Why do we need to create data strategies?
So in 2021, we ran some research, it looked at a range of firms around the world and we looked at the aspirations of the organisation – where they wanted to go and what they wanted to do with their data, and we looked at the reality of what they’re doing today. Let’s take a look at what we found.
Here’s one of the key research summary pieces where we asked “Is data viewed as an asset in your organisation?”
What you can see here is:
- 33% of companies saying they thought it was a strategic enabler
- 23% saying that it was a competitive differentiator for their business
- 26% that thought that it was only the regulatory reporting data and other critical data that was an asset
- 19% just thought it was a necessity for operational purposes of the business only
At least 100% of the people that we spoke with thought that data was an asset of some sort or another.
So as you can see, 56% of the firms we talked to thought that the data was a strategic enabler or a competitive differentiator for their business. That’s great news. So it’s all well and good to talk the book and to say that it’s a strategic enabler.
But what’s the reality on the ground today?
Well, just under half of the firms lack any policies to govern their data whatsoever, so there are no rules in place that say what’s fit for purpose. Over half of the organisations we talked to struggle to police the PII data. That’s the personally identifiable data about our customers and employees that, you know, under legislation like GDPR, we’re mandated to look after.
Just over 3/4 of firms were struggling to get senior leadership accountable for their data, and if we can’t get the senior leaders accountable for it or interested in it, then how can we be aligned to their goals and ambitions for our strategy and for our corporate direction? 37% of firms that we spoke to knew that their data was bad. They knew that it was poor quality, but they still didn’t have any processes in place to fix it. So again, you look at it, here’s a strategic enabler for our business. It’s a competitive differentiator. Yet the reality says we’re not treating it as such.
The reality is, only 2% of the firms we talk to are actually using data and aligning that against their corporate strategic objectives.
We can do better. So given this huge gap, it’s clear that we need a plan in place that’s going to leverage our data assets and put them to use to help us achieve our business, corporate strategic aims and ambitions.
And that is really what a data strategy is, and that’s why we need one to support our business objectives. A great data strategy is going to look at where our data weaknesses are today. Look at where our strengths may be, and then it’s going to align the two to solve a real business problem. Before we go any further, let’s look at the value a great data strategy brings in terms of data maturity and the ability for an organisation to take value from the data it has today.
Here’s another statistic from our 2021 research looking at what’s a strategy worth. And when we compared the data maturity scores of the people that responded with the worst data strategies we found that on average they get 1.97 on our five-point scale, whereas those that had really tightly aligned their strategy against corporate goals were able to get 3.43.
We’ll look in later courses about how to put a dollar value on that differential. But in most organisations, that’s a massive step change in the ability to use data to support business and strategic outcomes.
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You can see more data maturity titbits on our website https://cognopia.com/data-maturity-model-tips-and-tricks-2021/