A data-driven business strategy approach allows businesses to research and organize their data to better serve their customers and consumers.
Data is not yet strategic for many companies. It is evident from business success stories that data can be of great value. Many organizations incorporate data into their business strategies and tailor their data efforts to business transformation requirements. Data can help you understand and improve your business processes, reducing wasted time and money, problems that many companies are currently facing.
Importance of Data
When properly integrated, data analytics can catalyze many business strategies by enhancing business processes and enabling people to execute them. Data integration starts with examining issues within the organization and setting priorities that are agreeable by all. Leaders, managers and data professionals focus on considering data and strategies via 6 value modes- improved process, competitiveness, products, human skills, risk management and incorporation of data into products and services.
Many companies are ‘data rich’ but still struggle to integrate data into their business strategies. From lack of talent to unreasonable cultural expectations, there are many reasons to cite. It is essential for organizations to solve these problems and tap into the power of data. The types of data that companies collect can be divided into five major categories: business processes, real-world observations, biological data, public data and personal data.
Even though businesses are complex, data is not yet a key strategy of many organisations. It is important to cater to the needs of customers, drive out competitors, close gaps in talent or qualification voids and take into account uncertain regulatory framework conditions while defining a corporate strategy. Data can be of tremendous value, but it is difficult to know where it goes.
The types of data that have proven to be most valuable to businesses are customer data, IT data, and internal financial data. Managers use datasets everyday across organizations around the world. However, centralised data management has proven to create risks when it comes to data privacy, both internal and external data. As such, companies acknowledge that privacy and security are crucial. Significant adaptation is needed in organizational culture for developing a data-driven organization. It is time consuming and hence no wonder, data is a distant strategy compared to mainstream business strategies.
Data-Driven Business Strategies
Data-driven intelligence must be accessible, interpretable and practical in a transformative business environment. At the macro level, a data-driven culture needs to be consciously nurtured across the organization.
Digital companies recognize the importance of data analytics and incorporate this strategy into their business models to stay competitive. Late movers in the data culture can quickly adapt to data-driven business strategies by aligning core business goals with the goals of the company’s data strategy.
Data-driven business strategies ideally combine the best practices in data science and business to increase efficiency, performance and productivity while reducing costs. At the micro level, data technology uses feature-specific KPIs to drive decision-making in all business functions such as human resources, finance, operations, and marketing.
Here are some important considerations when building a data-driven business strategy:
- Data and Business Impact Link: If the purpose and use of business data is directly linked to core business goals, there may be useful or profitable data. In many cases, leaders, managers and employees cannot map the available data to actual business requirements. As a result, even the best-planned business strategies do not produce the expected results.
- Strategic Management buy-in of Data Policy and Program: This can only happen if the data is clearly linked to the realized business effect. A management buy-in strategy needs to go through several cycles of persuasion, conversion, setbacks, and renegotiations. If the buy-in strategy is not carefully designed for all levels of employees, the wider business users in the organization will not be able to easily adapt the data-driven culture.
- Data Use Cases to be Tested Regularly: Once tested, use cases can lead to better planning changes and even business strategy changes. Unless your data case plan is regularly monitored and tested against real-world business conditions, it can be difficult to bridge the gap between desired and real-world results.
Incorporating data into your business is not as complicated as many think it is. There are good opportunities available in data-driven business analytics, artificial intelligence, data protection, data quality, process automation and monetization. Aside from this, data is already being used to feed new database inputs, match non-speaking systems, implement business intelligence systems, feed machine learning algorithms, establish low level governance and define metadata.
Organizational strategies need to utilize data better by engaging data professionals, investing in data management infrastructure and updates. Liaise with Singapore certified management consultants for a detailed data-driven business strategy formulation to foster the growth of your business.