[glossary_exclude]Doug Laney is vice president and distinguished analyst with the Gartner Chief Data Officer (CDO) research and advisory team. Doug researches and advises clients on information monetization and valuation, open and syndicated data, analytics centers of excellence, data governance and Big data-based innovation. He is the author of Gartner’s Enterprise Information Management Maturity Model and is a two-time recipient of Gartner’s annual thought leadership award.
Finding new value in information is a key aspect of Information Governance, so we were quite interested to learn more about Doug and his work.
InfoGov World: Where did you grow up? Go to school?
Doug: I grew up in Deerfield, Illinois, a suburb about 30 miles north of Chicago. Walgreens, Astellas Pharma, Baxter Labs, Fortune Brands, and now Caterpillar are headquartered there. Sara Lee’s bakery used to be there, so the town often smelled of cakes when I was young. I wanted to study math and computer science. Since the University of Illinois was a top school in the field and only $600 tuition per semester at the time, there was no question that’s where I was headed. But after having spent four years in junior achievement, I was really more interested in the business side of computing, so I designed my own curriculum and graduated with a degree in business administration and computer science. Subsequently, the curriculum was adopted as a formal offering.
What are your responsibilities at Gartner?
I’m one of a couple thousand IT industry analysts at Gartner. We’re expected to be the eyes, ears, and thought leaders in our respective corners of IT, publishing, speaking, and advising IT and business leaders on enterprise technologies, best practices, etc. I’m with Gartner’s Data & Analytics research and advisory team, a collection of some of the most brilliant folks in the field I’ve ever met.
How do you define Infonomics?
Infonomics is the concept and practice of treating information as an actual corporate asset. Everyone talks about information as one of their organization’s most critical corporate assets, but scant few actually behave as if it is. That is, they don’t monetize, manage, or measure it with nearly the same discipline as their physical or financial assets––or even their human capital. In fact, most companies treat their office furniture with greater asset discipline than their information. Why? Perhaps because even in the midst of the Information Age, the accounting profession refuses to recognize information as a balance sheet asset. Yet, information easily meets the criteria established for being recognized as an asset.
When did you first discover Infonomics and how has your interest in Infonomics evolved?
I had always just assumed information was an asset and considered a form of property. But after the 9/11 terrorist attacks, some clients in the Twin Towers lamented to us not only the tragic loss of life, but also the loss of their data. Remember, this was in the days before the cloud when many maintained onsite backups. Naturally, these businesses contacted their insurance companies, who wouldn’t honor the claims arguing that electronic data wasn’t a type of property covered by their P&C policies. This led me to crack open my old accounting textbook to learn just what the definition of an asset is. Hint: information meets all the criteria of one. Then I popped onto the online financial database EDGAR to inspect some balance sheets, particularly those of data brokers and such. To my surprise, the value of the hardware their data sits on is recognized as an asset, but not the data.
This, I thought, explains why organizations fail to manage their information well. They don’t measure its value. You know the old adage: ‘You can’t manage what you don’t measure.’ I also think it follows that you can’t monetize what you don’t manage. And this explains why so much information goes unutilized.
Over time, my colleagues and I have developed and adapted models for measuring information’s value––in a variety of ways for different purposes. Also, we have explored how to manage information as an actual asset by applying asset management approaches from other fields. And we have laid out approaches to monetizing any information asset that takes advantage of its unique economic properties. Finally, we have begun exploring how traditional economics concepts––like supply and demand, marginal utility, pricing and elasticity, and others––must be tweaked to be applied to information assets.
Measure the difference between the potential and realized value of key information assets, then set upon a journey to close the gap.
What or who are some of the major influences in developing your theories about Infonomics?
In the 1960s, University of Chicago economist and future Nobel laureate Gary Becker devised the concept of “human capital.” Before that time, labor was just an expense, not really something to be managed or optimized. His ideas gave rise to the modern HR department and ultimately the chief human resource officer. Thankfully, due to the Fourteenth Amendment and similar anti-slavery laws in other countries, you can no longer own people. So, today a company cannot account for employees as assets, but that hasn’t stopped organizations from accounting and managing them like one internally. I think there are a lot of parallels here to information assets. Yet, as I mentioned, information does meet the criteria of a formal accounting asset. Other key influences on the topic: the renowned “father of the data warehouse concept” Bill Inmon; analytics thought leader Tom Davenport; data governance giant John Ladley; famous educator and author Paul Strassmann (who struggled for decades to value IT); and Claude Shannon, the 1930s father of information theory. And the Infonomics concept has benefited immensely from the collaboration of numerous Gartner colleagues.
What changes and trends in Infonomics have you seen in the last year?
Since the book was published, it seems most organizations are now seriously strategizing about how to generate greater economic benefits from their (and other) information assets. Some even have robust data monetization initiatives. There also seems to be more chatter about the possibility of recognizing and reporting on information on the balance sheet, but I think that’s still many years away. [Note: The Financial Accounting Standards Board (FASB) convened a group in 2016 to study this issue.]
Lately, clients request meetings every week about how to help them quantify their information. And Gartner Consulting has done numerous Infonomics-related projects for both commercial and public sector organizations.
What skill sets are needed for someone to become an expert in Infonomics and leveraging info assets?
The surprising answer to this is that these skills already exist in droves, but in other disciplines. There are experts in physical asset management, financial asset management, human capital management, accounting, economics, product innovation, and product management. Chief Data Officers and other leaders need to find these people and apply their skills to their organization’s information assets.
What advice would you have for companies wanting to manage and monetize their information assets?
Measure them. Measure the difference between the potential and realized value of key information assets, then set upon a journey to close the gap. Once business leaders and executives clearly see how much money they’re leaving money on the table, these initiatives will gain support and momentum.
What hobby or special skill do you have that might surprise your colleagues?
Competitive tennis, non-competitive golf, biking, and cooking are my things. Other than that, I juggle, can talk like Donald Duck, teach junior achievement at grammar schools, and have a collection of hundreds of wind-up toys. Nothing that out of the ordinary!
What is the best vacation spot you have found?
I’ll never tell. It’s serene and secluded and I want to keep it that way. Sometimes, too much information is a bad thing.
The INFOrmation: Doug Laney
Doug Laney is a senior analyst and advisor with Gartner’s Chief Data Officer research group. He is an accomplished practitioner and recognized authority on information and analytics strategy. Doug researches, publishes and consults to senior IT and business leaders on data monetization and valuation, open and syndicated data, data governance, and big-data based innovation. In the 90’s he coined the “3Vs” of volume, velocity, and variety, now commonly used in defining Big Data. More recently Doug helped launch and manage the Deloitte Analytics Institute, has guest-lectured a major business schools, and has been published in the Wall Street Journal, Forbes, and the Financial Times among other journals. Upon returning to Gartner he researched and published the book, Infonomics, which has been selected by CIO Magazine as a “must read” book of the year. And next year Doug will begin teaching a graduate level business course on Infonomics at the University of Illinois.[/glossary_exclude]
Robert F. Smallwood, MBA, CIP, IGP, is a thought leader in Information Governance, having published seven books on IG topics, including the world's first IG textbook which is being used in many graduate university programs as well as to guide corporate IG training programs.