Data integration on its own is not enough. For real success, an organisation also needs to exploit data and analytics right across the business, embedding them in activities at every level, from the boardroom to the front line. In short, the organisation must become data-driven.
Why would you want to do that? The short answer is for strategic and real-time operational advantage. For instance, the data-driven organisation can proactively deliver continuous, and often real-time, insights across the business. Those can then support strategy and planning, decision-making, and digital engagement with customers, partners and suppliers.
In our research, we defined four stages on the data maturity journey that lead to becoming data-driven (see graphic below). We asked survey respondents a series of questions – about their organisation’s data management, culture and systems, for example, and its performance on a range of key business outcomes – and used their answers to build a scorecard. Of course, correlation is not causation, but the clear correlation we saw between data maturity and business performance is unlikely to be a coincidence.
Of course, getting to be data-driven is no easy task. It flags up a whole range of issues around data ownership and culture, for instance. Those, in turn, touch on people’s roles, authorities, responsibilities and liabilities, and the importance – and difficulty! – of creating a trust environment across your business units and IT.
It’s a people problem
As our research into data maturity has confirmed, all those old problems of people not sharing or volunteering data remain present in many organisations. In particular, there is still far too much use of data ownership as political currency or power.
If you doubt this affects your organisation, there are a few simple questions to ask. First, do people refer to it as “my data” or as “company data”? That is important because part of being a data-driven business is to treat data as a shared corporate asset (unless, of course, it is protected personal data, commercially confidential, or whatever). And in many cases, that’s going to require a mindset change.
In other words, becoming a data-driven organisation might at first look like it’s mainly a process and technology challenge, but like so many other things in IT, in reality it is primarily a people problem.
The CDO route to data success
One way that organisations aim to build this data-driven culture is to appoint a chief data (or digital) officer. There are a number of caveats, however.
First, the CDO needs to have authority, which typically means they need to be board-level, and they need to be able to call on the funding – and perhaps staffing – that they are inevitably going to need. That, in turn, means that the company has to commit to all of this at a senior and political level.
Also important is that the CDO needs to be a people person. Someone who is persuasive and good at conflict resolution is going to do a lot better and get further than someone with master-level skills in, say, building databases.
They will also need their people skills to help with the external trust issues. That is because your CDO won’t just be dealing with data access and governance inside the organisation – there is the whole external value chain to consider too. There’s a lot of benefit in passing records up and down the chain, but how comfortable will you and your business partners be with sharing all that data?
So you need to think hard before you start trying to get your supply chain data-integrated as well. After all, your suppliers have other customers too, and your customers have other suppliers. How far do you want your data going, how are you going to govern its usage, and to what extent can you expect others to do things your way? Trust is a big consideration here.
But motivation is still key overall.
No matter how much technology you put in place – and the huge number of technical options to choose from is a challenge in itself – that won’t give you a data-driven organisation. As I mentioned, that will also need a mindset change and, equally importantly, there has to be the motivation to make it work.
And that motivation needs to continue, because the data-driven organisation is a living thing that needs to be nurtured. It’s said about so many things, but it’s as true here as anywhere: being data-driven is a journey, not a destination.
For more on this topic, please read our report The road to becoming a data-driven business.