There has not been an exciting time than this to talk about data. Data is everywhere, it is being called the new oil, and it has become a strategic asset. An organization’s success or failure is now quite dependent on whether it is able to exploit the business value of the data available to them.
In this blog post series, I am going to cover an approach for an organization or business to become data-driven. Why a data strategy is important? How we can align it to business strategy? Which areas to focus on to become data-driven? Which are the emerging technologies available to enable us in our data-driven journey? When to use which technology? Why data science is just a part of the whole puzzle? Why data governance is so important? How it enhances the business value of data? Which aspects of data governance are critical? Why data-literacy is important for business? How it can help building data-driven culture? I will explore all these areas and will provide answers to these questions.
What is Data-Driven?
“Data-driven means that progress in an activity is compelled by data,
rather than by intuition or by personal experience.” - Wikipedia
So becoming data-driven means taking decision based on data, using data as an input to identify areas of improvement, getting insights to fix existing problems & improve performance. The data-driven organizations collect, analyse & get insights from data to identify opportunities & solve problems.
For business, becoming data-driven is about building tools, abilities, and, most crucially, a culture that acts on data.
Why to be Data-Driven?
Earlier, decisions on improving performance or generating new products were taken either by intuition of the leadership or the experience they had of the industry. But the possibility to take feedback or insights from available data has now changed the way of doing business.
"Most organizations this desire will be to better understand one's
customers and to improve products and services." ~ Ernst & Young
"The organizations that were mostly data-driven had 4% higher productivity
and 6% higher profits than the average." ~ MIT Digital Business
"Data driven organizations are 23 times more likely to acquire customers,
six times as likely to retain those customers, and
19 times as likely to be profitable as a result." ~ McKinsey Global Institute
Over the last few years, the prominence of data has increased. While the 3Vs (volume, velocity & variety) of data have increased manifolds, recent advancements in technology (big data, analytics & cloud) have enabled many organizations to start or transform their business purely based on their ability to process & analyze available data to them.
This has challenged the traditional way of doing business. Many businesses have transformed & optimized their processes taking the feedback from data. They have shown how the data available to them can be utilized to improve customer experience & products, optimize processes, identify problems/opportunities & even monetize the data itself.
More & more organizations are now trying to do the same, they are exploring the innovative ways to collect, process & analyze data to transform their business to remain competitive or strive & thrive in their business.
Data-Driven Culture, What & Why?
"A data-driven culture is a workplace environment that employs a consistent, repeatable approach
to tactical and strategic decision-making through emphatic and empirical data proof."
Data-driven culture is about setting the foundation for the habits and processes around the use of data. Data-driven companies establish processes and operations to make it easy for employees to acquire the required information, but are also transparent about data access restrictions and governance methods.
So, why is it important to build a data-driven culture in your organization? The data can only take an organization so far. The real drivers are the people and hence building the culture around data is important. Analytics leaders must bring in the right talent, lead by example and know when not to rely on data.
How to build Data-Driven Culture?
These are the aspects which an organization can work upon to build data-driven culture:
- Promote Data Literacy: To keep business & technology teams on the same page and collaborate effectively, its really required to promote data literacy for all. Both teams should know what other team is doing and why to make the most of data-driven approach.
- Create Single-Source of Truth: To eliminate data-silos, to provide most accurate information at any given time & to democratize data access, an organization must create a single-source of truth.
- Make Data Accessible: Unless data is accessible to all employees, its impractical to expect the business to be truly data-driven. Employees should be skilled, informed & enthusiastic about using data to improve business.
- Invest in Self-Service Analytics: After doing all above, still its illusionary to assume an organization data-driven if the most the employees don't have the right tools to make the most of available data. As not everybody can be a data scientist, hence there is a need to identify appropriate self-service analytics tools to empower business users.
Above is not an exhaustive list of steps to build data-driven culture, but it’s enough business to get started and evolve in future.