Build a Robust and Comprehensive Data Strategy

Build a Robust and Comprehensive Data Strategy

Key to building and fostering a data-driven culture.

ANALYST PERSPECTIVE

Data Strategy: Key to helping drive organizational innovation and transformation

"In the dynamic environment in which we operate today, where we are constantly juggling disruptive forces, a well-formulated data strategy will prove to be a key asset in supporting business growth and sustainability, innovation, and transformation.

Your data strategy must align with the organization’s business strategy, and it is foundational to building and fostering an enterprise-wide data-driven culture."

Crystal Singh,

Director – Research and Advisory

Info-Tech Research Group

Our understanding of the problem

This Research is Designed For:

• Chief data officers (CDOs), chief architects, VPs, and digital transformation directors and CIOs who are accountable for ensuring data can be leveraged as a strategic asset of the organization.

This Research Will Help You:

• Put a strategy in place to ensure data is available, accessible, well integrated, secured, of acceptable quality, and suitably visualized to fuel decision making by the organizations’ executives.
• Align data management plans and investments with business requirements and the organization’s strategic plans.
• Define the relevant roles for operationalizing your data strategy.

This Research Will Also Assist:

• Data architects and enterprise architects who have been tasked with supporting the formulation or optimization of the organization’s data strategy.
• Business leaders creating plans for leveraging data in their strategic planning and business processes.
• IT professionals looking to improve the environment that manages and delivers data.

This Research Will Help Them:

• Get a handle on the current situation of data within the organization.
• Understand how the data strategy and its resulting initiatives will affect the operations, integration, and provisioning of data within the enterprise.

Executive Summary

Situation

• The volume and variety of data that organizations have been collecting and producing have been growing exponentially and show no sign of slowing down. At the same time, business landscapes and models are evolving, and users and stakeholders are becoming more and more data centric, with maturing and demanding expectations.

Complication

• As organizations pivot in response to industry disruptions and changing landscapes, a reactive and piecemeal approach leads to data architectures and designs that fail to deliver real and measurable value to the business.
• Despite the growing focus on data, many organizations struggle to develop a cohesive business-driven strategy for effectively managing and leveraging their data assets.

Resolution

Formulate a data strategy that stitches all of the pieces together to better position you to unlock the value in your data:

• Establish the business context and value: Identify key business drivers for executing on an optimized data strategy, build compelling and relevant use cases, understand your organization’s culture and appetite for data, and ensure you have well-articulated vision, principles, and goals for your data strategy.
• Ensure you have a solid data foundation: Understand your current data environment, data management enablers, people, skill sets, roles, and structure. Know your strengths and weakness so you can optimize appropriately.
• Formulate a sustainable data strategy: Round off your strategy with effective change management and communication for building and fostering a data-driven culture.

Info-Tech Insight

1. As the CDO or equivalent data leader in your organization, a robust and comprehensive data strategy is the number one tool in your toolkit for delivering on your mandate of creating measurable business value from data.
2. A data strategy should never be formulated disjointed from the business. Ensure the data strategy aligns with the business strategy and supports the business architecture.
3. Building and fostering a data-driven culture will accelerate and sustain adoption of, appetite for, and appreciation for data and hence drive the ROI on your various data investments.

Why do you need a data strategy?

Your data strategy is the vehicle for ensuring data is poised to support your organization’s strategic objectives.

The dynamic marketplace of today requires organizations to be responsive in order to gain or maintain their competitive edge and place in their industry.

Organizations need to have that 360-degree view of what’s going on and what’s likely to happen.

Disruptive forces often lead to changes in business models and require organizations to have a level of adaptability to remain relevant.

To respond, organizations need to make decisions and should be able to turn to their data to gain insights for informing their decisions.

A well-formulated and robust data strategy will ensure that your data investments bring you the returns by meeting your organization’s strategic objectives.

Organizations need to be in a position where they know what’s going on with their stakeholders and anticipate what their stakeholders’ needs are going to be.

Data cannot be fully leveraged without a cohesive strategy

Most organizations today will likely have some form of data management in place, supported by some of the common roles such as DBAs and data analysts.

Most will likely have a data architecture that supports some form of reporting.

Some may even have a chief data officer (CDO), a senior executive who has a seat at the C-suite table.

These are all great assets as a starting point BUT without a cohesive data strategy that stitches the pieces together and:

• Effectively leverages these existing assets
• Augments them with additional and relevant key roles and skills sets
• Optimizes and fills in the gaps around your current data management enablers and capabilities for the growing volume and variety of data you’re collecting
• Fully caters to real, high-value strategic organizational business needs

you’re missing the mark – you are not fully leveraging the incredible value of your data.

Cross-industry studies show that on average, less than half of an organization’s structured data is actively used in making decisions

Organizational drivers for a data strategy

Your data strategy needs to align with your organizational strategy.

Main Organizational Strategic Drivers:

1. Stakeholder Engagement/Service Excellence
2. Product and Service Innovations
3. Operational Excellence
4. Privacy, Risk, and Compliance Management

“The companies who will survive and thrive in the future are the ones who will outlearn and out-innovate everyone else. It is no longer ‘survival of the fittest’ but ‘survival of the smartest.’ Data is the element that both inspires and enables this new form of rapid innovation.” – Joel Semeniuk, 2016

A sound data strategy is the key to unlocking the value in your organization’s data.

Data should be at the foundation of your organization’s evolution.

The transformational insights that executives are constantly seeking to leverage can be unlocked with a data strategy that makes high-quality, well-integrated, trustworthy, relevant data readily available to the business users who need it.

Whether hoping to gain a better understanding of your business, trying to become an innovator in your industry, or having a compliance and regulatory mandate that needs to be met, any organization can get value from its data through a well-formulated, robust, and cohesive data strategy.

According to a leading North American bank, “More than one petabyte of new data, equivalent to about 1 million gigabytes” is entering the bank’s systems every month. – The Wall Street Journal, 2019

“Although businesses are at many different stages in unlocking the power of data, they share a common conviction that it can make or break an enterprise.”– Jim Love, ITWC CIO and Chief Digital Officer, IT World Canada, 2018

Data is a strategic organizational asset and should be treated as such

The expression “Data is an asset” or any other similar sentiment has long been heard.

With such hype, you would have expected data to have gotten more attention in the boardrooms. You would have expected to see its value reflected on financial statements as a result of its impact in driving things like acquisition, retention, product and service development and innovation, market growth, stakeholder satisfaction, relationships with partners, and overall strategic success of the organization.

The time has surely come for data to be treated as the asset it is.

“Paradoxically, “data” appear everywhere but on the balance sheet and income statement.”– HBR, 2018

“… data has traditionally been perceived as just one aspect of a technology project; it has not been treated as a corporate asset.”– “5 Essential Components of a Data Strategy,” SAS

According to Anil Chakravarthy, who is the CEO of Informatica and has a strong vantage point on how companies across industries leverage data for better business decisions, “what distinguishes the most successful businesses … is that they have developed the ability to manage data as an asset across the whole enterprise.”– McKinsey & Company, 2019

How data is perceived in today’s marketplace

Data is being touted as the oil of the digital era…

But just like oil, if left unrefined, it cannot really be used.

"Data is the new oil." – Clive Humby, Chief Data Scientist

Source: Joel Semeniuk, 2016

Enter your data strategy.

Data is being perceived as that key strategic asset in your organization for fueling innovation and transformation.

Your data strategy is what allows you to effectively mine, refine, and use this resource.

“The world’s most valuable resource is no longer oil, but data.”– The Economist, 2017

“Modern innovation is now dependent upon this data.”– Joel Semeniuk, 2016

“The better the data, the better the resulting innovation and impact.”– Joel Semeniuk, 2016

What is it in it for you? What opportunities can data help you leverage?

GOVERNMENT

Leveraging data as a strategic asset for the benefit of citizens.

• The strategic use of data can enable governments to provide higher-quality services.
• Direct resources appropriately and harness opportunities to improve impact.
• Make better evidence-informed decisions and better understand the impact of programs so that funds can be directed to where they are most likely to deliver the best results.
• Maintain legitimacy and credibility in an increasingly complex society.
• Help workers adapt and be competitive in a changing labor market.
• A data strategy would help protect citizens from the misuse of their data.

Source: Privy Council Office, Government of Canada, 2018

What is it in it for you? What opportunities can data help you leverage?

FINANCIAL

Leveraging data to boost traditional profit and loss levers, find new sources of growth, and deliver the digital bank.

• One bank used credit card transactional data (from its own terminals and those of other banks) to develop offers that gave customers incentives to make regular purchases from one of the bank’s merchants. This boosted the bank’s commissions, added revenue for its merchants, and provided more value to the customer (McKinsey & Company, 2017).
• In terms of enhancing productivity, a bank used “new algorithms to predict the cash required at each of its ATMs across the country and then combined this with route-optimization techniques to save money” (McKinsey & Company, 2017).

A European bank “turned to machine-learning algorithms that predict which currently active customers are likely to reduce their business with the bank.” The resulting understanding “gave rise to a targeted campaign that reduced churn by 15 percent” (McKinsey & Company, 2017).

A leading Canadian bank has built a marketplace around their data – they have launched a data marketplace where they have productized the bank’s data. They are providing data – as a product – to other units within the bank. These other business units essentially represent internal customers who are leveraging the product, which is data.

Through the use of data and advanced analytics, “a top bank in Asia discovered unsuspected similarities that allowed it to define 15,000 microsegments in its customer base. It then built a next-product-to-buy model that increased the likelihood to buy three times over.” Several sets of big data were explored, including “customer demographics and key characteristics, products held, credit-card statements, transaction and point-of-sale data, online and mobile transfers and payments, and credit-bureau data” (McKinsey & Company, 2017).

What is it in it for you? What opportunities can data help you leverage?

HEALTHCARE

Leveraging data and analytics to prevent deadly infections

The fifth-largest health system in the US and the largest hospital provider in California uses a big data and advanced analytics platform to predict potential sepsis cases at the earliest stages, when intervention is most helpful.

Using the Sepsis Bio-Surveillance Program, this hospital provider monitors 120,000 lives per month in 34 hospitals and manages 7,500 patients with potential sepsis per month.

Collecting data from the electronic medical records of all patients in its facilities, the solution uses natural language processing (NLP) and a rules engine to continually monitor factors that could indicate a sepsis infection. In high-probability cases, the system sends an alarm to the primary nurse or physician.

Since implementing the big data and predictive analytics system, this hospital provider has seen a significant improvement in the mortality and the length of stay in ICU for sepsis patients.

At 28 of the hospitals which have been on the program, sepsis mortality rates have dropped an average of 5%.

With patients spending less time in the ICU, cost savings were also realized. This is significant, as sepsis is the costliest condition billed to Medicare, the second costliest billed to Medicaid and the uninsured, and the fourth costliest billed to private insurance.

Source: SAS, 2019

What is it in it for you? What opportunities can data help you leverage?

RETAIL

Leveraging data to better understand customer preferences, predict purchasing, drive customer experience, and optimize supply and demand planning.

Netflix is an example of a big brand that uses big data analytics for targeted advertising. With over 100 million subscribers, the company collects large amounts of data. If you are a subscriber, you are likely familiar with their suggestions messages of the next series or movie you should catch up on. These suggestions are based on your past search data and watch data. This data provides Netflix with insights into your interests and preferences for viewing (Mentionlytics, 2018).

“For the retail industry, big data means a greater understanding of consumer shopping habits and how to attract new customers.”– Ron Barasch, Envestnet | Yodlee, 2019

The business case for data – moving from platitudes to practicality

When building your business case, consider the following:

• What is the most effective way to communicate the business case to executives?
• How can CDOs and other data leaders use data to advance their organizations’ corporate strategy?
• What does your data estate look like? Are you looking to leverage and drive value from your semi-structured and unstructured data assets?
• Does your current organizational culture support a data-driven one? Does the organization have a history of managing change effectively?
• How do changing privacy and security expectations alter the way businesses harvest, save, use, and exchange data?

“We’re the converted … We see the value in data. The battle is getting executive teams to see it our way.”– Ted Maulucci, President of SmartONE Solutions Inc. IT World Canada, 2018

Where do you stack up? What is your current data management maturity?

Info-Tech’s IT Maturity Ladder denotes the different levels of maturity for an IT department and its different functions. What is the current state of your data management capability?

Info-Tech Insight

You are best positioned to successfully execute on a data strategy if you are currently at or above the Trusted Operator level. If you find yourself still at the Unstable or Firefighter stage, your efforts are best spent on ensuring you can fulfill your day-to-day data and data management demands. Improving this capability will help build a strong data management foundation.

Guiding principles of a data strategy

Value of Clearly Defined Data Principles

• Guiding principles help define the culture and characteristics of your practice by describing your beliefs and philosophy.
• Guiding principles act as the heart of your data strategy, helping to shape initiative plans and day-to-day behaviors related to the use and treatment of the organization’s data assets.

“Organizational culture can accelerate the application of analytics, amplify its power, and steer companies away from risky outcomes.”– McKinsey, 2018

Build a Robust and Comprehensive Data Strategy

Follow Info-Tech’s methodology for effectively leveraging the value out of your data

Some say it’s the new oil. Or the currency of the new business landscape. Others describe it as the fuel of the digital economy. But we don’t need platitudes — we need real ways to extract the value from our data. – Jim Love, CIO and Chief Digital Officer, IT World Canada, 2018

Our practical step-by-step approach helps you to formulate a data strategy that delivers business value.

1. Establish Business Context and Value: In this phase, you will determine and substantiate the business drivers for optimizing the data strategy. You will identify the business drivers that necessitate the data strategy optimization and examine your current organizational data culture. This will be key to ensuring the fruits of your optimization efforts are being used. You will also define the vision, mission, and guiding principles and build high-value use cases for the data strategy.
2. Ensure You Have a Solid Data and Resources Foundation: This phase will help you ensure you have a solid data and resources foundation for operationalizing your data strategy. You will gain an understanding of your current environment in terms of data management enablers and the required resources portfolio of key people, roles, and skill sets.
3. Formulate a Sustainable Data Strategy: In this phase, you will bring the pieces together for formulating an effective data strategy. You will evaluate and prioritize the use cases built in Phase 1, which summarize the alignment of organizational goals with data needs. You will also create your strategic plan, considering change management and communication.

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit

“Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.”

Guided Implementation

“Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.”

Workshop

“We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.”

Consulting

“Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.”

Diagnostics and consistent frameworks are used throughout all four options.