Digital transformation is creating even more data for organizations to manage effectively. Here’s how to find the intelligence needle in the data haystack
Data and analytics transform how companies across all industries identify and act on opportunities to gain a competitive advantage. But many organizations are discovering that ever-growing volumes of the former make the latter increasingly difficult. They struggle to turn raw data into a strategic asset that informs decision-making and accelerates growth. Overcoming that struggle requires conceiving and implementing an effective data transformation initiative. Fortunately, there are three steps to implementing sustainable initiatives that any company can follow, no matter its maturity or size.
But before taking the first step, it is vital to secure the commitment at the board and management levels that the initiatives will be a companywide priority. That is critical to ensuring the allocation of adequate resources and budget dollars at the outset. Failure to secure senior leadership’s enthusiastic support will impede progress if not completely derail the entire project.
You might not think that would be a difficult sell. But research firm KPMG found that the opposite is true when it examined the fundamental role data analytics will play in the financial services sector over the next 10 years:
“(Many CEOs are) responding incrementally and, at best, tactically with better front-end digital services for customers or process improvements in the back-office. But they’re not addressing the more fundamental issue – that their very business model will need to change. And fast.”
If you encounter resistance, here’s the crux of your argument: Your company is a data company. It doesn’t matter if you sell software, cars, clothing, food or any other product or service; the ever-growing volumes of data you’re collecting inform all business decisions. Or at least, they should.
Curt Hopkins, editor in chief for Hewlett Packard Labs, summed up this point perfectly: “Data has become the new gold that backs the value of companies, though it is a gold that companies must locate, mine and refine before spending. Business has shifted from making things to knowing things, so realizing usable data is the order of the day if a company wants to remain profitable.”
Step 1: What Data Do You Have?
Once you have secured the full support of management, you’re ready to take the first step to launch a data transformation initiative: gain an understanding of precisely what you have and where it “lives.”
Take the time to conduct a thorough exploration of all your raw data sources and where those volumes are stored—likely some combination of individual users’ laptops and other devices, on-premises systems and in the cloud (public, private or hybrid).
Next, determine who has access to your data and how. If you decide to work with an analytics services provider, do you have the necessary extraction processes in place to deliver raw data to your partner? If not, you will need to build that pipeline or move the data into a cloud-based analytics database.
Step 2: What Do You Want to Accomplish?
Once you know what you have and where it is across your organization, the next step is to formulate your initiatives based on your objectives. Classifying all datasets under two broad categories—internal use or external use (i.e. commercialization)—will help narrow down the relevant data for a specific campaign.
Embed responsibilities for secure data handling and usage across all parts of the organization—don’t put them only on the technology teams’ collective shoulders. Assume you will need to organize, transform and enrich data to realize its full value. Remove any barriers to sharing data under NDA and considering a nuanced build-versus-buy approach. Finally, ensure the initiatives map to management by objectives (MBO) to maintain a focus on using data to help the company achieve its business goals. At this point, you’ll need to answer the build-or-buy question to determine if you have these transformation capabilities internally or need to find them externally.
Step 3: How Will You Track Progress and Evaluate Outcomes?
After executing the data initiative, you should regularly measure its outcomes. Hold your teams accountable by setting time-based goals and tracking progress versus plans. Anticipate the need to iterate because harnessing data is a fluid process. Create and maintain a dictionary to keep employees and teams aligned as they progress on their tasks and projects.
One additional and no less critical consideration is to ensure you strike a balance between gaining the ability to use data assets with protecting them from security threats, both cyber and physical. According to “The Cost of Insider Threats Global Report 2020” by IBM and the Ponemon Institute, the average cost to recover from a breach is between $3 million and $4 million, and that does not account for the loss of customer trust and brand loyalty. Protecting customer and employee personally identifiable information (PII) and all other sensitive data types and complying with all data rights agreements is paramount.
Fifteen years ago, British mathematician Clive Humby famously proclaimed, “data is the new oil,” and the analogy holds up today. Like the raw crude that comes out of the ground, raw data only represents potential value. Just as oil has to be refined into fuel to become useful, data must be analyzed and refined to become functional.
By understanding your supply of raw data, formulating your initiatives and executing and measuring those initiatives, you will be better able to identify opportunities and make more informed decisions that give your organization a competitive advantage.
