Its how companies create value from data
Every company is now a technology company. Data and technology are driving business change. Technology has made it possible to leverage data that is being generated and captured at an unprecedented rate for real-time insights, looking back a few years, we once worried about the volume of data and its storage along with the speed at which to process for generating reports on time. The Economist published an article in 2017 titled, The world’s most valuable resource is no longer oil, but data (link). It highlights a major shift. Data is revolutionizing how organizations operate, finding innovative opportunities, and raising concerns from consumers and regulators about data collection practices and use.
With the exponential growth of technology and the use of social media, IoT, mobile computing, telemetry, and digitization of business processes, companies are viewing data as a strategic asset. Companies quickly realize the value data provides for their consumption and customer engagement, retention, and competitive advantage. The importance of data will continue to grow across every area of business.
Companies could be sitting on a gold mine in terms of data they have gathered over the years and not realizing the potential through analytics & insights for business growth when no action is taken due to lack of investment, lack of strategic direction, or tech debt.
As Girish Venkatachaliah, CTO of Agilon Health puts it succinctly, “the data strategy is how you apply a set of limited resources of your company to data-related activities and use it as an underpinning of your business performance.” Not realizing the amazing potential of big data can put any organization at risk of losing its competitive advantage and eventually being wiped out. In short, an organization will not survive this decade if it does not know how to harness the data. Data will be the bedrock for every single profitable organization.
Org strategy provides a vision and roadmap of an organization’s future destination from where it is today, while data strategy supports the overall business strategy by mapping data to business functions and defines how an organization achieves those specific business goals through the strategic use of its data assets.
- Data strategy is not about selling the data but how you deliver value to your clients and partners.
- Data strategy is about deciding how you collect, process, and harness the insights from the data.
- Data strategy creates value by harnessing the data and monetization is the by-product of it.
- Each company is unique in itself even in the same sector, hence its data strategy is also unique.
Although data strategy can drive financial and non-financial business performance, data is a real problem for companies starting the journey. Data is fragmented, scattered in silos, quality, or in some cases multiple versions of the truth. To make matters worse, when organizations lack capabilities such as talent, culture, and processes, the democratization of data and the building of an ecosystem is an uphill battle.
Further reading – What’s Your Data Strategy? HBR May-June 2017. Article by Leonardo DalleMule & Thomas H. Davenport
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