Leveraging your organization's data is no longer a nice-to-have but an absolute necessity to remain competitive in an increasingly digital world.
It is becoming evident that companies that don't transform into data-driven organizations1, will simply not be able to keep up with their data savvy peers. And the bar keeps getting higher -- tools and practices that five years ago would have been considered cutting-edge like sentiment analysis are now simply table stakes.
So why exactly is that? Why is it so important to become a data-driven organization, and how is data hindering your organization's potential?
DATA-DRIVEN ORGANIZATIONS ARE...
Indicators that data is hindering your organization's potential.
1. Inability to make good decisions in real-time
Organizations collect data about their customers, transactions, prices, employees and virtually everything else. The problem with this valuable data is that it is typically siloed across multiple disparate sources such as CRMs, ERPs and custom applications. Without being able to connect all these disparate sources together, it's impossible to holistically evaluate company performance such as product profitability or marketing ROI.
Organizations often try to stitch their data together by having analysts pull extracts and manually scrub the data. This is an inefficient, time consuming and error prone process which often results in more questions than answers. By the time data is prepared, it's too late to make course corrections.
If it takes more than 5 minutes to answer "Who is my most profitable client in the Northeast region over the past six months" then you are already behind your competition.
2. Losing market share to competitors
Speaking of competition, more organizations are starting to understand the value of being data-driven and how data can elevate them above their competitors. It is likely your competitors have strategies in place and are already using business intelligence tools like Power BI and Tableau to empower their sales teams, customer service orgs, and corporate planners to make real-time decisions.
Transforming into a data-driven organization doesn't happen overnight. It requires thoughtful planning and sponsorship from senior executives.
If you don't act now, you will find yourself playing catch-up while your competitors get further and further ahead.
3. Higher costs
Most companies rely not only on their ERP but also a variety of custom applications to help their sales teams price work, their customer service teams track quality issues and many other use cases. These are vital systems for you to run your business, but they are also quite expensive when it comes to maintenance and licensing. The purpose of these systems is to collect data about your business, anything from transactions to inventory detail.
Unfortunately, data is only as good as the people who enter it, and organizational data quality often becomes a runaway train of a problem. If generating a consolidated income statement is a process that takes weeks instead of hours, poor data quality is a likely culprit. Now you are in a position where you are paying hundreds of thousands of dollars for licenses and resources to maintain your systems only to spend even more time cleaning data. Expensive enterprise tools become blockers instead of enablers due to poor data quality.
These inefficiencies result in spending time and money maintaining systems and their data integrity, exponentially driving up costs as your organization grows.
What to do about it.
The toughest part of the journey is the first step. Securing executive sponsorship is the foundation of the data-driven journey.
The first step to take on the journey to transform into a data-driven organization is having strong executive sponsorship. Once leaders are committed to transformation it is time to evaluate use cases and identify an organizational problem that is small enough to be solved in a short period of time but large enough to provide significant organizational value. Engaging in a pilot project to solve this problem can help evaluate technologies, gain organizational support, and deliver immediate value. They key is to start small, think big and scale as you go.
1. Data-driven organization is an organization that relies on data analysis techniques using internal and third-party data to make informed strategic and operational decisions.
Authored by: Vadim Grakhovskiy, Data Insights Practice Leader