Making the most of all the data available today on an enterprise level is like trying to get from point A to point B without a map. Your company might get there eventually, but it’s unlikely you’ll have taken the most efficient route. And, if things go off course during the journey, it will be that much harder to get them back on track without a clearly outlined plan.
Here's more on what companies should include in their data strategies and why it’s so important for any organization aiming to become truly data driven.
Components of a Successful Corporate Data Strategy
Above all, an effective data strategy will support an enterprise’s overall business strategy. The creation of a data strategy helps companies spell out goals, reduce operational expenses, cut waste, decrease customer churn, optimize supply chains, minimize equipment failure, expand product offerings, optimize hiring processes and improve sales year-over-year.
An airtight data strategy must be able to answer these four questions:
What are our critical data assets?
What is our company’s data ecosystem?
How does data generate value for this organization?
How do we govern our data?
Data strategies cover the ground between business needs/goals and an action plan to make them reality. It’s also important to get input from every stakeholder involved during the planning phases — IT specialists, C-suite executives, team managers and the like. This will help ensure agreed-upon strategies work for everyone across an organization from the get-go.
Why Every Company Needs an Overarching Data Strategy
Now that we’ve established some of the foundational components of a solid data strategy, let’s examine three reasons why having one in place is so important.
1. Leverage data for decision-making
Every company under the sun can collect heaps of data. But only some organizations are able to leverage it. As Harvard Business Review writes, “Raw data, such as customer retention rates, sales figures, and supply costs, is of limited value until it has been integrated with other data and transformed into information that can guide decision making.”
It’s easier said than done, of course. HBR further reports that, on average, organizations actively use less than half of their structured data in decision making — and use less than one percent of unstructured data for, well, anything at all.
This just underscores the serious need for a strategy to enable this leveraging of data in decision-making, which is the key link between collecting data and driving measurable business outcomes with insights.
In other words, a solid data strategy is tied to specific business outcomes — making its impact demonstrable and measurable.
2. Drive adoption rates for BI tools
Getting users to actually adopt business intelligence (BI) tools has long been a challenge. But advanced BI reporting systems today empower everyone to ask questions and discover data insights in seconds. There’s no longer a need for employees to wait for IT oversight or wait on static, scheduled reports.
Having a strong data strategy helps encourage users to employ the tools they have at their disposal by connecting their routine usage with larger business and performance goals. It also encourages enterprises to think deeply about their BI platform and architecture, which can help them choose user-friendly solutions that support widespread adoption.
3. Ensure secure, smart data governance
Strategizing up front helps companies delegate data-related responsibilities and workflows. This encourages you to think about data quality, data security, privacy and ownership issues, as well as transparency and ethical data usage.
Long story short: Every company needs a data strategy because it outlines the plan for turning a potential asset (data) into desired business outcomes.