The amount of data and the rate at which it’s being accumulated is rising exponentially
Between 2018 and 2025 the size of real-time data in the global datasphere is expected to expand tenfold, from five zettabytes to 51 zettabytes (1021 forecast to grow at 40% each year over the next 5 years).
Despite the many challenges presented in managing an influx of information of this size, it’s clear that data has increasingly become a critical asset in helping businesses thrive. And there’s a strong desire to take advantage of the opportunities data allows in pursuing better customer and financial outcomes.
However, recent research from Experian revealed that although 85% of organisations see data as one of their most valuable assets, most companies are in short supply of meaningful insight and a lack of understanding is hampering success.
While it’s easier said than done in many cases, implementing an effective data strategy can help you grow your business by understanding what your data is telling you, and acting on it.
Though companies are investing in data and certainly in analytics, most still do not consider themselves to be data driven. When we look at why this is, we see a few key reasons for this disconnect.
First, organisations need to make sure that their data is fit for purpose and has a high degree of accuracy. Poor quality data will lead to a suboptimal data operation, which will prevent the business seeing the ROI or expected benefit from some of the data investments it is making. This acts as a major drag in the process of moving towards an organisation that puts data at the heart of its operation.
Data debt, meaning that they have a set of data assets that aren’t fit for purpose, is also starting to become as big a problem as technical debt.
Secondly, organisations need to ensure the data literacy of their people. They don’t need a raft of data professionals, but they do need individuals that can access, understand, and argue with data.
Thirdly, organisations need to build a culture of data ownership and accountability. Business users need to be responsible for the data they own and for improving it. This, in turn, encourages investment into employing the right systems, controls, training, and feedback mechanisms to ensure data accuracy does not erode over time—increasing the overall trust in data. Assigning goals and metrics related to the overall hygiene of the data estate can help enforce this.
Rise of the Chief Data Officer
Unlike property (controlled by Facilities) or money (controlled by Finance), data is an asset which has unclear or at best confusing ownership. This can obviously lead to delays in gaining insights and a lack of trust in data.
Over the years, data ownership has often varied between a ‘centralised with IT model’ and a disorganised ‘each department for themselves model’. We are starting to see a definite shift to a more organised, yet decentralised model, with a central governance function being put in place. This enables and supports every other function within a business to take more control of the data they need.
This shared risk and responsibility model, when implemented well, helps to manage risk and empower the business at the same time. It also frees up IT departments to focus on the enabling infrastructure, rather than the quality of the data flowing through it.
Putting a Chief Data Officer in place is a visible sign that organisations are investing in data and are more likely to drive a data strategy that will support this business intent.
If not, even under a decentralised model, other decision makers within the business may not be clear on why investing in the fundamentals, such as operational data quality, is the only way to get the most value from advanced analytics and other data-enabled innovations.
Return on data investment
While most organisations are already getting value from their data, are they measuring that value in relation to success metrics that matter most to the business?
Data initiatives often fall short because a poor story is told around the success of data and what it means to the business. Very few organisations have the skills to prove the ROI of data initiatives in the context of real business value, like customer satisfaction, revenue or operations excellence.
Stakeholders need to be able to demonstrate value and ROI early on in a data or analytics project with any data initiative clearly tied back to the business strategy, performance indicators, and critical outcomes.
With data literacy now such an imperative, strategies should reflect the requirement to widen access to data and decision-making power to the right people with the policies, skills, and technology in place to support them.
While we want, and frankly, need to do more with data, practitioners are not going to reach their desired state of informed data outcomes until they address issues like data debt and the data skills shortages.
It is important to remember that change will not happen all at once. As with anything, creating a project that tries to solve every scenario and every situation will often stall and not generate the expected benefits. The good news is that with data it is about finding the quick wins that will make a big difference within the business.
Stakeholders don’t have to master all of their data or achieve 100% accuracy to generate value. They need to find the information that matters most and start to make small improvements with small investments. Then, those quick wins will start to generate interest, belief and lead to bigger and better improvements.
While analytics and insight are the dream, organisations have to make sure they are getting back to basics first, investing in the data talent, technology and processes that are going to allow them to build trusted data sources that can enable operations in today’s digital economy.
About the Author
Jonathan Westley, Chief Data Officer at Experian. Experian unlocks the power of data to create opportunities for consumers, businesses and society. We gather, analyse and process data in ways others can’t. We help individuals take financial control and access financial services, businesses make smarter decision and thrive, lenders lend more responsibly, and organizations prevent identity fraud and crime.
Featured image: ©JamesTeoHart