For today’s businesses, data is an invaluable resource. With so much data being produced, it’s easy for organizations to struggle with maximizing that data’s potential. Gathering, sorting and using data becomes difficult without an effective strategy for processing and optimizing it in place. Developing a business data strategy can help businesses overcome these challenges and access the value of their data while efficiently using their resources.
A data strategy is a vision for how a company will collect, store, manage, share and use data. Creating a data strategy involves outlining how your organization will use data to maximize productivity and efficiency. With an effective data strategy, data becomes a resource that works to meet your organization’s goals.
Every organization’s data strategy will look a bit different, but generally, the main elements of a data strategy will mean you should:
A data strategy should be specific and actionable, but you should also be able to adjust it as circumstances change.
You can see examples of effective data strategies across various industries.
A retail giant might implement a data strategy focusing on customer behavior analysis to personalize marketing efforts, enhance customer experiences and optimize inventory management. In health care, a data strategy could involve leveraging patient data to improve treatment outcomes, streamline operations and enhance research initiatives.
Financial institutions often deploy data strategies to improve risk management and tailor financial services. Technology companies might adopt a data strategy that harnesses user data for product innovation and enhances user satisfaction. Governments implement data strategies for policy-making, resource allocation and improving public services.
Each data strategy aligns with specific business goals, incorporates actionable plans for data activities, outlines organizational changes and more. These strategies are highly adaptable to changing circumstances, making them crucial for maximizing the value of data activities and propelling organizations toward increased profitability and sustainable growth.
So why is it essential for a business to have a data strategy, and what benefits does having one provide? Data strategy helps organizations:
Incorporating certain data strategy principles into your plans can help give them direction and move the company toward its goals. Some essential data strategy principles include the following.
Eliminating data silos makes data more accessible and fosters collaboration between different departments within an organization. One goal of your data strategy should be to integrate all your organization’s data into one system that people across the company can access and use. Doing so helps people get data more efficiently and can enable new data-driven projects that, otherwise, no one would have even thought of.
A data strategy can help you establish consistent processes for collecting and sharing data. Having established procedures means you can collect more data more efficiently and that the data you collect will likely be of a higher quality. It also keeps your information consistent and well-organized, which makes it easier to use and helps you derive value from it.
One way to make your data more shareable and usable is to establish rules for naming element data and representing data value. You also need a way to reference and access metadata. Creating a glossary of business data terminology can help with this.
Defining goals for data management and use is crucial to data strategy success. Your goals will drive your data strategy and activities and help you improve how you handle data. You’ll likely set both short-term and long-term goals. Short-term goals enable you to monitor your progress, while long-term objectives create a vision that guides and informs your activities. You can set goals related to each component of your data strategy, including data collection, storage, sharing and more.
Your data strategy should also outline steps for ensuring your information is accessible. How you store your data is essential for increasing accessibility. It’s crucial that you find a way to store data so people can quickly find and access the information they need without having to create copies of it themselves.
Raw data has tremendous potential, but you won’t be able to take advantage of it until you convert it into a usable format. Data typically comes from many different sources, meaning it’s in various forms. To make data more actionable, you need to transform, correct and format it consistently, making it easy to use. Putting your data in a consistent, usable format will reduce the number of steps employees need to take before they can use it and make it easy to share within your company.
Data governance refers to setting rules and standards for how individuals and groups within an organization manage data. When such rules are in place, individual developers don’t have to make decisions about how to process, manipulate or share data every time they work on a project. Instead, they can use data governance rules to make these decisions. The goal of data governance is to make data easier to access, use and share.
Your data strategy should also prioritize data security and compliance. Your organization must follow the relevant regulations to avoid fines and legal issues. A robust data strategy incorporates measures to protect sensitive information, establish access controls and adhere to legal requirements.
Your data strategy should also employ encryption and authentication mechanisms to fortify data security. Finally, developing a plan that outlines what to do in the event of a data breach will help identify the issue, recover data and ensure the issue does not happen again.
Similarly, your data analytics strategy should define guidelines for how employees should analyze and use data. Data governance can address this, and your business goals should inform how you interpret and apply your data. Although learning new rules may slow developers down at first, the long-term benefits will make up for this initial learning curve.
Below, you’ll find seven steps for creating a data strategy. Through every stage of developing your strategy, your company’s data goals and how you plan to use data, whether for targeting ads, content personalization or another purpose, will drive your process. The seven steps are:
The first step to building a data strategy is creating a proposal and using it to earn buy-in from across your organization. You’ll need buy-in from executives to get the approval and resources you need to implement the strategy. Obtaining buy-in from others at all levels of your organization is necessary for getting the participation you need for your implementation to be a success.
To get buy-in from company leadership, you’ll need to show how the strategy will benefit the organization. The economic logic included in your report will be crucial for this. It can also be helpful to show how competitors are using data to gain an advantage. Provide clear examples and use data to back up your claims.
You’ll also need to get department leads, technology partners and other employees who will use or help manage data onboard. Getting as much buy-in as possible is crucial, as the more people actively participate in your strategy, the more successful it will be. Giving people a sense of ownership over the process will help improve your results as well.
Keep in mind, that earning buy-in can take some time. You may need to revise your proposal several times to convince people that building a data strategy is worthwhile and feasible.
Once you get the agreement you need, you can start to create your data management team. Choose senior-level managers and department heads who have an understanding of the value of data and the data-related challenges you may face, as well as the business’ technological and organizational capabilities, opportunities and limitations. The team should consist of people from across the organization with a wide range of viewpoints — not just people from the technical side of things. Assess your in-house talent to find the right fits and hire from the outside if you don’t have the necessary expertise or you want a dedicated team member who focuses exclusively on data governance.
This board will help create and implement the data strategy. The data management team will be in charge of allocating resources, establishing and improving policies and dealing with data-related issues as they arise, as well as various other data-related tasks.
Once you’ve assembled your team, assign data governance roles to its members. This step includes determining who is responsible for ensuring compliance with standards, deploying technologies, providing updates to employees about policy changes and more. Having well-defined roles helps ensure the necessary tasks get done and promotes a sense of ownership among your team.
The next step is to determine what data you’ll collect and how you’ll get it. Your business goals will determine the kinds of data you need. For example, if you’re a publisher and you want to tailor your articles to the topics your audience is most interested in, you’ll need to gather data on their interests and the types of posts they read. You might get that information from observing which articles different groups of readers click on most on your site. You could also check your viewers’ social media profiles to see what pages they like and what topics they post about.
On the other hand, your goal may be to target online ads to gain new customers for your business. To do this, you could collect demographic data from customers who visit your website and purchase products from it. You could then purchase second-party or third-party data that matches those demographics and target ads to those people. Because they are similar to your current customers, there’s a higher chance they’ll become customers.
A cornerstone of building a data strategy is determining specific, measurable goals. Your goal-making process should strive to:
Once you’ve set goals, you need to outline plans for how you will achieve them. These plans will make up the roadmap for your data strategy.
You should have a plan for how you’ll accomplish every goal you’ve set. These plans should be specific and include who owns the goal, what process and technology they will use, how much it will cost, how long it will take and the intended outcome. These plans should also be relatively flexible so you can adjust them if you determine something isn’t working as you expected or circumstances change. As your projects progress, you should regularly evaluate them to determine what’s working well and what is not.
Your data strategy roadmap will outline how you plan to achieve your ultimate long-term goal and vision, as well as how you will achieve the smaller short-term goals that will help you fulfill your vision.
Your data strategy should also include policies related to data storage and organization. These aspects of data management are crucial, as they help determine how actionable and shareable your data is.
Data storage is a relatively simple technology capability, but methods for storing data can vary significantly from company to company. When creating your storage plans, you need to consider how much storage capacity you need, but you should also consider how your approach to storage will impact data sharing and usage. The way you organize your data impacts how easy it is to access, understand and use. Your storage solution also influences how easy it is for different departments to share data.
Ultimately, your goal in creating a data storage and organization plan is to make your data as accessible, shareable and actionable as possible for the parties that may need it. Different approaches may work best for different companies, but, generally, you should store your data in an easily accessible system in a consistent format.
Once you have your goals and roadmap laid out, your data strategy is ready to go. You can then package it into a business plan and present it to company leadership for approval.
This business plan should include all the strategies you’ll use to achieve the company’s data goals and the resources you’ll need to implement the strategy, including capital investments, new hires, new processes and new organizational structures.
Once you gain final approval from company leadership, you can begin implementing and improving your strategy. As mentioned earlier, this will be an ongoing process. You should regularly review the plans and your company’s progress toward your goals, and adjust as needed.
In the dynamic landscape of data management, fostering a culture of continuous improvement and adaptation is essential for ensuring long-term success. Once you’ve planned out and implemented your data strategy, you need to create a framework for supporting it.
With metric data, your organization can see where improvement needs to occur and how your strategy is succeeding. Here are two of the ways monitoring metrics can ensure alignment with organizational goals and overcoming challenges:
As organizations strive for excellence in their data initiatives, the notion of a static, one-size-fits-all strategy becomes obsolete. Instead, organizations should embrace flexibility and proactive responses to emerging trends and challenges. Let’s look at how iterative updates help your data strategy maximize its potential:
Implementing a new data strategy requires proper employee preparation. Creating a culture that values data and integrates it seamlessly into organizational operations is key to sustaining data strategy success. Here are some tips to help you get your organization on the same page about data.
All of your organization’s employees need to understand your data strategy and the tools necessary for carrying it out. Encourage employee mastery through:
Data strategy requires support from everyone in an organization. Building this collaboration helps your data strategy to be as flexible and productive as possible. Invest in collaboration through:
As data becomes more valuable to businesses and the volume of data continues to increase, building a data strategy is becoming increasingly crucial for companies of all sizes. A good data strategy will help you use your resources more efficiently and maximize the value you can get from your data.
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At Lotame, we recognize the pivotal role a data strategy plays in optimizing your organization’s mission. Drive growth, enhance revenue and stay ahead in the dynamic digital space — make Lotame your trusted partner in navigating data-driven strategies and goals. Partner with us today and let’s start finding smarter, faster, and easier ways to drive growth and derive value from your customer data – whether you have it or need it.
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