Data is one of the most valuable assets for any business, specially in the Digital Transformation era we’re living in. Reputable experts claim that managing massive amounts of data is key to success. In other words, you must use your Business Data to deliver better solutions to your target audience. Studies show that by 2026, companies will generate 7PB of data, and around 90% of it will most likely be duplicated info. The truth is that data is just as beneficial as its quality and how you use it to take actions and making informed decisions. This way, a thorough Data Strategy plays a major role in achieving your business goals. Let’s dive deeper into what a Business Data Strategy is, its main components, and why it’s so important.
What is Business Data Strategy?
At its core, a Business Data Strategy is a roadmap that provides clear guidance on using data to achieve business goals. It’s a systematic plan outlining how a company should collect, store, analyze, and share information. The main goal is to ensure Data-Driven Decisions, processes, and solutions. A successful Data Strategy will help you protect your company's assets and comply with data privacy regulations. This type of strategy defines specific goals and actionable steps when implemented correctly. This way, leaders and decision-makers can leverage data resources.
Types of Business Data Strategy
Consistent Data Management Strategy initiatives focus on specific goals and approaches that allow us to establish two main categories. Let's overview them.
A. Defense Data Strategy
Defense Data aims to design actionable initiatives that minimize risk against security threats. Data breaches and cyber-attacks can cost your company thousands, up to millions of dollars. It aims for information integrity, targeting security and compliance simultaneously. One way to do that is by diversifying and optimizing data storage. They recommend having a primary data source for every broad category. That’s what they mean by having a single source of truth.
B. Offense Data Strategy
Data Offense uses data analytics strategies to understand User Behavior. This way, it enhances marketing efforts and sales. It also supports more flexible data management. That allows several parts of your business to interpret the same information differently. This way, it’s easier for companies to keep a single source of truth, avoiding unnecessary copies.
It’s worth noting that businesses need to find a proper balance between Defense and Offense. That’s how you create an effective Data Strategy that aligns with your goals. Companies shouldn't let the urge for short-term goals minimize the importance of security and compliance. They must break down data silos and create clear data governance.
Key Components of a Business Data Strategy
Some businesses may condense the following components into broad data categories. Yet, we’ve put together the ones that will best help you understand how to implement an effective Data Management Strategy for your business.
1. Representation: Every business must find a practical way to identify and represent its data. Common examples are structured and unstructured data. Names, proper value conventions, and formats are key to using and sharing data effectively.
2. Storege: I know this one might come across as obvious. Data storage goes beyond where the data goes when created. Having robust methods that cover storage requirements and ensure capacity isn’t enough. Where you store data must also support accessibility, sharing, and processing. You can consider relational or non-relational databases with Cloud Capabilities like MongoDB.
3. Provision: Here, we go further into how you share your business data and make it available. As mentioned, it’s now common for businesses to use the same data in multiple individual processes. Thus, your Data Strategy must ensure that your data is reusable and easy to share and access.
4. Integration: A Business Data Strategy requires software developers to write reusable functions. The goal here is to centralize data integration. Writing code that targets many individual data sources can be challenging. However, it pays off. Data integration is one of the most expensive IT tasks.
5. Governance: Data Governance is the last piece of the puzzle. It involves establishing rules and policies for processing, manipulating, and sharing data. Think of it as security details, policies, practices, standards, and metrics that ensure the effective use of information. It’s worth noting that Data Governance isn’t all about limiting access to data. Rather, it guarantees that everyone complies with the rules and policies to access the data.
Artificial Intelligence (AI) and Business Data Strategy
Data, often called the "new oil," is probably the most important factor of Artificial Intelligence (AI). Products like ChatGPT and Midjourney wouldn’t have come to life without the effective use of data. On the one hand, it’s important to consider that a solid data foundation is key to transitioning to Generative AI and Machine Learning (ML). Any business that creates AI or Machine Learning products needs a robust approach to data. Ultimately, Machine Learning Models and Generative AI tools will help us build our data strategy with products that already have our data.
Some companies remain unaware of the importance of an effective Data Strategy. Thus, it may not be clear who is responsible for its creation and execution. According to Harvard University, the CEO or the CIO is mostly responsible for a Data Strategy. Also, it mentions that the Chief Data Officer (CDO) is the one who leads it and ensures its development and execution. Business managers, data scientists, engineers, and analysts should also help.
Why is Business Data Strategy Important?
The digital world we live in and modern businesses are becoming increasingly data-driven. In many ways, data rules the business strategy world. That’s one big reason large tech companies like Amazon, Google, Microsoft, and Apple have a strategic advantage and are so powerful. It’s impossible to overstate the value of an effective Business Data Strategy that helps you avoid massive losses and leverage every aspect of your business. A clear and actionable Data Strategy allows you to build products with a seamless User Experience (UX) which grants you a competitive advantage.
Final Thoughts
A well-planned Data Strategy is particularly important for Software Development agencies. A world-class product demands many teams working in cross-functional environments, like Project Management, UI/UX Design, QA Testing, DevOps, and Product Development. A Data Strategy helps streamline team collaboration to improve productivity, achieve business objectives, and deliver products with top-notch UX.
