Why Every Company Needs A Data Strategy For 2019
Focusing your data efforts where it matters most
Technology is developing so fast these days, many businesses – particularly smaller and mid-sized companies – feel like they’re struggling to keep up. Sometimes, this leads the company to dive eagerly into new data opportunities, investing in new technologies and fancy analytics that aren’t right for their business. And sometimes, it leads to inaction, or a compulsion to bury heads in the sand and ignore the data revolution. Either way, these businesses don’t fully realize the possibilities of data.
That’s why you need a data strategy, to set out how you want to use data in practice, clarify your top data priorities, and chart a course for reaching your goals – including what kind of data you need, where you’ll source that data, how you’ll store and analyze the data, and so on. The data strategy helps you drill down to your core business needs and create an achievable plan for the future.
Relating your data strategy to your business strategy
Creating a data strategy isn’t a standalone activity; it must be driven by your overarching business strategy. Therefore, a critical starting point for any data strategy is the business’s strategic objectives. To put it another way, what is your business trying to achieve and how can data help you get there?
After all, what’s the point of a data strategy – indeed, what’s the point of data in general – if it doesn’t help you achieve your organizational goals? So before you charge ahead to your data strategy, review your business strategy first and then develop your data strategy (here is how you develop a data strategy, including a data strategy template).
How to use data in your business
So how can data help you achieve your organizational objectives and deliver your business strategy? There are five key ways businesses are using data:
Let’s look at each area in turn.
Improving decision making is one of the top priorities for most of the clients I work with. And with good reason – from developing new products to increasing revenue to hiring the right talent, it’s all about making the best decisions for your business. And what fuels better decision making? Data.
Data can be used to help every business function, department and team make better decisions. For example, in HR, data is being used to calculate the likelihood of employees leaving the company, which helps HR and managers better engage key talent and reduce employee turnover.
Here’s a really simple example of data-driven decision making in action. Thanks to data, US restaurant chain Arby’s discovered that its renovated restaurants made more money than its un-renovated restaurants. As a result, the chain decided to drastically ramp up its remodeling programme.
Identifying market trends and understanding customers’ needs is a key driving factor of most sales and marketing activity. After all, the more you understand your customers, the better you can serve them.
In the past, this activity used to be based on which customers previously bought which products or services, but now companies are increasingly becoming more predictive –anticipating what customers will want in the future. One classic example of this is Netflix recommending what you should binge-watch next, based on your viewing preferences.
One of the big benefits of knowing more about your customers and markets is being able to give them exactly what they want: specifically, smarter products and services that react to each user’s unique needs and habits.
The Nest smart thermostat is an excellent example of this. These incredible devices monitor activity in your home and detect behavior patterns. Then, based on what it knows about how you use your home, the thermostat dynamically adjusts the temperate to keep the home comfortable, without wasting energy where it’s not needed.
