But our firm is doing great…
Our firm is doing well, what do we need a data strategy for? Our IT department is making great progress, what do we need a data strategy for? We have hired many new data scientists and have a huge data lake, what do we need a data strategy for? What problems would a data strategy solve?
These are the questions I often get when I discuss with my clients why a data strategy is so important. Yes, your IT department is doing great. And yes, your data scientists are most probably doing a very good job (fingers crossed!), but a data strategy is so much more than that. A data strategy is there to solve the actual underlying problems.
In this article, I will talk about why a data strategy is essential for organization to have, why it is becoming more important in the current market and what problems it will solve.
Why is leveraging data becoming so important?
Before we get into why a data strategy is so essential, let’s take one step back. Why should I even start with leveraging data? To be honest, I can come up with many reasons and if you Google some reports you will find many too. However, it all comes down to those three:
- Data can be turned into information, and information into knowledge. This is not something new. This was already the case before we could print our text or when we used floppy disks. Data can become information or knowledge that can help your organization to become more effective, better serve your customers or reach new opportunities otherwise unseen or unreachable. Even though it’s not new, it’s still the most important reason why should keep leveraging your data.
- It is available for very low cost, so your competitors are already trying to turn data into knowledge. Data is everywhere and storage has become very cheap. Even the smallest companies can start collecting data and turning this into information and knowledge to better serve their customers. If you want to keep or regain your competitive advantage, make use of the data and information that is available.
- Your customers, suppliers, partners, and all other stakeholders are expecting it! Your customers expect the best service and don’t want to explain their issue to three different departments. Or even worse, they don’t want to explain what they would like to buy to three different departments. They expect that the company they are dealing with knows what he or she has told the company, and it’s very difficult to meet those expectations with the use of data.
I am already leveraging my data, what do I need a data strategy for?
In short: For the same three reasons as mentioned above. Let me explain that.
- Because it’s difficult to find information or knowledge in the huge pool of data. Although data can be turned into information and knowledge, it is often not clear what data is valuable for your organization. I see far too many organizations struggling with finding the data that is really valuable for the company and end up with a data warehouse (or any other form for that matter) where they just start to collect almost everything ‘just in case’.
- Because even though it’s cheap, it’s not free. The fact that data storage has become very cheap, it’s still not free. Hence, it doesn’t mean you should just store everything you come across! I see the organization’s that are working without a clear long-term data strategy wasting money. And a lot of ‘cheap’ data storage, is still a lot of money.
- Because you want to meet the expectations of your customers. Just collecting a lot of information and hoping for the best will not help you meet your clients’ expectations. You want to collect the information that is necessary based on the strategic business goals of your organization. Never collect data for the reason of just collecting.
To conclude, a data strategy, which should be based on the strategic business goals of your organization and keep in mind the organization’s current data maturity, should help your organization to focus on the data that is most valuable and ensures that your organization improves on all data capabilities and not just data science.
To get back to the question: What problems does a data strategy solve?
It basically solves the problem of chickens running around with their heads cut off. The running is going very well, everybody is doing a great job, but nobody knows where to run to, and everybody will choose their own direction to run to. To answer less metaphorically: It helps your employees to focus on the most valuable data and creating business value, save a lot money in data storage and wasted effort, and supports your employees to meet the expectations of your customers.
Lars van Bussel
Senior Business Consultant