A digital strategy is the starting point of every digital transformation. Here, the use of data is an essential component. If your data is in order, it will help you to improve your customer approach and your business processes. It not only guides the development and use of new technology, but sometimes even the use of new business models. But how do you ensure that your data actually contributes to innovation, growth and more efficient operations? This article is the first in a series of three in which you can read all you need to know about activating data i.e. unlocking, understanding and using data – along with the insights it provides. We not only look at the strategic and technical aspects of data activation, but also at the mindset and culture required to extract as much value as possible from data. In this article, we examine the usefulness of a data strategy.
Digitalization produces data. Mountains of data. The question is: how can you use this data to create more value for your organization? The computing power and storage capacity of computers and other digital devices have increased so much since computers first appeared that it almost beggars belief. The number of innovations these advances have made possible is staggering. For instance, connectivity, sensors, cloud computing and data analysis. Perhaps even more impressive is the personal development we have undergone as human beings and the way in which we deal with all things digital.
All this data opens up opportunities for gaining insight and increasingly allows you to do so in advanced ways. With business intelligence we could already use data to look back on what had happened and analyze it. Using advanced data analytics, we can discover why it happened and predict when something will happen. Thanks to data science, we can even let something happen on purpose in order to discover how we should respond if it occurs in reality.
If organizations use all these innovative new technologies, they can increase their productivity in great strides. Organizations can use information and analysis to guide them and make predictions, leading to better decision-making. However, activating this data is a prerequisite. If you don’t use the insights and convert them into actions, they will ultimately be of no use to you.
Over the years, you can see that curious organizations often end up with a winning hand. Thanks to their curiosity, they have a deeper understanding of the market and they know their customers better. Moreover, they have a firmer grip on production and costs, and that is ultimately reflected in the top and bottom line.
You start with awareness in your organization of the need to change, to improve and to become data driven – and curiosity about what all of this means. Next, you take the following steps.
This is an iterative process, based on a foundation of technology, infrastructure, organization and people.
Why do data-driven organizations actually perform so much better? Most importantly, it’s because they’re able to improve efficiency and realize long-term growth. They are able to act faster on all fronts, with a sharper focus. Moreover, they know all the ins and outs of their products and services, and they know what their customers want. They acquire this knowledge by continuously requesting feedback. By talking to customers, trying things out and processing the results. This also means that they dare to fail. If something doesn’t turn out as desired, it’s used as feedback for doing things a little differently next time. This requires two things: the discipline to gather and organize feedback (e.g. through frequent testing) and the courage to fail. For some people, the latter can still be a bit nerve-wracking. Finally, data-driven organizations are more agile, which enables them to implement changes more quickly.
For instance, suppose you’re implementing a data strategy for a mortgage brokerage. In that case, you make sure that the mortgage brokerage knows everything that the law permits about its customers. In this way, you enable the mortgage brokerage to support its customers optimally when they experience life events, like moving in together, relocating or a death in the family.
The following drivers make the difference here.
A business strategy is about markets, customers, products and services. In your data strategy, you should clearly state how it supports the business strategy. You do so by incorporating the following elements into it:
When it comes to digital strategy, curiosity is the key word. Not only the initiators, but everyone involved should be curious and provide input. A sense of urgency is also important. To achieve that, look at a business unit where things could be better and where data could help. From there, it’s easier to come up with a business case, develop a vision and get started.
Don’t forget that in this process, it’s always a good idea to think big and start small. So start from a suitable customer journey, production process or product.
In the next article in this series, you can read about why a roadmap is important to ensure your data strategy will lead to success and how to create such a roadmap.