Why Companies Need a Data Strategy
In 2020 alone, more than 64.2 zettabytes of data were created, collected and processed. To give you an idea, a zettabyte is equal to a trillion gigabytes, and the average memory of most phones is around 64GB.
Given that we're already dealing with trillions of GBs of data, we can safely say we're fully immersed in the era of data.
That in itself is extraordinary since 90% of the world's data has been created in the last two years alone.
This expanse of information is an unprecedented opportunity for companies to access customer information they never dreamt of having in the past. At first glance, this is all good news. Still, many businesses often become overwhelmed by the sheer volume of data and end up experiencing data more as a problem than an opportunity.
Think of it like building a house and having all the materials delivered at once on your newly bought terrain. It's challenging to work on your dream home when so many things block your vision and decision-making capability.
In the case of data management and processing, the end goal is turning some of that knowledge into information that facilitates decisions instead of delaying them. But, of course, not all information is equally relevant or correct. What businesses need is clarity. The blueprint is a data strategy and an execution plan that links the company's vision, operations, and data it gathers.
A Data Strategy fosters Execution
Many CEOs struggle not with setting out the vision of the organisation but with executing it.
Communicating and embedding a strategy right down to having everyone in the team know which part they play is by far the most challenging obstacle to overcome. If you also add to this the volumes of data generated in the mix, you have a recipe for slow growth and bad decisions.
It's paramount that companies map out a plan (i.e., data strategy) that aligns with the customers, product and business model. When a data strategy is strategically planned and implemented, organisations gain a powerful tool that helps them use their data as leverage for growth and informed decision-making and have a clear picture of their product's impact on the market.
Without a clear data strategy, information gets lost among the many dashboards that don't indicate how to apply the data to everyday activities and initiatives. In addition, the organisation's mission, vision, goals, and strategy become separate from the KPIs and metrics. This misalignment causes departments to look at their individual metrics and come up with personal conclusions, disrupting how any business works.
"A data strategy allows you to take your product, market it better, develop it better, use it to improve customer service, or get a 360-degree understanding of your customer. Data strategy is driven by your organisation's overall business strategy and business model." Donna Burbank – Global Data Strategy Ltd.
So, what is a Data Strategy?
A data strategy enables informed decision making, which is vital for any future-driven company. A well-defined and structured data strategy also helps ensure that data is managed correctly and used as an asset.
A data strategy takes a holistic view of a company, its vision, and how it conducts its operations and uses its data to clearly show how customers interact with the product or service. It also provides a clear set of goals and objectives across the company projects and assures that data is used effectively and efficiently.
Using this as the baseline, once this information is collected and the teams are aligned, a business can adapt their product to what the market needs today instead of selling something that might be in demand later.
When Should You Implement Data Strategy?
Although it is never too late, the bigger the company, the greater the volume of data it collects and processes and the harder it is to implement a data strategy. Nevertheless, the effort is definitely worth it.
A data strategy forces a company to organise data around:
- the business model and strategy
- the product/service,
- the ideal customers and their journey
In addition (and by far the most important), it aligns the entire business (and teams) with the business's overall objectives.
Do Organisations Need a Data Strategy?
A resounding YES!
No matter how big or small an organisation, having data aligned with the business model and strategy is paramount to success in an era of information overload.
Whether you are a start-up with a team of 1 or 2 people or a global conglomerate of thousands of employees, prioritising time to establish, implement and maintain a data strategy is by far one of the best investments your organisation can make. But, of course, it's not a one-time exercise either, but a continuous iteration of people, process and data improvements.
To thrive in the era of BIG Data, companies need to organise their data and information to facilitate decision-making and give them leverage for growth instead of delaying them. It's not an easy task, mainly because this involves a significant change in underlying processes and culture. Nonetheless, it is essential for businesses in this information era.