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Data is an essential part of any modern business operation. It provides valuable insights and drives growth in an almost infinite number of ways.
Some examples include:
While the benefits of data are widely understood, the journey to get there is not as clear. This can lead to businesses investing time and money into new technology, data or analytics that are not the right fit and don’t end up delivering to their goals or offering value for money. Or in some instances inaction, with the path so unclear that it is easier to focus on other things, only to be left behind by competitors.
The key to avoiding this is to implement a data strategy; a tailored plan of action identifying exactly what you need to do and when you need to do it, based on industry best practice and your business needs.
1. Focuses efforts on areas of greatest impact (from tactical to strategic)
Your data strategy should align with the overall business strategy, supporting the company in its delivery of data-driven initiatives. It provides a clear plan for leveraging your data to achieve specific business goals, focusing the team on high-impact projects that deliver maximum value while reducing the chances of time wastage on irrelevant or low-value activities.
2. Reduces the likelihood of bad investments
Without a clear understanding of your data assets, requirements, and objectives you are more likely to invest in tools and technology that are not actually fit for purpose. A data strategy helps to identify any weak points in your data processes and tools, providing guidance on targeted improvements that can be made.
3. Enables a data-driven company culture
According to a study by McKinsey, businesses that effectively use data and analytics can see a 29% boost in productivity and a 41% decrease in costs. Implementing a data strategy promotes transparency, improves processes, and builds trust in your data, enabling your team to make informed decisions and gain valuable insights that drive business success. When your team has the data and tools that they need to make good decisions, this leads to a productive culture that places emphasis on using data to achieve specific outcomes.
4. Improves data quality and team efficiency
Poor data management can lead to wasted resources, loss of productivity and missed opportunities. It also can significantly impact your team’s ability to make immediate informed decisions and gain insights that are valuable to your business. Implementing a data strategy addresses these challenges by identifying opportunities for data governance and promoting good data hygiene practices. This streamlining of data processes reduces manual effort, increases efficiency, and ensures consistent and reliable data management.
5. Highlights potential risks and threats
A key component of any data strategy is to identify and evaluate any potential risks and threats to an company's data and then outline the steps required to minimise them. Following these steps will help to enhance risk mitigation and increase business resilience. When company data is stored and managed securely, the risk of unauthorised access, theft, or misuse is significantly reduced. By protecting sensitive and personal information, businesses can build trust with customers, partners, and stakeholders, which can lead to increased customer loyalty, strong brand reputation, and new opportunities.