D. Justhy's Blog

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Why Data Mis-Management Is Killing Your Business, In The Digital Age.

Most companies and their leaders, acknowledge that we are now in the digital age.  In many sectors though, the strategies and subsequent actions don’t reflect this reality.

Data still appears to be miss-understood.  Especially by large financial institutions, such as banks and insurance companies.

For a company to be considered digital, their business model needs to be digital in nature. i.e., their business processes are digital in nature. Data in general, is the reflection of the business process, which in turn is a reflection of the business model, which happens to be a reflection of the business strategy itself.

Fig: How Data Intersects with Your Business Model and Business Strategy

While companies that consider themselves to be ‘digital’ enjoy higher valuations, companies which don’t, struggle with their valuations.  By digital, we mean companies whose business processes are enabled digitally.

The classic example that I tend to share is the valuation of Paypal as compared to some banks.  The banks off late becoming less valuable in market capitalisation terms as compared with younger companies.

What is this disruption? Can data management help?

Companies that are able to successfully connect the dots between their business strategy, business model, business process and finally, their data landscape are the ones that are wining and will win in the digital age.  The rest are likely to disappear. They will not survive.

When data is managed with an intension to create real economic to the shareholders, the customers, the employees and other relevant partners in the business model, there is highest probability to create massive value in financial terms, as the data in these circumstances is likely to be ‘person’ centric in nature.  Here’s where emerging technologies related to big data analytics and cloud play a crucial part, in helping shape the business strategy execution.

On the other hand, when leaders do not recognise this, there is a tendency to miss-spend, delay or ignore timely investments and actions.  Which, as we know will end up in disastrous consequences.  Drop in revenues, in ability to develop the right value propositions, inability to efficiently manage business processes and operations, in ability to manage talent and the list goes on.

What matters most in any enterprise, is their ability to fit into the ‘digital world’ in a manner that is worthy of being able to serve the people involved in the business processes, adequately enough, and where possible, delightfully!

Ignore data at your own peril. Manage it to create value and you have a chance to win in the digital age. Nurture what I call, ‘the datapreneurs’ in your organisation.  They will know how to create value in the digital age.

 

 

Three Little Known Factors That Dilute Your Enterprise Data Strategy.

Today’s enterprise data is critical for the success of traditional companies, i.e., those enterprises whose business models are not digital.

The trail that business processes leave over time, is the very data which enterprises must manage for various growth and regulatory needs.  All this of course, calls for the right data strategy. However, many traditional organizations are likely to struggle, with their data strategy articulation and the execution.

Here are three reasons for this struggle:

1] LACK OF AWARENESS

About eighteen months ago, a Chief Data Officer (CDO) of a traditional bank, was wondering why a data strategy is required for him to perform his new role.  In fact, the executive was convinced that the focus only needs to be on data governance related strategies and nothing else. Yes, no analytics and no big data! Sounds, familiar?

There was a sense of reluctance to even consider anything thing beyond just data governance, that too, the only the elements considered ‘mandatory’ from a regulatory perspective.  Enabling growth did not stand a chance in the CDOs agenda.

This indeed is lack of awareness of the value that could be derived from a sound enterprise data strategy.

2] LACK OF CAPABILITY

In certain cases, there is adequate expertise in the enterprise as well as an acknowledged awareness that a data strategy is required.  However, the sheer pressure of the business environment renders the organization incapable of any meaningful action.  A sense of uncomfortable ‘status-quo’ persists, while waiting for external factors to trigger an initiative.  An example is a large organization waiting to prepare for an IPO or a capital raise. Traditional companies under this category, perhaps have industry leading expertise on matters related to data strategy but they lack the capability to develop and deliver the data strategy, which by the way happens to be time sensitive.

3] INCORRECT APPROACHES

Articulating and executing a relevant data strategies is great, but may well be catastrophic if the wrong approach is adopted. Without the correct strategy, data is only a ‘potential asset’.  When, mishandled it erodes massive value in the form of opportunity costs.  This would typically run into billions of dollars and this includes the potential hundreds of millions of dollars in misspending.

If you happen to carry the unfortunate fate of a CEO, CIO or even a CDO or an organisation, that neither has an awareness, capability nor the ability to execute the right data strategy, there is still hope as in any ‘turn-around’ situation.

Since, 1955 more than four hundred of the Fortune 500 companies have disappeared.  At the same time, Johnson & Johnsons, Wells Fargo and General Electric, companies that were all founded in the 1800s still manage to be in the top list of most valuable companies in 2016.  The only thing that is common between them was that they had a data strategy that helped them transition into the digital age.

While traditional companies that ignore their data strategy are doomed, there always are those super stars that fight their way up to the top.

Let’s just hope that there are more super stars in the coming years.