The Data Dilemma
A recent post looked at the many opportunities available to firms who capitalize on the abundance and ease of data. To maximize these efforts, firms must also learn how to maintain control over quality and value.
Accuracy of data
An article on a digital media industry site points out that in the world of big data, cooking the data is the new cooking the books. As the barriers to obtaining data fall, the new challenge is getting real data. Statistics can be counter-intuitive and inaccurate analysis may be difficult to spot. As more and more people jump into the game, the chance of errors increases. Forward thinking minds are needed to solve the dilemma of how to keep data both open and transparent yet accurate, perhaps through legal or industry-specific regulation.
Valuing Data
It’s difficult to establish value for data that may or may not be accurate. For both buyers and sellers of data, its value, whether perceived or real, can be challenging to ascertain. An article in the New Yorker gives an insightful look at the debate over the value of data. On one hand is the philosophy that “information wants to be free.” And that is a good thing. Embracing “’free’ involves moving from a “scarcity” mind-set to an “abundance” mind-set. Giving something away means that a lot of it will be wasted. But because it costs almost nothing to make things, digitally, we can afford to be wasteful. In the past we had to worry about how to allocate scarce resources like newsprint and shelf space and broadcast time but not anymore.”
On the other hand, in real business there are prominent contradictions to this theory. Free broadcast television is struggling, for example, while premium cable, with its monthly fees, is not. Apple may soon make more money selling iPhone downloads (information) than it does from the iPhone itself (tangible good). It may be too soon in the digital to say with certainty which model will prevail, presenting a risk to firms trying to developing a data pricing or purchasing strategy.
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