Privacy megatrend: Race to own the data-value chain

Why will it happen?

Converting data into value, securely and ethically, is the business imperative for the next decade. The companies that most effectively take charge of their data life cycle will have the greatest opportunities for success. Increasing sophistication of data valuation models will help CFOs better understand how much of their revenue depends on data sourced through third parties. Better understanding of the revenue and risk of data-value chains will spur companies to race to acquire or partner with the best-valued information assets.

Nearly 75% of IT leaders in the US and the UK now rely heavily on data for business decisions, according to one survey. As data value rises, it will increasingly be targeted through corporate espionage and state-sponsored cyberattacks. Nation-states have been particularly aggressive in seeking to steal data related to the research and development, manufacture and distribution of vaccines against SARS-CoV-2. The rise of disinformation attacks will place a premium on data integrity and identity authentication. Increasing deployment of artificial intelligence, robotics and other technologies will create new data ethics risks, including those related to privacy, manipulation and bias.

What’s driving the pace of this trend?

• The value of data-intensive technology innovation.
  
• Corporate supply-chain rationalization.
  
• Adoption of data-driven business models.
  
• Digitization of direct-to-consumer experiences.
  
• Shift of business-to-business models to business-to-consumer.
  
• Prominence of the chief data officer (CDO) role.
  

How will it impact business? 

Valuations will rise for companies that create the most unique and sought-after data, business intelligence and responsible data-generating technologies. These companies will become targets for acquisition or partnerships. Acquirers that become adept at due diligence assessments of these companies’ value and risk are most likely to land affordable financial arrangements and gain first-mover competitive advantage.

What should CEOs do?   

• Direct business heads and CDOs, CMOs, CIOs, chief privacy officers (CPOs) and CISOs to execute a data-value-chain strategy and a dynamic inventory of information assets.
• Forge a global position on data and technology ethics aligned with the company’s values.
• Assign the CFO to create a data valuation model that incentivizes responsible data monetization and risk mitigation.
• Drive strategic acquisitions, alliances and organizational operating-model adjustments around the executive team’s data strategy.