Infonomics

Are CFO’s finally ready to heed the advice of their Chief Data Officers and begin adding information assets to the balance sheet?Although the commonly used quote : “There is nothing more powerful than an idea whose time has come.” is regularly and erroneously misattributed to Victor Hugo, originating from his account of the French coup d’état of 1851 that brought Napoleon III to power, I feel it’s almost appropriate for Douglas B. Laney’s passionate argument on Infonomics. It’s an idea he’s been meticulously developing and arguing for almost two decades and has at last fully articulated in his latest book published by Taylor & Francis entitled Infonomics: How to Monetize, Manage, and Measure Information As An Asset For Competitive Advantage. Laney previously published his thoughts on Infonomics in Forbes back in 2012.This brilliantly researched book, supported by industry giant Gartner, is steeped in both a mastery of information technology as well as economics, in particular accounting methodology and complementing business disciplines that range from supply chain economics to compliance frameworks.Laney, with brevity and unfailing pragmatism, weaves his impressive understanding of the business of information, it’s flow and it’s enormous potential into a convincing pleading that I believe is a must read for not just the aspiring digerati, but any CFO, Chief Data Officer or executive hoping to survive and thrive in the Information Age. Beyond simply making the case that information is an asset and ascribing it the worth it clearly deserves, Laney is clarifying and elevating the relevance of so many of us involved in the ownership, or what he prefers to refer to, internally at least, as the stewardship of data.While the meaning of information ultimately drives business processes and decisions, it is the increasingly efficient, neat, and compact way with which we can technically represent information that allows its nearly unfettered flow and accumulation. Therefore, it is information’s meaning, representation, and context that combine to improve business process performance and decision making.Infonomics, Chapter 9 – Is Information An Asset?Drawing from frameworks including the ISO, the SCOR model, FASB, Records and Information Management and Library Science, Infonomics places each of these disciplines and approaches in a schema that unifies them around defining and realizing the value of our information, whether that is indirect or direct, raw or combined with external sources, to create value.Although I do consider this a milestone book in the canon of Information Management, I do have some minor criticisms of course. Laney is a VP at Gartner in the Chief Data Officer (CDO) research and advisory team, so he sources a lot of his quotes from executives and others at the company, which are relevant, but chalk full. There’s a lot of big round numbers, many of which are self-reported, which are intended to evidence the cost benefits and value of certain initiatives he references. I would take some of those figures with a grain of salt but I don’t doubt in any way the legitimacy of the efforts he uses as his examples. There’s also a throw away comment about cannabis strains which is in line with a lot of the, at times, cheeky style he uses to balance what is for the most part a very academic text. I’m not sure it was very necessary but it’s a minor criticism.I think the biggest gap in this book is the biggest elephant in the room these days, Privacy, PII and the new era ushered in by the EU’s GDPR and most recently California’s new privacy law. Laney largely glosses over this although he recognizes it at times such as in an example he uses about a North American airline he did some work for.Laney also shows some grit and takes a few shots at the insurance industry, specifically actions taken after 9/11 to insulate itself from claims arising from destruction of information assets. Nonetheless, his observations, complaints and told-you-so’s remain professional while entertaining.While the majority of the text is aimed at CFO’s and CDO’s, there is no doubt that this is essential reading for a wide swath of business folk and computer scientists alike, and even the general public really. Apart from the last chapter which spells out some specific calculations for assessing and measuring the value of your information assets, the book is a quick read, enlightening, and the best case made to date for an idea whose time has not only come, but is already transforming almost every business on the planet.

So let me admit at the outset, information technology is an area I'm relatively new to. Doug Laney's book has had a transformative impact on the way that I think about information and I'm incredibly grateful for that. As someone who has a great love of valuation, part III of the book, focused on measuring information on a firm's financial statements, was a labor of love. It's something I've brought to the attention of my agency, and while only in the most rudimentary stages, I've had fun building models that aim to properly value information as a living balance sheet asset, and also to show how variations in the "book" value of information cascade throughout the three financial statements.Perhaps the world's most respected valuation expert, Prof. Aswath Damodaran of NYU, spends considerable time arguing that in R&D intensive industries (e.g. pharma), it's silliness to account for R&D as an expense on an income statement given how long lived the benefits may be. Rather, the Professor argues that these should be assets to be capitalized on the balance sheet. I plan on asking him, but I imagine the Professor would take a similar view of investment in information that is likely to produce benefits over more than one period.Of course, unlike R&D, getting "information" into the financial statements at all - and not just as a footnote - is still a challenge. Here, I believe the private sector will push the accounting bodies, and as usual, the international folks will be ahead. Particularly folks on the buy-side know darn well that information has value, and they're going to use their own models to incorporate such - the sell-side, catering to the buy-side will follow and it'll be a rare instance of the accounting boards following the banks.In any event, as the section I was most at home with, this is A+ material, Mr. Laney dives deep, and it's needed to truly understand the crux of the accounting dilemma.Likewise, I was reasonably at home in the book's first section on monetizing information. Thanks to the author for expanding my horizons here. At a marketing agency, while we have some information that's valuable, I'm not prepared to call us info-intensive. But that is changing slowly but surely. And knowing my industry, I see opportunities here to get ahead of the field.Admittedly lacking experience in managing information in any official capacity, I'll need to reread that section of the book, but it'll be well worth it. Being able to be part of the conversation always matters. As we encounter more and more folks with AI and ML solutions, the one thing I know with certainty is that any wonders those tools have to offer will go to waste if there's insufficient data or the data isn't in usable form or use cases are insufficiently defined. And the adequacy of good data remains a tremendous problem in most of the fields I hold dear (certainly law and marketing, finance perhaps a bit less so). As the author notes, it's likely a good thing that the first wave of commercial big data offerings failed. Way over-speculative.This is a different type of review for me in that ordinarily, I'm praising a book that I can say with some authority is the best in its field (because I'll have read the competition). I still think Mr. Laney's contribution is profound, however. This book teaches complex concepts but one can happily follow along; the examples are terrific; the flow makes wonderful intuitive sense; and without any need to be overly provocative, it's a strong call to action. Business folks, whether IT or not, are going to be grappling with information and data for the rest of their careers - indeed, their careers may be defined by it.I would take this kind of forward-looking, as applied introduction 1000x over an abstract "introduction to information economics" text. Extraordinarily impressive and highly recommended and I suspect I'll have more to say upon a second reading. Thanks Doug!

In a world where you cannot read a business, technical or indeed any other kind of publication without coming across some vacuous 'data is the new oil' statement there would be great value in a brief, sensible treatment of the issues that this raises.Mr Laney has delivered on that requirement. He has been working in this area for some time and would appear to be well placed to gather his data and form his arguments.'Infonomics' offers a simple set of principles to treat information like a valuable asset within the organisation, even if for one reason or another the accounting profession has not issued such guidance. To do this he suggests we should Monetize, Manage and Measure and offers some perspectives and frameworks to do so. He collates a list of examples where data has been monetized and refers to that catalogue being held on the Gartner website. (I couldn't find it..perhaps it is behind a paywall.) No matter, I have started to collate my own. Also interesting is how he suggests investors reward 'info-savvy' companies with higher valuations, including the Tobin ratio. More examples of that would be useful as it would encourage selling and buying firms to bring more rigour to their M&A due diligence. He then offers a list of frameworks which might offer techniques on Management such as Supply Chain, Knowledge Management and Human Resource Management. Finally he offers some macro and micro observations on Measurement - the status of information as an asset, and techniques for measuring its intrinsic and business value. Put together, this is a perfectly workable stepping-off point for the curious to frame further research.Re-reading this in 2021 I notice that many of the principles and proposals the book makes are making it into mainstream discussion. In the area of cyber security for example we have gone from an ad-hoc set of principles that companies struggle to respond to, to a commoditized set of processes that can be turned on in your cloud tenant. ESG scoring shows how non-financial, non-structured data can be used to compare companies against each other and against their virtual signaling. The increase in CDO roles in large and now medium sized companies shows more and more are looking to innovate their data products along with their core products. In the area I am exploring, low code 'citizen' developers should carry out their work with these principles in mind and use it as part of their business case to justify investment.This book remains the single most accessible reference and Mr Laney remains active in exploring these issues so I look forward to his next offering.

There are too many books out there that create excitement at the start but become desperately disappointing by the end. Infonomics is not one of them. In this book, Doug not only delivers volumes of actionable insights but he also neatly connects two incredibly essential ingredients for success in today's world: data and economics. This is a must read for anyone who either seeks an appreciation of data value or would benefit from the tangible gains that can be derived from such appreciation.

I highly recommend the "Infonomics" book for all levels in an organization - and for both business, finance, and technical people to absorb and adopt the concept and way of thinking. Also, it is certainly a must-read for all Chief Data Officers - or in spe - because it facilitates the talk about information as one of the most important assets, to behave like it in reality.To be truly successful in a pervasive digital transformation you need to put data and information before digitalization and make sure that the foundation is in order and solid. One core aspect of that is to treat your data and information as a corporate asset instead of just an exhaust/a cost. Only then you have a chance to gain an effective competitive edge.The key point is, that the hidden economic monetization potential of your data and information can only happen when you manage and measure (x-ray) your data in a consistent and robust way. For instance, it is mind-boggling that some airlines’ customer loyalty card data is worth more than the airline itself. Therefore, treat your data like it actually is a real asset (according to accounting standards), and this is where the book provides great interdisciplinary insights and processes of best practice of doing so.Great quote (p. 59):"As on CIO for a large insurance company recently admitted to me: It is silly that someone around here has an inventory or our office furniture, but nobody in the company has an inventory of what data we have".The outcome of following the book is the solid groundwork to become a data-driven organization.Enjoy!

I don't think I've highlighted or put as many post-its in a book before. Not much to add that others haven't but will be taking it models and applying them to help us value data and data projects that currently are difficult to quantify.

This is a phenomenal book. This is also an important book, as it successfully contextualises the value and power of data. This book is essential reading for all data professionals.