Building a Data-Centric Organization
Today’s data is being created and consumed at a never-before-seen rate. According to a recent study, the world’s internet population is growing significantly. As of April 2020, the internet reaches 59% of the world’s population and now represents 4.57 billion people (a 6% increase from January 2019). That’s a lot of data being created, shared, and liked across social channels, search engines, websites, content portals, video sharing platforms, and numerous other channels.
Google, for example, processes 63,000 search queries each second on average, totaling 5.6 billion searches per day. And, with the number of connected devices increasing at an exponential rate each year, there is no stopping the global data explosion.
It's difficult enough to wrap your brain around these staggering figures. But, as a business owner, you must be able to manage and control all of the data that enters and exits your company. You need to build a company that recognizes the value of data, organizes it for ease of use, and uses it to generate long-term success.
To put it another way, a data-centric organization is required.
But, are businesses taking this increase in data seriously? And, more crucially, do they have the resources or guidance necessary to establish, build, and maintain a data-driven organization? Financial planning and analysis (FP&A) teams can considerably improve the decision-making process of their organizations if the corporate culture is up to the task, communication is clear, and sufficient training is in place. What are the conditions for this to occur?
In this post, we demystify three buzzwords (data-informed, data-driven, and data-centric) that CEOs should be aware of in order to ensure successful implementation across their company, as well as explain how companies may become data-centric.
Data-Informed versus Data-Driven Organizations - What’s the difference?
When we state that an organization or a person is data-informed, we mean that they are incorporating data and data context into their dialogue and decision-making process.
For example, you are data-informed if you use dashboards and key performance indicators (KPIs). It's really easy to be data-informed nowadays. You can construct a few simple charts using Excel or another simple tool to see what's happening within your company.
Being data-driven, on the other hand, entails pushing it to the next level. This is when you begin to collect data using more sophisticated algorithms and methodologies. The decision-making process is then transformed by either letting the algorithm make the decision for you or taking the algorithm's output into consideration.
Obviously, being data-driven does not imply that an algorithm must make every choice; rather, it implies that algorithmic outputs are used in some areas of the organization and in the decision-making process.
What is a data-centric organization and how to become one?
Having a lot of data does not imply that your business is data-centric. A data-centric organization aligns people, processes, and technology to produce, organize, secure, and use relevant information to move the business forward. It puts data at the center of the organization, allowing for more actionable information and better decision-making.
However, creating a data-centric organization is not easy. Only 24% of organizations have developed a data-driven organization, according to a 2021 NewVantage Partners survey of C-suite executives representing more than 70 Fortune 1000 companies. So how can it be done?
1. Develop a holistic data strategy. Do you have a strategy in place for how data will be handled throughout the company? Many businesses hurry to train their employees or invest in cutting-edge technology. The first step in creating a data-centric organization, however, is to sit down and create a holistic data strategy.
This strategy encompasses all aspects of your business data, from its creation and organization to its storage and analysis. It also covers how individuals will utilize the data and what technology will be needed to manage and protect the important information.
Here are some suggestions for creating a data strategy:
Examine the current scenario, including how data is currently managed and used.
Create a clear vision for how data may be used to achieve corporate goals.
To harmonize processes and systems, hold discussions across teams and departments.
Understand the skills and technologies needed to move forward
Establish clear data policies and procedures.
Remember to evaluate your strategy on a frequent basis. This isn't a "set it and forget it" activity. Not only should your data strategy be comprehensive, but it should also be adaptable to changes in the business and industry.
2. Build the required technology infrastructure. Corporate data can come from a variety of places, including business documents, product information, social media, email, customer and financial information, third-party data, and other sources. It would be extremely difficult to manage and control everything without the necessary software or platforms. Having the right technological infrastructure in place ensures that critical business data is properly organized, encrypted, and available to everyone in the company.
For instance, implementing an on-premise or cloud-based solution creates a centralized database where all data can be easily stored, managed, and shared. These automated platforms can save your organization precious time, while also granting you easy access to numbers that were previously hard to attain.
3. Educate and train your employees. Implementing the latest tools and technology can help to simplify the process of managing large amounts of data. To properly establish a data-centric organization, however, this isn't enough.
The success (or failure) of your data-centric activities will be determined by your people. They are the ones who will analyze and harness the potential of your company's data using the tools provided. Each employee must comprehend the significance of your data and the influence it might have on your business.
It starts with instilling a data-driven mindset in teams and individuals. Here are some tips:
Communicate the importance of your company's data
Educate employees on how to use data management tools and applications on a regular basis
Assist necessary staff with upskilling and specialized training
Involve people in the process of producing, managing, and protecting your data
Define roles and responsibilities clearly
4. Enhance the data management process. Improving your data management process is the final stage in becoming a data-centric organization. How do you track and manage your data at the moment? How do you determine the data's quality, accuracy, and completeness? What level of security do you have for your company's sensitive data?
When analyzing your existing data management process, these are some of the questions you should ask. You must consider factors such as quality, privacy, and security in addition to the actual production and storage of your data.
Now that you have the tools to create a data-centric organization, it’s time to get started!