BUILDING A DATA-DRIVEN

ORGANIZATIONHOW TO LEVERAGE DATA TO GROW YOUR

ORGANIZATION LIKE NEVER BEFORE

IntroductionData does not make decisions – people do. Having all the relevant data in the world makes little impact if it is not properly leveraged by decision-makers. Conversely, having dedicated, data-driven leaders in every key position of your organization will hardly matter unless the right data is made available. This e-book outlines the prerequisites of a true data-driven organization – and the critical steps towards building one.

In today’s digital economy, data is an incredibly valuable resource. While many refer to data as the new oil, we prefer to think of it like water.

Like data, water is everywhere. We find it in the greatest of oceans, lakes, small ponds – and even inside us. But while it might be everywhere, it takes on several forms, and varies greatly in purity. Clean, consumable water is scarce. This is also true for data.

They also both flow – some quickly, some slowly – finding the path of least resistance at every turn. Every data manager knows that if you want to make sure data from the right source ends up at the right place, you need to plan this flow carefully . And along the way, you better have proper treatment facilities ensuring its quality – muddied waters always lead to bad decisions.

So the question is rarely whether or not your organization has data. The question is: What does your organization do with it? Do you let it wash away, or do you create the necessary reservoirs, treatment facilities and distribution networks to harness its true power and – give your organization access to something they can use? And finally, do decision-makers trust its purity, quality and authenticity?

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Why a data-driven organization?There are numerous advantages to being a truly data-driven organization. At its core lies gaining a competitive edge through better decision-making and increased efficiency. A data-driven organization can simultaneously increase revenue and reduce costs, all the while bolstering the quality of products, reputation and organizational processes.

Increased revenueThe mechanisms through which this happens, are many. First of all, a data-driven organization can trust that it always makes informed decisions upon a foundation that is always reliable and up to date. As such, you remove whim and guesswork from the equation, while simultaneously negating the garbage-in-garbage-out problem.

This means data can fully function as decision support for operational systems and processes, which can range from sales, production and marketing, to maintenance, logistics, service delivery and other industry specific needs. A data-driven approach also allows you to more nimbly adjust to market changes, responses and feedback – streamlining your production, and accelerating time to market.

Additionally, a data-driven organization paves the way for being more innovative, proactive and agile, letting the data reveal new business opportunities for which to adapt. On top of this, the organization frees up human capital that can be allocated towards efforts of creating additional value.

Reduced costsWhen operational, administrative and decision-making processes are powered by data, you also empower your employees, equipping them with the tools to increase their autonomy and strengthen their decision-making foundation. This allows for a leaner, more efficient organization – and reduced dependency on external assistance.

Cost of doing business can also be reduced directly through more efficient, data-driven processes – both administrative and operational – such as overtime or inventory management.

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Increased qualityQuality in this context is highly connected to accuracy in decision making, sustainability and reputation.

More data-driven, and hence more qualified decisions, run all the way through your organization, ensuring:

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1 increased trust

2 improved environment, health & safety (HSE) procedures

3 fewer deviations and reduced loss during production

4 increased product quality

5 increased customer satisfaction

As for corporate reputation, having precise, actionable data available – and the know-how to apply them – allows you to:

At the same time, there is a strong signaling effect in being at the bleeding-edge of what is often referred to as the fourth industrial revolution. Being a truly data-driven organization, a driver of innovation – and loud about it – increases brand awareness, augments market sentiment and attracts tech-savvy, aspiring young talent.

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1 make better business decisions that in and of themselves enhance reputation

2more precisely communicate with target audiences, where market data are available, strengthening organization-stakeholder relationships

DID YOU KNOW?

Over 90% of all the data in the world was created in the past 2 years; The total amount of data being captured and stored by industry doubles every 1.2 years

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Ready to take the next step?BI Builders helps organizations become data-driven. We combine powerful data platform

automation with industry experience to improve decision making, reduce cost, and accelerate productivity.

Get in touch to learn how

What exactly constitutes a data-driven organization?A data-driven organization manages data in such a way that it creates a single version of the truth. This means and requires that the data is both relevant, reliable and available. Furthermore, this data is then used as a foundation for making business decisions.

The way we see it, the foundation of a truly data-driven organization, rests on these three pillars.

We will explain what each pillar means, why we consider them the building blocks of a data-driven organization, and provide pointers on how to construct them in your own organization.

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Illustration 1: Data-driven organization

Data-driven Organization

Holistic and Relevant Data

Available

Data Strategy and Data

Governance

Culture & Competency

Technology

Business Strategy

Business strategyWhile technically not a pillar, you can consider this the support beam to which all other pillars are attached. There is more to this than just architectural soundness.

Building a data-driven organization must be rooted in your organization’s business strategy. This means both clear budgetary allocations and leadership involvement. It is crucial at this stage to start with your business needs, not technology. The main challenge is almost never a lack of tools or technology – it is knowing how to leverage what you have at hand to create additional value or a competitive advantage.

In our experience, you need to start by asking the following key questions:

● What are the most pressing business needs to which more and better data could be the answer?

● What is our actual level of ambition when it comes to gathering, storing and sharing data?

● What KPIs are relevant going forward?

These are questions that need to be answered at a strategic level. Again: At this stage you should be technology agnostic, and remain laser-focused on your actual business needs.

Furthermore, our experience is that corporations tend to narrowly target their budgetary resources into procuring and implementing technology – neglecting needed allocation to the other two pillars. It is not about technology alone. Technology is primarily a foundation – an enabler. Modern tools and technology will not by themselves automatically result in a data-driven organization if the users cannot or will not use them.

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“Without data you’re just another person with an opinion”

W. Edwards Deming, Data Scientist

Holistic and relevant data availableMost organizations already have a wide variety of data available already. Some are internally sourced, others external. They will be structured, unstructured, and somewhere in between. Volume and velocity will vary.

So what do we mean by holistic – or relevant, for that matter? When we say holistic data, we refer to data that concerns the whole organization – across all organizational silos and levels. Remember the single version of the truth we talked about? This shared insight is constructed first once you are able to paint a complete picture across silos like ERP, CRM and operational data.

Holistic data spans the entire organizational value chain, from operational data such as orders and deliveries, to controlling, financials and other administrative data.

As for relevance, we consider this a key data quality aspect. Essentially, it means the right data, at the right time – for the right purpose. And consequently: how well the data can support a specific need or decision.

Based on our experience, it is once again important to start by mapping out your data and business needs and priorities. Keep in mind that most data use cases fall into three broad categories, with the timeframe as a key separator: operational decisions (seconds, hours, days), tactical decisions (days, weeks) and strategic decisions (months, quarters, years).

Strategic decisions typically address high-level goals related to growth, profitability, HR & employees, regulatory compliance and sustainability. Tactical decisions are typically about where to focus resource spending and how to detect new opportunities ahead of competitors. Pure operational decisions could be everything from monitoring critical processes for a production facility to speeding up the application processes for a municipality.

Additionally, your available data might be more or less relevant to the extent that they can nurture R&D initiatives. Examples of needs driving innovation measures could be related to a company’s deliveries, like product development, price elasticity or supply and demand matching – or customer relationship management.

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Data strategy and data governanceThere has never been more buzz around transparency, data sharing and open ecosystems. Simultaneously, concerns around privacy are growing, and we are dedicating ever more resources to building sophisticated methods of access control. In a way, these forces are working against each other. At the same time, it is apparent that data governance is more than just a fad – becoming increasingly relevant for every part of the organization.

This means that whatever data you are collecting, structuring and acting upon, you need crystal clear governance rules. These rules are necessary to meet regulatory compliance, and could for example govern how we share and work with data across the organization.

Data strategy needs to be anchored at the very top of your organization. In our experience, governance rules should be detailed as leadership develops its business strategy. The three pillars plus technology, however, represent the implementation of this strategy relating to the use of data as a strategic resource.

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Culture & competencyThe graveyard of data and analytics projects is filled with great ideas. We have seen the proof of concepts, the pilot projects and the headstrong initiatives. Many of them are superb – on paper. The payoffs seem bright as day, the ROI is a no-brainer and the technology is sound. Even the implementation can seem smooth as butter.

And yet, months later, the tools are collecting dust – before the project gets shelved altogether. What on earth happened?

More often than not, the problem is that the organization simply was not culturally prepared. Yes, becoming a data-driven organization is partly a data, strategy and technology project, but it is just as much a change management process and cultural project. If you want user adoption, you cannot forget the user.

In our experience, it is crucial to remember the importance of leading by example. Leaders should, whenever possible, actively use data to substantiate claims, decisions, ideas and business cases.

Becoming a data-driven organization also requires a certain level of digital maturity or competency. However, you cannot simply give every user a crash course and expect lasting change. This shows how culture and competence are closely linked. Knowledge expires, and change in people’s behavior takes motivation and time. If you want to not only get ahead, but stay ahead, you should aim for a curious, data-driven and data-seeking culture – driving competence forward continuously.

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DID YOU KNOW?

If you burned all of the data created in just one day onto DVDs, you could stack them on top of each other and reach the moon – twice.

One way of fostering this is to schedule regular data-competency training sessions across the entire organization. As the landscape is rapidly changing, having such a culture is a necessity if you want to keep the competitive edge that being data-driven provides.

The very first step any aspiring data-driven organization should take is to map out their organization’s digital maturity. Where are we right now in terms of culture and competency? And subsequently, how does this map onto our level of ambition as decided in the business strategy?

Whatever disparity is there, highlights the path for which educational or culture-building measures to implement – whether it is training, inspirational workshops or motivational storytelling.

Secondly, zooming in, there is a second gap between what users expect from IT – and what IT expects from users. With leading tech companies such as Google, Amazon, Facebook & Apple setting the bar for ease of use, data availability and relevance, users might expect tools to be quick, reusable, simple to understand – and providing a clear answer to their business challenges.

IT, on the other hand, might expect users to not only be able to procure data and analyses themselves – but use these without needing guidance.

In our experience, the most important answer to this is building a culture where mutual learning and understanding is a core principle. Only then can you maintain sustainable relationships between disciplines – and have the data-driven culture really thrive.

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Attempts to close this gap have also paved the way for self service BI, essentially tools that make it easy for every user to access and draw key insights from data – without having to consult the IT department.

But even with easy-to-use tools, the key questions remain – and they need to be answered:

● What use cases do we need these tools for?● What types of data can give us the insights to make better decisions – or operate more

efficiently?● What available tools can actually give us the relevant data?● Who in our organization has the right skills and motivation to use this data?● How can we set realistic expectations for both people and software?

Keep in mind that there might be gaps within all 3 pillars, and they might vary across organizational departments and levels. These gaps are never filled by the click of a button, but through gradual changes over time.

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To sum it all up

A truly data-driven organization manages to use data both as strategic, tactical and operational decision support – and to create more efficient business processes.

This is made possible through clear data strategy and data governance, having holistic and relevant data available, and by fostering the right culture & competency. All of this needs to be rooted in the organization’s business strategy.

With all of this in hand, we wish you good luck on your path to becoming more data-driven!

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Ready to take the next step?BI Builders helps organizations become data-driven. We combine powerful data platform

automation with industry experience to improve decision making, reduce cost, and accelerate productivity.

Get in touch to learn how

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