Creating A Data Strategy

What does a Data Strategy do? 

It is becoming increasingly more common for companies to utilize data and analytics to make strategic decisions for their own growth and showcase their partnerships with Clients. More and more companies are hiring Chief Data Officers (CDOs), and creating data strategies upon which their companies are measured and run. Even with the increase in data analysis & implementation, on average a company utilizes less than half of the available data to make strategic decisions. While bringing a CDO on board is a great step for organizing & utilizing accurate and essential data, most CDOs have an average tenure of 2.4 years. Implementing a clear data strategy for your company is a key element we encourage you to look into, that can drive financial performance and support managerial decision making while a CDO is a part of your team, and in their absence. 

Data Defense vs. Offense 

Data defense is the use of data to minimize a company’s downside risk. It includes ensuring data regulations are followed (such as rules governing data privacy and the integrity of financial reports), and using analytics to detect and mitigate fraud and prevent theft. 

Data offense focuses on supporting company objectives such as increasing revenue and customer satisfaction. It may also include customer data that helps drive managerial decisions and provide interactive dashboards for analysis by appropriate team members. 

The industry your company falls into may dictate if you should rely more heavily on data defense, data offense, or have a balance of both. As an example, strong regulation in an industry (financial services or health care, for example) would move a company toward defense, while strong competition for customers would shift the data strategy toward offense. It is important to note that a company‚Äôs strategy can shift, as necessary, from more defense/offense heavy, to the other. 

A Single Source of Truth (SSOT) 

It is important that your company has a single source of truth (SSOT). That is, a single (often virtual) repository that contains one authoritative copy of all crucial data such as customers, suppliers and product details. The SSOT must use a language that is common across all business areas and functions, to ensure that data is not misrepresented across the organizations within your company. That is, reports cannot utilize different names for the same Client, for example:  XYZ, Inc., XYZ LLC, XYZ. Having a cohesive set of data ensures that organizations across your company are utilizing the same data sets, for decision making, Client interactions, and public reporting (where applicable). 

The importance of data & analytics used to end with payroll and accounting. It is now an integral piece of all business organizations and operations, and a need to manage it strategically is only growing. We encourage you to create a data strategy for your company to drive success, create trusted partnerships and make strategic decisions at all levels that you are confident in.