In the modern economy, a successful business tends to be a data-driven organization. Given the sheer volume of data that organizations generate today, those that derive actionable insights from their databases enjoy a significant competitive advantage. Forward-looking businesses use this information to improve operations and customer experiences while crafting the products and services today’s customer craves, no matter the industry.
Research shows that data-driven organizations typically dominate their business sector. Forrester predicted enterprises driven by data insights would earn close to $1.8 billion by the end of 2021. A simple truth remains: if your company isn’t on a path to become data-driven, its long-term prospects for success (and survival) are at risk.
So, let’s dive into the details about the data-driven organization. This includes a closer look at what defines these modern data-powered businesses. Additionally, we provide a high-level overview of what it takes for your company to follow in their footsteps. Leverage these insights to build an enterprise poised for success in 2021 and beyond.
What is a Data-Driven Organization?
A data-driven organization builds a culture where data is embedded in nearly every decision. The top companies in today’s economic marketplace boast cultures focused on gleaning actionable insights from their data stores. Their intelligent use of data spans across and throughout the entire organization, as opposed to only the IT department. These firms understand the importance of data to inform decisions in every department of the business.
Simply put, a few departments performing ad-hoc data analytics doesn’t make your company a data-driven organization. Businesses with a mature approach put insightful decision-making at the core of their data usage. Corporate data remains accessible throughout the entire organization in addition to state-of-the-art tools needed to glean critical insights.
"A few departments performing ad-hoc data analytics doesn’t make your company a data-driven organization."
The overall data literacy of employees is a metric that identifies organizations with a mature data culture. After all, the ability to access company data means little without understanding what the data means. These companies also boast strong training programs ensuring a data literate workforce.
Not surprisingly, fostering a data-focused company culture comes from the top. These enterprises generally employ a Chief Data Officer (CDO) with the vision to implement the tools and data literacy needed to drive informed decision-making. Of course, the CDO works collaboratively with the rest of the executive team to ensure there is alignment across the organization and overarching business objectives are achieved.
While large enterprises tend to be successful in implementing this approach – brute force helps – smaller businesses needn’t be left out. In fact, their nimble nature makes quickly implementing a data-driven approach simpler than you might think.
How to Build a Data-Driven Organization
Earlier, we highlighted the importance of culture when building any data-driven organization. Because of this, a top-down approach becomes essential, from the executive suite all the way to a new employee on their first day. Again, a visionary CDO helps this process at larger companies. However, smaller organizations can take advantage of their size to instigate any desired change, quickly.
A wise first step on this journey involves an internal analysis of how the current organization handles data. Important questions need to be asked as part of this process:
- What data exists and how is it captured, managed, and accessed?
- What is the current approach to data-informed decision-making?
- What is the data maturity level in regards to corporate data?
- Do any data management and data governance policies exist?
- What data analytics tools and processes exist? Are they effective?
- Do we have the right internal skills to implement?
The answers to these and other related questions provide useful insights when crafting a plan to become data-driven. Of course, it’s vital to get executive buy-in to undertake this transformational process. Ensure they play a close role in the development and approval of the project plan. Once again, employing a CDO makes this approval process easier.
Support from the top becomes critical when considering the massive changes required, including new skills and processes, to truly benefit from analytical decision-making. Ultimately, data remains the lifeblood of the modern business, and its use must be prioritized across the company.
Additionally, the project team must include stakeholders from the technical and business side of the organization, in a similar manner as a DevOps approach. Your goal should revolve around implementing a flexible and easy-to-use solution that scales seamlessly and delivers value across the organization.
Insights on Becoming a Data-Driven Organization
Even after an organization reaches advanced levels of data maturity, the work never really ends. Below are further insights that any organization can use to further its goals of data maturity.
- Measure progress and success. Use metrics to track the efficacy of decision-making after becoming data-driven. Let this information drive the maintenance and enhancement of any technology solution, as well as supporting processes.
- Build internal skills. Maintaining a data-centric company culture is also critical. Ensure existing and new employees receive training in the importance of data as part of their role and onboarding process, respectively.
- Share the value of data. Communication across the organization is how you build awareness and share what data is providing the business. Data can be a focal point for bridging departments, aligning objectives, understanding your customers’ journey, and envisioning your next breakthrough product.
Following this approach plays a key role in how your business can reach new levels of success and, leverage the opportunity to become a data-driven organization that drives business growth.
If you need additional insights on how to become a data-driven business, reach out to the experienced team at Encora. As a leading data analytics technical consultancy, we boast tangible experience helping other companies achieve their goals. For additional insights, check out our eBook on the importance of following a data-driven approach.