To Succeed, Your Business Strategy Requires Complementary Data Strategy.
If you are responsible for developing your organization’s data strategy, do you know and understand your organization’s business strategy? If not, how can you be sure that your resulting data strategy will fully support the business strategy? If it does not, it may lead to a loss of customers, more inefficiency, lost profit, and more.
What is Strategy?
According to leading strategic advisor Mark Daniell, “Strategy is the art and science of informed action to achieve a specific vision, an overarching objective or a higher purpose for a business enterprise.” The goal of any data strategy is to make it easier for everyone in the organization to make better decisions. We refer to that today as “data-driven decisions.” For a data strategy to be effective, it must complement and enhance the business strategy. To develop that effective data strategy, an organization initiates the process with an analysis of existing maturity and capabilities. You may have a clear vision of the destination of your journey to best-practice data management, but if you are unclear on your starting point, then you reduce your chances of achieving your goals.
According to John Roberts in his book, “The Modern Firm: Organizational Design for Performance and Growth,” for a strategy to be effective, it should satisfy four specific criteria:
· it expresses specific goals;
· it delineates a specific scope;
· it describes the advantage sought after; and
· it articulates why the strategy is achievable.
What is a Data Strategy?
A data strategy is intended to stimulate motivation that centers around the use of organizational data assets in support of that organization’s business strategy. It will be the highest level of guidance available to an organization, focusing data management activities on articulated data management goal achievement and providing directions and specific guidance when faced with a stream of decisions or uncertainties about organizational data assets and their application toward business objectives.
Developing and maintaining an organizational data strategy should be the primary focus of those who lead these efforts in their respective organizations. Typically these days, that will be the Chief Data Officer (CDO) or someone with the equivalent title.
Even in 2019, many organizations do not view their data as an organizational asset. Many view it as owned and therefore, the responsibility of “….the I.T. Department….”. Data is every organization’s “single, non-depletable, non-degrading and durable strategic asset.”
· Data assets cannot be depleted. Data’s greatest value comes from not just being used but being reused.
· Data assets do not degrade over time. Digital assets, when properly maintained, do not degrade over time like other organizational assets.
· Data assets are durable. They can generate flows of goods and services over time.
· Data assets are strategic. They must be maintained by the organization to achieve future outcomes.
The above four characteristics are what make data unique among organizational assets. Organizations that do not recognize and support the concept of data being an organizational asset will often fail to leverage those assets with any repeatable and documented processes, thereby losing productivity, not eliminating inefficiencies and possibly losing customers, revenue and profits. These organizations will often spend far too much on information technology investments versus properly applying data-centric means of enabling their knowledge workers to use and exploit their data assets.
If you would like to learn more about this topic, we encourage you to download our free pdf file of Chapter-1 from “Data Strategy and the Enterprise Data Executive – Ensuring That Business and IT are in Synch in the Post-Big Data Era” by Peter Aiken and Todd Harbour.