Gartner predicts that data will be on your balance sheet in a couple of years. Today, when corporate transactions are conducted, it is already there. In a due diligence process that evaluates the value of a company data is often the biggest asset. Our experience has shown that companies which have their data assets in control are more resilient and competitive than their peers.
There are many ways of estimating the value of a data asset. The first thought that often comes to mind when we start discussing the value of a data asset is how can I sell the data? In what format should the data be for it to be valuable? Should the aim be to create more value with data with less resources? We think that data is more of a raw material than a product that you should sell. Just look at the data behemoths, Google and Amazon. When was the last time you heard they were selling data? We believe they have never sold any data because it is their most valuable asset that enables future growth and profits.
If you see data as the most important raw material of the value your company is producing, you’re bound to come across a key question: Who is the master of your data?
Do you have monster data?
Data management is something that most companies are doing in one form or another. In reality, it has turned out to be many times more like monster data management. If you fear your company has slipped into monster data management, you most likely have multiple data assets for different purposes and you constantly integrate them point to point. When the environment and systems containing data are in constant change, you need to code more and more complex integration between different systems mastering the data. Consequently, the data becomes an uncontrollable monster.
It is also common that companies have many master systems that control the data for a single purpose, for example, an ERP or CRM. This is a critical issue, because you can have only one master of the data; otherwise you have a serious risk of creating monster data. Technically, the most important thing is to have one master data that is a data source and uses a case independent data asset. This does not mean you should not have data in your CRM. This only means that when it comes to your common data assets, CRM is a data source and uses a case independent data asset, but the core master data should be the up-to-date data that feeds all operative, analytical and reporting systems.
Plan the big picture carefully!
There is also a very common business model, where CRM, ERP, marketing automation, and other business critical software vendors are expanding their service model to analytics and end customer interfaces. In the short term, this may make things easier because they offer ready to use components. This is the right moment to carefully plan the overall data picture and architecture. Otherwise, in the long term, you may end up in a situation when the potential of the data is not fully utilised. Instead, there are data silos, vendor locks, a lack of co-operation, or even shared custody of data.
There can be only one master of the data and it has to be the company itself. Getting more out of different operational applications and being able to easily change business models, tune processes or even change pieces of software is business critical when a competitive advantage is dependent on the ability to cultivate and utilise data. This is crucial, especially when the world around us is changing rapidly, and you need to be able to adapt or transform quickly.
Data needs a C-level owner
In addition to keeping your data under your own control, you also need a business owner responsible for the data as a business critical asset. In successful data journeys, data ownership is in single hands, high in the corporate hierarchy. Using the data asset is not just technology. It changes ways of working, talent acquisition, and other fundamentals in corporate culture and cannot be lead as an IT project or support function.
No more point-to-point integrations and oversize development projects, but centrally managed data source and use-case-independent data asset.
How to get started?
The change is not easy, and it does not happen quickly as you probably have many different shared custodies of your data assets. Companies possessing monster data are easy targets for competitors with the ability to utilise their data to create more value with less resources, especially in times like these when the demand for sustainability and the Corona pandemic are turbocharging the digitalisation of different business areas.
- Help your top management find the importance of data!
- Appoint a manager and an architect for the data battle against monster data!
- Agree clear guidelines and rules for the data work and keep them – otherwise the monster is back again, and your new development takes years instead of months!
This is the second part of our blog series focusing on building resilience for business. Read also other posts Life has changed fundamentals haven’t, Strategies’ direst straits – steps to resilient and adaptive strategy, How to build a portfolio for resilience and adaptive strategy and Data science and AI investments – How to increase business value and enhance change resilience?
Watch the event recording and hear the latest insights from our customers KONE, OP Financial Group, Finnish Church Aid, Telia and Kalmar and how they have embraced change.