Businesses were starting to prioritize a shift toward data-driven decision-making even before the pandemic; the ongoing economic fallout has only increased its urgency.
Given the attention awarded the “data-powered enterprise” of the future and all the success stories around Data & Analytics (D&A) adoption, one might expect to see enterprises proclaiming continued revenue growth, new revenue models, consistent cost optimization, dramatic operational efficiency, and drastic improvements in customer satisfaction. And indeed, D&A adopters with a resilient, scalable, and flexible modern data architecture in place are realizing strong results. But most organizations are finding the journey to becoming truly data-driven awfully slow.
Enterprise D&A initiatives fail to realize full benefits for a variety of reasons, including misaligned business and technology objectives, incorrect data monetization expectations, incoherent infrastructure and tools selection, inflexible operating models, lack of a compliance-based data governance system, and lack of adequate skills for transformation.
An ideal D&A strategy aligns priorities across business and technology to create an enterprise-wide environment of innovation to achieve optimized outcomes. When done right, it has the potential to rapidly transform both internal and external stakeholders’ experiences. The trick is to harness data from multiple sources across the data landscape, harmonize and transform it into an authentic state by utilizing emerging D&A technologies, and ultimately empower business units to substantially improve the quality of strategic decision-making at scale.
Everest Group recommends the following five commandments for enterprises to formulate an effective D&A strategy:
- Align business and technology to a common goal: Striking a balance between your organization’s long-term business vision and the readiness of your technology stack is indispensable to driving maximum benefits from your D&A initiatives. Business and technology teams need to work together and build on each other’s experience and skills.
- Invest in infrastructure and tools that can handle exponential data explosion: With the rapid pace of technology change, enterprises are collecting a substantial amount of data. The pace of data explosion is likely to accelerate going forward and will continue to pose storage and management challenges. So you have to invest in future-ready infrastructure and tools that can effectively adapt to the fast-evolving data ecosystem, and provide the necessary flexibility, scalability, and integration capabilities, and cost benefits in the long run.
- Have a long-term vision for monetizing the data, but don’t rush: Many businesses’ ultimate vision is to transform data into an asset and derive value from it. However, many businesses also become impatient and try to unsuccessfully monetize their data too quickly, derailing the initiative. Unlike a software or application development process that serves a defined need, data-related initiatives are an ongoing learning process that focus on creating mechanisms to solve new business problems as and when they arise. Doing so requires enterprises to remain patient and keep pursuing the initiative.
- Build a compliance-focused data governance system: While democratization of data across the enterprise is an absolute necessity to maximize its monetization value, data security has to be a priority. There has been a steep rise in privacy regulations globally in the past decade, and stringent mandates for ensuring data privacy will likely continue. And if your business fails to responsibly manage data, it could be subject to huge regulatory fines, and it could negatively impact market valuations and consumer trust. Your data strategy must include a culture of awareness and proactive adoption of compliance best practices to stay ahead, and safe, in the rapidly evolving privacy landscape.
- Proactively invest in developing the right culture and talent: A successful D&A initiative needs the right talent from the start. Developing data culture and literacy, and driving adoption within the enterprise requires dedicated individuals. Enterprises often think of developing the requisite talent as an afterthought, which is a big mistake in their overall strategy.
How has your D&A journey been so far? What challenges have you faced, and what lessons have you learned? To exchange perspectives, please feel free to reach out to [email protected] or [email protected].