Creating Value with Data Strategy
Data is fast becoming one of the most valuable commodities on the planet. For your business, the right data used correctly can create significant value in many different ways – from driving sales growth to identifying cost savings and efficiencies. But how do you identify what data you need and the best way to capture it? Many business owners and managers understand the gaps they have in data capture, or know the frustration of not having key data that they know would make a significant difference to their business, but most rarely do anything about it. A simple and focused data strategy is an enabling tool to ensure clarity and create action. It is generally thought that more data is better than less data, however this is not the case. Redundant and low quality data can be a significant and unnecessary burden. Old data becomes stale and has little value. A data strategy ensures that you focus on the right data and that it is captured clean and lean. But what do we mean by captured clean and lean?
Clean capture means that the data has consistency and conformity. This requires purposeful design in the process to capture the data, removing the opportunity for random and poor quality data to be entered. The largest single cause of poor quality data capture is the impact of humans in data entry. Wherever possible and appropriate data capture should be structured to remove human randomness and ensure consistency. This means for example, designing and using structured drop-down menus with pre-defined alternatives instead of free text. This ensures consistency and conformity.
Lean capture means seamlessly incorporating the capture of the data into the relevant business process or activity and only capturing the data needed. This ensures that it is embedded and sustainable. Lean capture also considers the purpose for the data, including the security and privacy implications in how it is captured, stored and used. For example, capturing data about a customer’s age can either be done as a full date of birth or simply a year of birth. Full date of birth data creates a heightened security and privacy risk. In many cases this is not justified. A simple year of birth is just as useful for demographic profiling with significantly lower security and privacy implications.
Key data strategy targets
In most cases there are three primary target areas:
Customer activities and behaviours
Capturing data that delivers insight into customer behaviours allows you to deeply understand your customers so that you can create higher levels of satisfaction and drive higher sales.
Product performance and service delivery
Capturing data that delivers insight into the performance of your products or the service delivery experience to deeply understand your product or service in order find areas to drive further improvements.
Internal business processes
Capturing data at key points of internal processes delivers insight into the elements of the process, key challenges and bottlenecks in order to identifying opportunities to improve processes and reduce time and cost dimensions for your business.
Why do I need a data strategy?
A data strategy can add significant value to your business. It’s not a long technical document. It is a concise (1 or 2 pages) plan focused on the key items to drive action. Keep it clean and lean. The famous quote of W. Edwards Deming that, “without data you’re just a person with an opinion” is certainly true, however having data is only part of the solution - without a data strategy you’ll very likely be a person with data that’s not very useful. Having clean and lean data makes all the difference when it comes to truly adding value.
Contact your PKF adviser today to discuss how a data strategy can help drive your business forward.