What is a data strategy and why do I need one?

A lot of the work we do at DPI Consulting could be described as ‘helping clients to develop a data strategy or roadmap’ but most client conversations don’t start there even if it's where they end up! So just what is a data strategy and why should you have one in your business?

A simple way of understanding what Data Strategy is, is understanding what it isn’t:

• Recruitment of a person/team to make the problem go away

• A description of the tools/technology you are going to deploy and all the cool functionality they have

• A list of all the things you can do with data 

No, a data strategy is definitely not any of those, the problem with all of those things is that they miss the link to business value. For example: 

• Recruiting a person/team and making the problem theirs is the business absolving itself of the responsibility to engage in the process and ensure that data is driving value and solving problems in the business,

• Deploying new technology on its own won’t do anything for your business, it has to have a purpose and be linked to business processes and the people that work in the business to ensure you get the most out of it and use it in a way that helps the business,

• Just because you can do something with data doesn’t mean that you should or that it will actually help the business.

So, a data strategy is all about business value then? 

Not quite, actually I would suggest and advocate that a data strategy is:

“A description of how you will use data to deliver your business strategy, including the people, processes, technology, governance and operating model required along with a flexible plan or roadmap that you can change as business needs change”  

That's quite a mouthful so let's look at these area’s a little more closely.

Using data to deliver your business strategy

As we all know a business strategy defines what the business is trying to achieve in the medium to long term, it will typically include details of the key objectives for the business, new products the business plans to launch, how the business will acquire and retain customers, new geographies or markets the business wants to enter and so on. 

A good data strategy will consider all of these objectives and identify where data or data capabilities such as analytics or machine learning / artificial intelligence (AI) will be required or will enhance the delivery of the objective. In this way you identify what you need data for, how you will use data and also the value that this will deliver to the business. This may be referred to as the vision  and value or data use cases. Examples here might include: 

• You want to grow your customer base by 10% and ensure you retain your best customers 

• The business needs to become more efficient so that revenue grows without the cost base following suit 

• You want to launch a new product in a new market but don’t know which combination is likely to deliver the most revenue and profit

People & Operating Model

What people will you need to deliver the data use cases and how should you organise them so that they have the right connections to the business users whilst ensuring there is a data community and opportunities for career growth/advancement? This is absolutely critical in the current market where demand outstrips supply significantly.

Processes & Governance

What do you need to put in place to ensure there are clear, prioritised pipelines of work, data quality is considered and actively managed, regulatory requirements such as GDPR are considered and built into the way the business works?

Technology

Lastly, what technology do you need to make this happen? This should focus on technology and tools where a business use case cannot be delivered without it or where a tool would increase process efficiency or control to such an extent that there is a clear business case for investment.

Plan

Everybody needs a plan to work towards and data initiatives are no different. The key here is having a plan or roadmap that doesn’t require huge lead times or investment before the business starts to see value. It's also really important that the plan is flexible enough to adapt to changing business requirements.

Hopefully by now you’ll appreciate what a good data strategy should look like and how it should underpin your business strategy, that leaves the other question I asked in the title …

Why do I need a data strategy?

Did you know that:

• In excess of 300 billion emails are sent each day?

• 3.5 billion searches are made each day on Google

• Wearable devices are expected to generate 28 petabytes of data a day this year, that's the equivalent of more than 7800 128Gb iPhones!

Given these numbers you don’t need me to tell you that we are living through an age of data explosion, the world and every person and business within it is accumulating more and more data each day. Alongside this consumer and business customer expectations are changing, people now expect personalised offers, more relevant content and timing is everything. To compete in this world it's clear that businesses need to be more agile and able to make good decisions that they can rely on faster. That requires data you can trust which, in turn, requires all of the things I have talked about above. As if that was not hard enough, businesses also need to do more with the data they collect and hold and what they do has to be within the boundaries of applicable regulation.

With all that to contend with, the answer to my question is surely that your business will not prosper (maybe even survive) without a good data strategy!

If you find yourself without a data strategy and plan we are confident we can help you, why not take the first step and book a call with us?