The short answer to the question “why is a data-driven culture needed for digital transformation?” is that it allows businesses to remain competitive in the ever-changing global market. Research by Seagate shows that the amount of data available by 2025 is going to be an estimated 175 zettabytes. Additionally, accommodating this enormous amount of data becomes another issue, presuming the data can be used to maximize business value.
The long answer to the same question would be that a data-driven culture can improve efficiency and enhance its core competencies by making changes to improve functionality and control costs. The results of data analysis can project new growth opportunities based on the right response to the insights. A data-driven culture generates continuous insights and helps manage services and products. According to Forbes, using data as the driver for forward momentum results in a leaner, meaner, more Agile organization that can pivot when appropriate to maximize both its internal resources and external opportunities.
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“The chief data officer (CDO) is the best role to maximize the data and analytics value in the organization,” Mike Rollings, Research Vice President at Gartner adds. “If your organization does not have this executive role, push for its creation. Not every company needs to adopt the CDO title, but every company does need someone to adopt the tasks of prioritizing or leading its data and analytics strategies.” The CDO office should have responsibility for data and analytics strategy, data and analytics governance, data literacy among the workforce, and establishing a data-driven culture.
What Are the Challenges of Creating a Data-driven Culture?
Data-driven culture sounds appealing to many organizations but despite the large number of benefits it offers, the process of being a data-driven organization is not easy. Even if organizations have a data management system in place, the limited use of data in the decision-making process of being data-driven is its biggest hindrance. Companies collect data, process it, but do not leverage it to help them make informed decisions.
So, the questions are - despite having large amounts of data, why is there so much apprehension in implementing a data-centric culture, and why it is still a pipe-dream for many companies?
Inefficient Use of Their Insights:Data is an asset and not to be misunderstood as a by-product. For example, data indicates the success of the business and also gives us pointers of the process of the company. Processing data for insights does not create business value, nor does it clarify the return of investment on the business. The challenge is building a connection between the insights generated by the data to solve the problems the organization is facing.
Decentralized Data:Frequently encountered in many organizations is the siloed nature of decentralized data but the democratization of access to data quickly solves this problem.
Low-Quality Data:Irrespective of the data being centralized or siloed, the format and quality of data is another challenge. The quality of data shall determine the reliability and value of the insights produced from the data, and low-quality data can jeopardize the results and reputation of the organization.
Insecured Data:Data storage will bring issues related to security, confidentiality, and compliance. Companies need to pay attention to protecting data by putting in safeguards and following privacy compliance policies, e.g., GDPR.
Implement and Embrace a Data-driven Culture to Gain Its Full Potential
To embrace a data-driven culture, determine the ‘as-is’ state to guide financial and business objectives as necessary. Digital transformations use data and analytics to create concrete and measurable metrics; however, improper communication can derail the ability of the company to implement change. Change is not only related to work allocations but also the nature of business and how data-driven decisions form the basis of decision making.
How Nisum Can Help You Create a Data-driven Culture
Nisum’s expertise in advanced analytics is considered a game-changer for many of our clients. At Nisum, our primary focus for 2021 and beyond is to instill a data-driven approach so that organizations can reshape their business landscape by leveraging the three pillars of Digital, Business Agility, and Insights and Analytics. A data-driven culture is enabled when organizations are able to enhance their digital capabilities, automate functionality to create a performance-oriented, productive environment. To learn more about our services, contact us.