Maintaining an eye on the future is so important to businesses - and it’s why data leadership is of rising value. Although currently there’s a great deal of economic uncertainty, the data community should feel optimistic; this is the opportunity to demonstrate business value, benefit colleagues and play a role in efficiency and sustainability initiatives.
Efficiency will dominate business discussions and actions in the coming year as organisations deal with the impacts of inflation, conflict and supply chain issues. For efficiency to be effective, businesses need to carry out a significant level of review to ensure that efficiency drives do not impair products, services or the relationship with the customer. Data is instrumental in that review process. Many organisations will find that they need to move away from generating big data and instead focus on making more efficient use of the data available. Gartner predicts that by 2025, 70 percent of organisations could find they need to move away from big data.
Why have a data strategy
With the right type of data strategy in place, organisations can leverage a data-driven approach wherein they have a true understanding of where they are currently as a business, where the business needs to go next, and what strategic assets it has to get there. In addition, data can reveal industry trends or disruptions caused by technology or market conditions.
Strategic data users can identify the friction in their business models and processes. Friction is all too often the cause of poor efficiency, whether it’s low productivity, unreliable service level agreements or a lack of training and skills. As McKinsey found in 2022, the use of data-driven processes is often “sporadic” across the business and too many business lines use traditional methods instead of data to solve business problems .
Our customers at Fivetran are using their data to analyse and identify efficiencies in the supply chain, distribution channel, fleet management, business processes and uncover and deal with those frictions that are reducing efficiency.
Data leads to answers for those difficult questions business leaders are challenged with. Yet business advisory firm McKinsey finds that data-driven businesses achieve sales growth of between 15 and 25 percent in business-to-business lines.
To evolve into a data-driven business, the senior leadership team needs to embrace data and data leaders. The reporting lines need to direct to CEOs, and Chief Data Officers (CDO) need to take their place alongside the finance, technology, marketing, human resources and operations leaders that have traditionally dominated the top table.
Organisations that have recognized this are already benefiting, Gartner finds that 51 percent of data and analytics leaders have a leadership role in enterprise digital transformations. If organisations want to be more efficient and be data-led, then the remaining 49 percent of businesses need to create the environment for data teams to succeed. That requires the business to ensure all areas of the organisation know how to work with the data team and garner value from the insights they generate. Gartner adds that clarifying the accountability of data leaders leads to significant success.
In every market and geography, we are seeing organisations begin to develop a data-led culture to both deal with the challenges of the here and now, but also to shape a new future for their business. Data leaders are therefore set to sit central to the future of organisations.
Equally, data leaders and teams need to ensure their work and outcomes are aligned with the business and its priorities. Again, Gartner finds that data leaders with “business-facing key performance indicators (KPI) generate more influence and impact across the organisation. Without that alignment, the power of data to drive business value is lost.
A better understanding
The data opportunity is more than just a short-term efficiency gain. Leading businesses are using data to gain a deeper and more informed understanding of every element of the organisation. McKinsey reports: “data-driven culture fosters continuous performance improvement to create truly differentiated customer and employee experiences.” This is leading to finance optimisation, lean inventory management, customer journey insights and buyer behaviour studies.
This informs investment decisions as data-centric businesses can maintain that eye on the future. And that future is changing dramatically, as customers and legislators demand sustainability from our organisations due to the climate emergency. If sustainability is a value driver for business, then data is essential in empowering our organisations to reduce their impact on the world’s natural resources.
Having the right data to support the right decisions has never been more critical. Data leaders and their teams must play their part in humanising data, which will allow the business to zoom out and really understand what’s happening. Organisations will make assessments, leading to more effective and impactful decision-making, which in turn will benefit customers, colleagues and ultimately, the bottom line of the organisation.
There are many challenges ahead for data leaders and their teams, but also a host of opportunities to play a much more integral part of organisational strategy.
Danielle is currently Senior Director of Sales Acceleration and Strategy for Fivetran EMEA, and has spent 20 years in leadership roles within SaaS and service organisations. Connect with Danielle on LinkedIn.