Data is not only rapidly growing in terms of volume, but also in terms of significance and strategic value. Experian’s latest research into the Chief Data Officer (CDO) “Rise of the data force” illustrates this clearly, showing a significant trend in the adoption of a CDO role to support this “tsunami of data”.
Our original research “Dawn of the CDO” told us that 92% of CIOs would like to see a CDO role created at some point in their organisation, but despite that intent there are still many organisations without a senior business executive responsible for data right now. This task often falls to the CIO who has to contend with a multitude of additional responsibilities, leaving data practitioners to beat the drum for investment and leadership in data strategy.
To recruit and implement a CDO type role requires investment and amongst our clients we see that age old question time and time again – how to justify a significant investment in data, whether that’s in people, processes or technology, without compelling ROI. In my mind this reminds me of the age old question, “what came first the chicken or the egg?” because it’s difficult to demonstrate ROI without first having the very resource that you’re trying to secure to deliver it.
Fortunately there are a number of ways to negotiate this issue and move investment in data up the agenda, here’s four that I’ve seen work successfully.
1. Use compliance and regulation as an opportunity
In our experience the CDO is far more prevalent in highly regulated and governed industries. This highlights something that came up in our latest research, which is that regulation can be used as an opportunity to drive change in attitudes and processes. Historically this has been the case with the likes of Solvency II in the Insurance industry and now BCBS 239 and new rules for the Financial Services Compensation Scheme in the Banking Industry. The high profile nature and the significant risks associated with regulation means that the investment in data naturally becomes a strategic consideration at board level.
2. Align with business goals
Often data is seen as its own independent project, whereas in reality it should be at the core of what any organisation does and therefore aligned to whatever key business drivers are in place. For example, if a strategic goal is to reduce customer attrition and increase customer satisfaction then this can be used as justification to invest in the improvement of customer data management and the roles responsible for customer data. The justification here being that an improvement in the quality of data and the way it is used would be a significant boost to the wider business goal.
3. Make use of free data profiling and allocation of value to data
Even without the availability of immediate finance to back a data driven project, data profiling can be an easy way of demonstrating issues within data. Add to this the attribution of cost that these issues are causing or indeed the monetary uplift that fixing them could provide and a clear business case can quickly emerge. There are various free data profiling tools available, such as the free Experian Pandora profiler, which can be used to highlight areas of improvement and present these to senior stakeholders in the business. This can then be used as a justification for investment in people, processes and technology, something recently covered in our blog “How to ‘monetise’ your data assets”.
4. Promote quick wins and communicate
Going back to the question of “which came first, the chicken or the egg?”, there’s also a middle ground, where data can be gradually pushed up the agenda. Realistically, neither the chicken nor the egg appeared out of nowhere, rather there would have been a gradual evolution towards their existence. Similarly investment in data will rarely happen in the blink of an eye, and can be driven by finding small, tactical, quick wins and publicising these within the business. If, for example, someone in the supply chain has an issue identifying stock expiration, see if there is a way to help solve that problem and potentially fix the process that causes that data quality issue. You can then publicise and communicate that success throughout the organisation, perhaps through email communication or over the company intranet. Senior management will slowly start to see these successes and will want to replicate them in their down line. Slowly and surely momentum will grow, attitudes will change and eventually investment can be more easily justified.
Putting it into practice
We often hear customers tell us that they find that there isn’t enough data evidence to prove the driving factors. This is where an audit of the actual data, to evidence the situation can help. We do this on a regular basis, putting one of our experienced consultants on the ground with clients to do a full data assessment to evidence the data issues, often linking identified problems with monetary or relative values. This has been successful in supporting customers to justify larger data quality exercises with minimal initial investment.
In a time of real development in the way organisations are looking at data there’s more demand than ever for the right people, processes and technologies. It’s encouraging to see data become a board level issue but even for organisations that don’t yet have senior data representation there are still many ways to gain investment. I would recommend Experian’s expert consultants in conjunction with our data management software Experian Pandora if you’re looking for support with this.
How have you tried to generate investment or increase the perception of data within your business? Have you had any successes or any challenges? Please feel free to comment below.