Is Data Really the New Oil in 2024?

This is the 21st century, the information age where data has its own space to rule. Let’s go back to the 18th century when oil was the primary, widely sought-after asset.

Similar to oil, data has become a valuable prospect today. However, few can analyze the fundamental aspect of data in the digital economy. If you look at the dynamics, performing any task today is much easier compared to how it was eons ago.

Ever since it was declared back in 2017 by The Economist that data is the new oil, it has become eminent that it has become the most valuable resource. In 2006, Humby coined the phrase ‘data is the new oil.’ It became Clive Humby data is the new oil phrase.

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Let’s explore the reasons better.

Data Is The New Oil: Meaning

The burning discussion of data being the new oil has created space for plenty of discussions. Data helps to create insights that yield valuable results as well as helps companies make more efficient and organized decisions. This in return helps to build a better strategy.

Big data companies thrive on this data. Tons of data are created on an everyday basis that help in making impactful business decisions that ultimately influence industries. Every sector of work including education, banking, fashion, clothing, tourism, etc., makes the most of data.

The notion of “data is the new oil” relates to the importance of two of the most valuable resources we have today. Raw data is of no use on its own. However, true value addition is possible when data is gathered daily, accumulated together, and connected with other data that is relevant and significant.

Refining data and isolating are mammoth tasks, and the conversion of data to a decision-making tool is what stretches it a long way. Stating the statistics, the pandemic has led down the way data worked before. Not only has quality data lost its momentum, but the value has also been deprecated. 

Let’s be honest on the part that we are facing today, where inflation, economic condition, and recession are taking over; the demand for data has increased even more.

Importance of Data

How exactly does data serve the exact purpose of a resourceful asset called oil?

The pandemic gave birth to plenty of challenges, and data was one of the solutions. Organizations and corporations worked only on data to make decisions that will help them survive in a constantly shifting market. To embrace the business model and work at a record speed, there were business models that were digitally optimized to ensure everything happened with due diligence.

The Need for Data Management

Any company capable of using data to transform it into valuable insights is doing the maximum it can to extract crucial information and function. Decision-making processes when backed with meaningful data create a positive impact on the company or organization. Data privacy and data governance make the most of data that not only boost a company’s revenue but also ignite profit and growth. 

Data governance explains the various processes, policies, roles, and standards to benefit the maximum from data and to understand it is being used well enough. Moreover, data governance also implies the kind of action that can be taken based on the kind of data provided.

Eliminating meaningless Data

In general, more data doesn’t signify its equivalence to better or legit information. Data is easy to be manipulated, and one data can affect the way other data works, especially if they are co-related. 

When there is an enormous mountain of data, it doesn’t mean being resourceful. However, keeping, maintaining, and documenting it can add much more to its value. 

Therefore, large chunks of data could prove useless if their accuracy and completeness don’t fall through. In rare cases, it could lead to several wrong decisions that could impact so many businesses negatively. 

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Decoding the Metaphor

Regardless of where the phrase, “Data is the new oil” came from, there is certainly room for adding some valuable merit to it. Data as a resource is valuable but does the value remain intact if they are molded in a certain way?

Let’s analyze the phrase:

Refined data:

Data in its usable format is the standard way to use it, just like oil. Crude oil can be converted to petroleum oil for refineries to use them. Similarly, raw data should be refined in such a way that it is easy to use for statistical purposes and otherwise. There could be a minor or major flaw in the data that flows downstream from business analytics.

• Raw data might miss essential chunks of information.
• It is not possible for all raw data to be used for predictive analysis.
• Data is of no use until refining removes all factual inaccuracies.

Quality data:

The phrases “Data is the new oil” and “Analytics is the combustion engine” were coined by Sondergaard accurately. The AI that is being used today needs humongous data to operate, automate tasks, and build a mechanism as an exact replica of that of humans. 

AI and analytics are the only two places where we can expect to understand the value of data. Consider millions of feedback from customers. What is the use of this feedback if it generates nothing? How relevant is the data in it? However, if a system understands the feedback and ships it off to the relevant department, then the value of these millions of feedback will skyrocket.

Why is data important?

Helps to make informed decisions

The data brings a lot of clarity and accuracy to the process. A well-put data helps in getting evidence into the system, thus allowing the users to make transparent and informed decisions as they have measured the pros and cons of the data. Data drives industries, and they are required to make sense of this data, which is why data is a new oil.

Identify the problems early

The data allows us to keep track of the progress and health of the systems earlier. Organisations can take up measures to mitigate the risks at a much early stage. Working correctly with the data allows the users to identify the problems and make the organisations proactive rather than reactive. This is why data is the new oil.

Helps in getting the desired results 

Data is the new oil meaning that it allows organisations to measure the effectiveness of the process. Working correctly with the data will enable individuals to implement the right strategies. Identifying how well the data and the plan is performing and affecting the organisation’s growth can be measured. 

Helps in finding solutions to the problems

The organisation undergoes various phases, and facing problems is one of those. The data assists in visualizing the data into diffraction patterns and issues such as location, systems and departments. Working with the data allows the users to find the solutions to the problems and helps the organisation save time and put effort into doing something productive. 

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Conclusion

Data has the ability to transform the world, and companies are capable of changing the way it works for their benefit. However, the trend will increase in the coming future. To know more about data, it is best to get to the bottom of it through Data Analytics courses from upGrad, which are the best ways to kickstart your data science journey. 

If your answer to whether data is the new oil is justified in the context mentioned here, you can dive deep into the concepts of understanding data more by roughly analyzing it.

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