Big Data. Its size is increasing just as much as its importance. To put it in perspective: we currently create as much data every two days as we did from the beginning of time until 2003. We produce around 2.5 exabytes of data each day. If you were wondering, that is around 2.5 billion gigabytes. Each day. The amount and value of data will still increase significantly the coming decades due to the Internet of Things (IoT) and Industry 4.0.
Over the years data has proven itself in becoming an inadmissable asset in business. No matter the industry, every business will have to learn how to mine, manage, and monetize data in their very own way. There are some good examples of companies that have succesfully integrated big data in their strategy (O’Neill, 2019):
- Amazon uses it to improve customer relations and advertising;
- American Express uses anonymous data to analyse and predict consumer behavior and offer business analyses and benchmarking to provide companies with insights on their performance compared to their competitors;
- General Electric uses data generated by sensors from machinery such as gas turbines and jet engines to provide real-time data to improve working processes and reliability.
Whether a company creates data through internal processes or mines data from external sources, they all have something in common: these companies have created a data strategy that fits their business model and use big data to increase their competitive advantage. However, this does not apply to all companies.
Although data has earned its existential right, what is the overall status? Are all companies actually getting more ‘data-driven’? A recent survey (NewVantage Partners, 2019), which was conducted under 64 c-level executives from large corporations such as General Electric, General Motors, Citigroup, Deutsche Bank, GSK, and many more, showed some disturbing results:
- 72% of the participants stated that they still have to create a data culture;
- 69% admit they have not developed a data-driven organization;
- 53% declare they are not treating data as a business asset;
- 52% report they do not compete with data and analytics.
These are some of the main findings of the survey and they illustrate that a majority of these businesses have not yet figured out how to correctly implement data into their strategy. Furthermore, the companies in this survey are some of the largest corporations in the world, so the status quo regarding smaller companies might be even more alarming. Considering the serious impact data can have on a firms’ performance and their competitiveness it might be interesting for every company to either develop or evaluate their ‘data-driven’ capability.
So, how do you strategize data?
Of course, defining a ‘good’ data strategy is completely company/industry specific and by looking at the results from the survey it also is a highly complicated operation. Therefore, as a strategist, how do you effectively incorporate data into your business strategy?
The first step in developing a data strategy is to map the strategic priorities and key business objectives of a company. Once these are clear, any executive can identify in which way data can support the company to achieve their strategic goals. For example: data can be used to improve decision making, develop a better understanding of market and customers, improve business operations, and it can even be monetized to increase the overall value of a business.
The next step is to identify which requirements are needed to effectively source and collect data. An immense amount of data is created each day and it is essential to specify what kind of data truly fits the strategic priorities. Data can be structured, unstructured, semi-structured, it can be financial data, sales data, HR data, sensor data, social media data, conversation data, photo and video data, and the list goes on and on. Since there is a huge abundance of data in the world it is fundamental to also determine which data you do NOT need to improve the analytics.
Another important step to ensure that the collected data does not become a liability is data governance. Data breaches occur every day and can profoundly damage the reputation of a company. For example:
Storing data safely is an art which has definitely not been perfected by a lot of companies.
Finally, having the right skills and capabilities to turn all the collected data into useful insights is critical. Should a company partner up to share skills and knowledge, or acquire a company to fully exploit new skills and capabilities? Or is attracting and retaining new technological talent the way to go? Getting this right can leverage a company to the next level, getting it wrong can be a very costly mistake.
I wrote this article as just a small insight into the world of big data. If you are interested in the ever growing importance of data and strategy, I definitely recommend you to read the book ‘Data Strategy’ by Bernard Marr. It is easy to read and very useful to gain knowledge about data on a strategic level.
NewVantage Partners. (2019). Big Data and AI Executive Survey. Boston: NewVantage Partners LLC.
O’Neill, E. (2019, September 25). 10 companies that are using big data. Retrieved from ICAS: https://www.icas.com/ca-today-news/10-companies-using-big-data