Data is a strategic asset. Facebook’s public offering valuation, for example, owed much to its storehouse of consumer data. This is an indication of the future and how moving forward a company’s success will depend on how it uses its data asset.
Ten years ago, data was expensive to access, analyse, process, and store. To deal with those realities, organisations had no choice but to build systems and cultures for treating data as a scarce resource. That meant that only the highest priority decisions have been able to rely extensively on data; essentially, everything else has been priced out of the data equation.
Now, innovative tools and maturing technologies allow IT to change that cost equation. As we have seen, data continues to explode which means more data is being collected than ever before, internally, within businesses, and externally, among the organisations’ networks and in the wider consumer world.
Chief information ofï¬�cers can now “architect” data platforms that enable their organisations to tap structured and unstructured data to industrialise their data services so that companies can quickly access and share data across the organisation, at minimal incremental cost.
Implementing a data platform to change that cost model is only half of the equation. To get tangible results it is necessary to start modifying the organisation’s objectives too. Companies need to move to a model where all employees are expected to maximise data usage to drive business benefits.
In the new model, data becomes central to innovation and to all decision making, fuelling growth and making the organisation’s operations more efficient at every level. Data skills spread beyond IT, becoming part of every business function and business activity. In essence, data is en route to becoming every organisation’s next core competency.
A new corporate model is emerging whereby young companies are infusing data into many more of the decisions their managers make every day. Amazon’s chief technology ofï¬�cer, Werner Vogels, has stated that Amazon’s free-ï¬‚owing data-services model enables the company to respond very quickly to new ideas. The advantage that these companies have is that through data services, their data is for the most part, free to roam, share and analyse so they can unlock more of its potential value.
These companies have achieved a pervasive form of data-driven decision making. They can be quicker and more confident in their decision making, explore more ideas more easily and with more conclusive results. They can cut costs more quickly, more easily, and more effectively and they are better able to evaluate and enter new markets and define and launch new products.
It’s fair to say that most organisations are low on the data learning curve. For many, their forays into leveraging data are just that; those initiatives are not, or not yet, integrated into an overarching strategy. The end goal of such a strategy is clear, though.
Established organisations won’t become data-centric overnight. But the first step is to recognise that the shift toward data is indeed a journey. It is also a team effort that demands the wholehearted involvement of the CEO and concrete actions and accountability from most of the members of the company’s top team.
As the CIO makes progress in providing the foundation capabilities that will allow the business to access and manipulate data, the rest of the C-suite needs to start adapting the business so that it can take advantage of the CIO’s initiatives.
There are three factors which need to be immediately addressed including intimating an understanding of data in all employees at every level, appointing a Chief Data Officer to serve the bridge between IT and the business as well as thinking about partner agreements in relation to data and re-evaluating current arrangements in light of the value of the data already being shared.
It is inevitable that data will continue to be pivotal for companies wanting to build a competitive advantage. Implementing and changing data platforms calls for a strategic effort which is galvanised and led from the top. To succeed in this, it is necessary that businesses think about new skills and levels of accountability. Fostering a new data culture is as much about mindset and culture as it is about technology.
Posted by Nick Millman, Senior Director, Digital, Data & Analytics practice at Accenture