Intelligent Information Management (IIM)
It seems obvious: In an age of Digital Transformation, the information assets of an organization are increasingly THE defining source of organizational value.
There is a growing gap between the traditional ways we value organizations -- in terms of the tangible and intangible assets reported in financial statements -- and the value the market puts on organizations. Over and over, in the face of the latest acquisition, we ask ourselves, “How on earth could company X pay so much for company Y?”
According to Doug Laney from Gartner, in 1975, on average, the tangible assets of a corporation represented 83% of its value. Today that number is 20%. As a result, over 50% of merger and acquisition exchanges can’t be accounted for.
The most recent example is the Microsoft acquisition of LinkedIn. We look at the accounting value of LinkedIn -- $3.2 billion in revenues -- and compare it to the price paid by Microsoft -- $26 billion – and shake our heads and wonder:
- Is this a signal of another dot-com bubble?
- Why is the accounting value of the company so different from the market value?
- Is Microsoft crazy? Or crazy like a fox?
I believe that the core of this disequilibrium lies in our inability to properly measure and value the information assets of an organization. And this inability is reflected not only in a growing gap between what we report about companies and what we inherently know about companies, but also in systematically undervaluing the investments that companies make in processes to optimize information, protect it, and utilize it to create customer value.
Simply stated, if you can’t measure it, you won’t value it.
If “information” is the currency of the Digital Age, why don’t organizations manage their information assets with the same seriousness as their financial assets, their physical assets, and their human assets?
Why is “Infonomics” such a difficult concept for organizations to grasp?
Check out my new white paper for some answers – Infonomics: How do You Measure the Value of Information? It captures the findings of two meetings in London and Washington of 50+ industry leaders. Get your copy today.
