balance sheet is data. In the information age, data is every bit as valuable as property, equipment and goodwill. Low quality data, mismanaged data, redundant applications and poorly built applications prevent companies from effectively managing their other assets. For example, how can a company convert accounts receivable into cash when the accounts receivable system has transaction records with data quality issues that prevent them from becoming billable? Moreover, all of the needlessly redundant applications create a substantial cost drain on the enterprise's cash assets.
This is an especially important concept as all companies are desperately trying to increase shareholder value. Corporate executives spend endless hours looking for ways to increase their company's value as 95 percent of these executives have their compensation directly linked to shareholder value. The vast majority of chief executive officer (CEO) and chief information officer (CIO) compensation is based on the performance of the company. These corporate executives realize that shareholder value is not just tied to the assets on the balance sheet. In fact, a great deal of shareholder value is achieved through nonphysical measures (e.g., intellectual capital, customer loyalty, brand recognition, etc.). Moreover, CEOs and CIOs are using successful technology implementations as trophies to improve shareholder value by enhancing their company's reputation as a technological leader in their industry and by attracting better employees that want to work for sophisticated organizations.
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