I often get asked the question “Where should I start my data initiative?” After 35 years as a data consultant and subsequently leading data programmes, business intelligence teams, and data functions as a Chief Data Officer, I have learnt that the only real starting point is to chase the value of data. That’s not to say I always did that. No, I have made my fair share of mistakes, but I’d like to think I’ve learnt from them. I’ve never intentionally started in the wrong place but sometimes, especially when you’re more junior, you get told to “go do”.
We are all aware of data warehousing initiatives that have failed to deliver any value, as Gartner will remind us the number of failures is more than 80%. However, it’s more complicated than that. Some organisations develop complex point-to-point data feeds that become impossible to maintain, and manage data science models that are developed but never productionised or maintained. So, when you come to deliver a key business project which requires certain data feeds you find that they are not any of the ones that have been developed, which in turn demonstrates a lack of joined up data strategy. These initiatives have at least one thing in common, namely that they are not driven by business value and have no joined-up data strategy. Had they been there would have been a great sense of business engagement and desire to deliver.
My advice is that all data driven projects should start by understanding where you get value. Experience says that pursuing an approach starting with data warehousing, dashboards, data science or building reports will lead you down a rabbit hole. The only place you should start is by chasing the value. That’s not to say you won’t end up building a data warehouse or data science models, but merely that’s not the starting point.
In my most recent roles, over the past 10 years, I have been lucky enough to take the lead and do things in what I thought was the right way or to “put my money where my mouth was”. This involved the largest business case in Europe to generate £2bn p.a. incremental revenue from data, a business case to invest £64m and implement all the data capabilities for the UKs Financial regular which led to the first prosecution for insider dealing with the data standing up to scrutiny in court, a business case to underpin the increase in margin of a FTSE 250 company by 64%.
This experience tells me that no matter what you do if it is about chasing business value and that if you approach it strategically you have a far greater chance of success. %. I feel that through these examples, all of which I successfully delivered, I have had the chance to prove my case.
So, my answer to the question is you should start your data initiative by:
A) Making the business case to exploit the value of data;
B) understanding where the value of data is in your organisation;
C) understanding how to exploit that value.
In this blog, I’m only going to focus on the first part: Making the business case to exploit the value of data. It is my opinion that if the right business case is done across the whole organisation then it has a greater chance of success. This means your business case should be based on how you are going to support key business initiatives through use of data to increase revenue, reduce costs, improve customer experience, and reduce business and regulatory risk.
If your organisation is currently going through a transformation, then data should be one of the key work streams, which in turn, should enable you to identify the value of the initiatives underpinned by data. Typically, this is not going to be less than 15-20 percent, but could be as much as 50% of the proposed value generated by transformation. In a typical FTSE 250 Business with revenues of 500 million you would expect to increase revenues by 100 million and therefore a Data investment of circa 5-10 million, or 5%-10% would be appropriate. The ROI at this point is easy to justify and gives the opportunity to bring together all aspects of a joined-up data strategy.
It’s a key learning from my experience that there is far more chance delivering value from data when you develop a business for the Board or Executive management because you get greater visibility, sponsorship and buy-in from them. This then cascades down through the organisation. Such an initiative led by a suitably experienced Chief Data Officer (CDO) will bring together all aspects of data ingestion, data storage, data governance, business intelligence, data quality, data science, artificial intelligence, Single customer view, Data community into a cohesive data strategy. When all these components are fully aligned, any organisation would be in a great position to exploit the full potential of its data.
Even with a business case at company level it is still recommended to start small, deliver some success and then accelerate activities on the back of wins. Most boards would be happier with this approach and so, if they are honest, would most CDO’s. Conversely, if an organisation has several business cases for data across different locations or business units they may end up taking different approaches, using different technologies and creating a lot of technical debt that it is hard to fix later.
So, in this blog I’ve tried to make the argument that you should start your data initiatives by chasing the value, that the business case for data needs to be done at the right level, and when that happens you will inevitably get better engagement, more investment and a far greater chance of success.
In the next blog, I’ll start looking at “Understanding where the value is in your organisation.”
If you need help understanding how you can get the most value out of your data then please get in touch by email or give us a call. We’d be happy to help.