Value: The missing component of data strategy

What do you want to achieve with data?

• To make better informed and faster decisions
• To improve customer trust and transparency
• To create a data culture

These answers and similarly fluffy ones are common place in the world of SME organisations and their data strategy. I'd argue that these are ineffective goals for organisations at this scale. These are organisations which are making their first most into data and cloud and need to focus on proving the investment is worthwhile.

Data leaders with these goals are likely to struggle to generate investment or internal buy in to data initiatives. Investment they do receive is likely to be spent on initiatives which don't directly drive the results the business is looking for, hampering their ability to get future investment.

One reason these goals fail is that they're not typically linked to the businesses' overall strategic goals. Perhaps more important is that they're also hard to measure and often carry indirect benefits. Its hard to measure a quantified benefit of the ability to make faster decisions or a strong data culture.

So what do business leaders really care about?

• Revenue Generation
• Cost Reduction
• Quality Improvements

These are a few of the more common targets to measure the success of business initiatives. The focus is almost always on tangible financial benefits such as cost reduction, as every organisation is measured on money.

Additionally, frequently considered are targets which have the strongest and most visible link to the secondary results the business wants to achieve, targets such as customer acquisition or retention, regulatory compliance and more.

When planning your strategy you should focus on use cases which improve these targets. For example, aim to identify and choose analytics use cases which drive increased revenue in existing customers, or automate intensive manual processes to reduce costs.

Of course this doesn't mean the fundamentals should be dropped from your data strategy. Culture, ethics, governance and other essential domains allow you to drive forward your core value delivery. Without these the chance of failure will be much higher as user adoption, data quality and more will restrict the impact of the solutions you build. While aspects of these fundamentals should be implicit in the solutions you build they still require explicit investment.

Therefore, when setting the strategy and targets of your data function, you should be focused on generating real measurable value aligned to business goals, rather than initiatives which provide indirect benefits. Use these direct benefits to prove return on investment for your data function and secure funding to implement the fundamentals of your strategy, such as data governance and culture.