1 July 2022
Data strategy - where to start
Key factors to consider when developing your data strategy
All businesses deal in data every single day, but unfortunately, many still view data as a byproduct of their day-to-day existence, and not as a valuable tool to inform decision-making and drive their business forward. After all, if you are already seeing steady revenue, have happy staff and are delivering your commitments, how will data help?
Data is actually one of the most powerful commodities of any business. It can be used to help every business function, department and team to make better decisions that will ensure that your organisation isn’t only successful now, but also in the future. The reality is that no matter how big or small your business is, or what industry you are operating in, every organisation needs to have a solid data strategy.
Identifying your requirements
Before you can start creating a data strategy, you first need to know what you want to accomplish from it. There are countless ways that data can support and improve a business, and they fall into two categories.
- You can use data to improve existing business practice and how you make decisions.
- You can use data to alter and improve your day-to-day business operations.
The first step of any data strategy is to identify what your business priorities for the next few years are, and how data can help you to achieve them. For example, Amazon uses customer data - what customers have bought in the past, items they’ve left in abandoned carts and viewed products - to make new product recommendations, drive sales and increase revenue with great success.
Decide what data you need
Once you know what your objectives are, you can establish what data you’ll need. The trouble with generalised data is that there is so much of it. There’s no point spending time and money collecting and analysing data that won’t tell you what you need to know. Instead, try and ensure that your data strategy focuses on answering the fundamental questions you need answered to achieve your business priorities. Knowing what data you need is essential for the next part of your data strategy.
Data collection and analytics
When you know what data you need, it’s time to figure out where you’re going to get it from. Chances are, you may have some of the data you need already inside your organisation and it’s just a case of analysing and using it. However, it’s also likely that you need data that you aren’t already collecting. Identifying these gaps and filling them will be crucial to the success of your data strategy.
Data storage is one of the most basic capabilities in a company’s technology portfolio yet is still something fairly complex to organise since businesses are dependent on data being shared and distributed to support both operational and analytical needs. Data must be easy to access by anyone who needs it, but also stored in a secure enough manner to protect it from cyberattacks, machine failures or human errors that could jeopardise it and leave it vulnerable to theft.
Once you’ve established what data you need, where you get it from and how you are going to use it, it’s crucial to consider whether your current data storage infrastructure is both suitable and secure for your needs. Do you need to move towards cloud hosting to improve accessibility for your teams? Is your data organised and structured in a way that makes it easy to use? An evaluation of your current data storage and its suitability to meet your priorities is an integral part of any business data strategy.
Data strategy, quality and governance
Data governance is a fundamental pillar of any business that deals with data – so, that’s pretty much all of them. It refers to the framework of processes, guidelines, standards and metrics that ensure the effective and efficient use of information in helping a business to achieve its goals. It defines who can take what action, using what data, in which situations and the methods they can use.
Your data strategy will need to incorporate governance, which will clearly define how your business will manage data consistently. Elements of this governance could include:
- Assigning responsibility for implementing policies and processes
- Defining policies for sharing and processing data
- Creating processes for naming and storing data
- Establishing measurements for keeping data clean, usable and high quality.
All organisations require high-quality data that they can trust for their decision making. Poor quality data could cause you to make bad decisions that negatively affect the success of your business. One of the best ways of protecting your business against this is to make data quality a part of your data governance. You can do this by defining quality assurance metrics (QAMs) in your governance strategy, performing regular audits and more.
Outsourcing to data management specialists
Unless you’ve got a team of in-house experts, defining and implementing a successful data strategy can be frustrating and time consuming, dragging your attention away from the day-to-day operations that keeping your business ticking over. Fortunately, there is another option. Many organisations choose to outsource a variety of business processes, including data management. This enables them to reap the benefits of an experienced, professional team without having to train them in-house. Not only can they make sure that your data is properly managed and updated, they can also work with you to create a defined data strategy that helps you to deliver your business goals.
Some of the benefits of outsourcing data management services include:
- Reassurance that data is stored safely, securely and effectively.
- Enhanced productivity, as your staff can focus on their roles and responsibilities, and not on managing data.
- Cost-effectiveness, as your teams focus on business growth and revenue-building.
- Reduced risk of data hacking/loss and subsequent penalties, as well as the effect on your business reputation.
- Ensure your business meets the necessary data compliance and governance regulations.
Choosing to outsource ensures that your data management is in expert hands, leaving you free to focus on growing your business.
Return on investment
Implementing a data strategy and becoming a data-driven business requires investment, but research consistently shows that it is time and money well spent. When a business has an effective data strategy in place, it can help them to improve productivity, increase revenue and generate valuable insights to inform future decision making. And while there’s no guarantee of ROI from a data strategy, indications suggest that the more data becomes more ingrained over time as a result of a robust data strategy, the greater the ROI a business can achieve. Those companies that have reportedly achieved the highest ROI have been using data for some time and can accurately employ machine learning and AI to their datasets to solve current and future problems.
How we can help
At MHR, we’re best known as a leading provider for HR and payroll solutions. However, with a large team of experts with decades of experience in BI and data analytics, we’re also able to offer a bespoke, full data management and analytics consultancy services. This enables our clients to reap the benefits of becoming truly data-driven businesses. Ready to get started? Download our data and analytics consultancy brochure or give our data and analytics consultancy team a call today.