Finding value: where data can drive strategic value to your business
If our ambition is to use our data to support our critical business objectives and deliver value for the firm, how is it that we go about doing that? How do we identify areas where data can drive value and how they can support critical business ambitions? Let’s have a look at nine ways Cognopia has identified where data drives value in your business.
As you’re sensing your environment and you’re looking for these opportunities, these threats, these weaknesses, where is it that data drives the value? Where is it that you should be looking so that you can pick the best data strategy and support the business as it needs to grow?
Any decision in your organisation, especially those made by senior leadership, is going to be informed to some degree by data and wherever you can provide better data in a format that they can access very easily, that’s high quality and trustworthy is going to make their life easier.
So that’s got to be your first objective. Support the decisions the business need to make to achieve their strategic goals.
What are some strategic goals like cost reduction that might be on your executive agenda? We’ve looked at defensive data strategy where you might do problem resolution. An example of that could be cutting costs out of the organisation, making things less inefficient and making sure that we don’t, for example, waste money over purchasing products that we don’t need.
Clearly, we’ve talked a lot about customers, delighting our customers, making sure that the data that’s provided to them at every single touchpoint is consistent and up to scratch so that they can complete a purchase or they can do what they need to do with our business and not feel frustrated or let down by us. Identifying areas where we delight customers with great data could be offensive data strategy – cross-selling recommendations that help customers achieve a goal whilst driving up our revenues.
When we look at data opportunities or how data plays a role there, clearly seeing the trends and looking at the future is how we can sense the environment and make a great strategy that’s forward-looking. So what data can we acquire for the business that will allow us to see those trends before our competitors do or see trends that are going to fizzle out and therefore that we shouldn’t invest in? Can we bring in data that allows us to sense our environment and see new opportunities before others do? This is critical to driving great strategy.
We’ve got to get rid of risks. This is back on the side of the problem-led defensive data strategy. We need to make sure that our data is well classified in order that we can support ourselves and avoid regulatory penalties. Citigroup got fined four hundred million dollars for the way that they were handling data. You cannot ignore these risks when building a data strategy.
Innovation; where can you provide great data to teams that are making new products or creating new services and drive that value into the organisation? We can look at data to drive up new opportunities, and that could be potentially partnering with another firm, sharing our data and looking at how we can use their data and our data together to create a new product. Where can data be embedded or used to create something that’s different and innovative for the organisation?
Can you monetise your data? You’ve got large swathes of data, and if you look at IBM’s research, a customer record on the black market is worth one hundred and eighty dollars. Sum up the total amount of customers you’ve got and think about the total dollar value there. Clearly, you can’t go and sell that data. That would be unethical. But what could you do with that data and what could you do to sell that data as a service and generate more revenue for your business?
Your employees have data in their heads that we can extract and we can use to enrich some of the big data that we’ve got in the firm. We bring together small data (their experiences) with big data to create real value. We’ve also got ways of mapping our employee journeys. Let’s document the experience they have working in our firm, so we can make their lives easier, making them able to make better decisions more quickly, cutting away cost and risk and waste in the process.
When you are using data to drive up efficiency, you start driving down the wastefulness that we see when there are bad data practices in an organisation. This is again a problem-led data solution. However, it could also delight your employee because they’re no longer performing manual grunt level work with data. They’re able to spend their time on higher-value activities.
To sum it up
So think of these as 9 different ways that you can use data to support different business objectives, but you can combine various components of these to deliver an ambidextrous data strategy at the same time.
So there you have it – there are 9 different ways that you can use data to drive value. Obviously, you have to find the ones that fit your corporate strategy already. Otherwise, you’ll be chasing your tail going off after something nobody cares about.
We will come back to these 9 different ways later on in this course as we go and look at existing strategies and we look at existing businesses and we look at where each of these various ways to drive value can be leveraged against a specific ambition of a particular business. In our case, we’re going to take a look at McDonald’s. Stay tuned.