5 steps to become a data-driven enterprise
Data is fundamentally changing the way we do business.
By 2020, the world will contain an estimated 40-60 zettabytes — 40-60 trillion megabytes — of data. The Internet of Things (IoT) will add to the data problem by contributing 50 billion connected devices that are collecting and transmitting sensor data.
We’ve created more data in the last two years than in the whole of history before that, but only 10 percent of the world’s data has been analyzed.
The future is clear: In this digital age, businesses need to recognize the value in data and take advantage of it through digital transformation to become true data-driven enterprises (DDEs).
What is a data-driven enterprise?
A data-driven enterprise is an organization that routinely gives its decision-makers reliable, actionable data, allowing them to efficiently make more informed and effective decisions.
This almost universally includes using data to gain insight and create new business models, and using data analytics to ultimately affect the way customers think about their services or products.
There are many examples of enterprises that have harnessed data to shake up their respective industries. Here are some of the most notable:
- Amazon changed the way the world shops.
- Uber changed the way we travel.
- Facebook and Twitter changed the way we communicate.
- LinkedIn changed the way we recruit talent.
- Netflix changed the way we watch TV and movies.
How do organizations transform into a DDE?
Harnessing the insights of data can shake an enterprise from a stagnant strategy, revitalize an old business set in its ways, and push organizations to update outdated technology.
But it requires a shift in mindset and a clear roadmap for the company’s vision, goals, and strategy. While the process has its challenges, becoming a DDE will ultimately help you better meet customer demands and expectations to stay competitive.
Here’s how to get started:
1. Treat data as a strategic asset. Companies can be overwhelmed by the sheer amount of data they have, whether it’s created, streamed, or legacy data. Part of the transformation into a DDE is reframing all that data as their most strategic asset. Deep analytics can uncover untapped revenue and new business opportunities.
To that end, DDEs typically invest in a chief data officer (CDO) that formulates a data strategy and defines what data sets to collect, purchase, manage, and build governance around. The company’s success depends on a solid data strategy that urges fast data collection, processing, and analysis to produce reports, dashboards, and KPIs.
2. Encourage an analytic culture. This might be a major paradigm shift, but the executive team must be fully committed to a strategic analytic culture. When leaders embrace this concept and align company goals, priorities, and expectations with insights from available data, organizations can more effectively serve their customers.
But company leadership must also be committed to data quality, governance, and accessibility to ensure analytics surface true and relevant information. This will increase value by answering complex business questions, offering insight into perennial business problems, and delivering clear reports with visualizations, dashboards, and charts.
3. Empower the business team with insight at the point of action. Empowering your organization’s teams to take action on business insight is the pivotal point of an analytic culture in an organization. Imagine all employees having the ability to analyze business problems or customer issues as they happen and address those issues by leveraging the data and analytic tools at hand.
With analysts who can take action during a customer call to quickly resolve issues, DDEs are better able to exceed customer expectations and improve customer retention.
For example, Amazon customer disputes are handled as a single point of contact and never escalated. With this type of analytic culture, it is almost impossible to have a bad experience with Amazon; that’s why Amazon’s sales are approximately $265,000 per internet minute.
4. Make insight-driven value a crucial business KPI. Now that your organization has an analytic culture, how do you know your strategy is working and how can you measure its ROI? Create key performance indicators (KPIs).
Creating KPIs and trend reports to measure internal business processes is an ongoing and vital step in measuring the health of your company. If a decision is incorrect, it’s better to fail quickly and re-analyze the insight than to travel the yellow brick road only to find a dead end. That is why DDEs hire data scientists and use machine-learning experts to continuously measure how to improve and compete.
5. Proactively secure business data. Protecting your data is critical to reducing the risk of cybercrimes, increasing customer confidence, and preventing revenue loss. This is the primary duty of a chief information security officer (CISO).
In addition, with the EU’s General Data Protection Regulation (GDPR), organizations can’t risk the 4 percent revenue penalties for violating data protections. Data security and governance aren’t just nice to have – they’re also a critical success factor in DDEs.
DDEs take their businesses to new heights
The digital transformation is happening now. By embracing data and all the insights it opens up, you can transform your organization so it’s better able to serve customers and stay ahead of the competition.