Why is data called the new oil?

Data is the new oil. I have heard that phrase over and over. In general, I understand that data is very important in today’s times. How many tech companies are valued just because they own lot of critical data. So other than data fueling the digital world, what else makes data comparable to oil.

I got the best explanation on Al Martin’s pod cast. He made it simple. Here is what I learnt: Like crude oil, there are abundant reservoirs of data in enterprise systems. Large silos of structured and unstructured data are hidden in large databases, emails and social media feeds. We need to extract the data just like we drill oil from oil mines. The process is called ‘Data Discovery’. Data discovery is the process of collecting data from various databases and consolidating it into a single source that can be instantly evaluated.

Crude oil is not useful as such. True power of oil is achieved when it is processed in refineries. The refined oil is free of impurities and is invaluable. Same way, we have to refine data to uncover its power. The process is called ‘Data Refinery’. The data refinery implies transforming large amounts of raw data into consumable, quality information that is ready for analytics. Data refinery makes data consumable.

While refined oil is ready to be consumed, it is highly inflammable. Special security protocols are put in place to handle the hazardous oil. You need to follow the similar protocols to transport and use the refined data. There comes data security and data governance. Data governance is the process of managing the availability, usability, integrity and security of the data in enterprise systems, based on internal data standards and policies. Effective data governance ensures that data is consistent and trustworthy and does not get misused.

Now when we have refined, organized and secured data, we can leverage its immense power to fuel the information revolution. It can be used to feed the AI models and ML algorithms to drive innovation. Here it is just like oil; we have to mine, refine and transport data and that’s when data is ready to power the smart digital world.

IBM Cloud pak for data offers comprehensible cloud native solution to leverage the power of data at one place. It provides single platform to discover, refine, analyze and govern data. You can build AI models and instill innovation to support digital transformation in your business.

Check out more about IBM cloud pak for data: https://www.ibm.com/products/cloud-pak-for-data

Disclaimer: Content is influenced from different podcasts and multiple sources.