Data Strategy Framework: a 7-Step Guide

It is estimated that industries produce 2.5 quintillions of data each day.

Data is one of the biggest assets for your company, but data alone cannot provide value. To unlock its true value, you need a strategy in place. But…what is a data strategy?

A data strategy is the process by which you manage, analyse and act on upon business data. Whether you are looking for efficiency improvements or gaining a competitive edge, having a data strategy is becoming more important for businesses in these digital times.

Why Is Data Strategy Important?

  • Data strategy increases business efficiency

Ineffective business processes can be time-consuming and may hinder the growth of your company. A proper strategy enables you to connect data with business processes that require it to manage them more efficiently. More and more businesses are understanding this as 94% of enterprises say data and analytics are important for the growth of their business.

  • Increasing volume of data

The volume of business data available for companies is increasing rapidly. As the amount of data increases, the need for a strategy for effective data management is inevitable. Data strategy not only speeds up the entire management process but also provides efficient data-centric results for businesses.

  • Understanding customers and trends improve decision-making

Identifying your customer needs is the key to business development. Thanks to the huge availability of your customer data, you can now predict what your customer wants in the future using data strategy. Your business data can also be used to monitor the performance and activities of your business, which in turn helps in better decision-making for your company.

  • Data strategy ensures optimized use of resources

Without a data strategy in place, the internal operations of your company will be less organised, leading to a wastage of time and resources. Building a company-wide data management strategy will ensure that all the departments of your business follow similar guidelines, making the entire process systematic and efficient.

Data Strategy Goals

Data strategy is brought into action to serve several purposes in a business. But for such strategies to work properly, you should focus on achieving certain primary goals:

  • Providing what your organization needs: Despite the importance of data, only 14% of organizations have it widely accessible to their employees. Therefore it is important to have a data strategy that must be compatible with and empower your employees.
  • Keeping risks and regulations in mind: Your data strategy should be built while keeping certain rules and regulations in mind. This ensures your data management process is much more secure and smooth.
  • Innovation and growth: When you use data to optimize business performance and make smarter decisions, the bottom line should remain to achieve growth through innovation.

How To Build A Data Strategy

Now that you have understood data strategy and its benefits, let’s discuss how you can create one for your business. The entire data strategy development process is divided into seven steps, each derived based on your target and goals.

The seven step framework to building your data strategy are as follows:

1. Earn buy-in

Your first step to developing a data strategy is to create a proposal that earns acceptance from stakeholders. Your proposal should depict how the strategy benefits your business, and how competitors are using data to gain an advantage. Your proposal should also contain an economic report with statistics to back up your words.

You will need members of all levels to accept your proposal to ensure smooth participation from your employees and the availability of resources at all times while implementing your data strategy.

2. Build a team for data management

Once you earn acceptance for your proposal, it’s time to build a team that will be responsible for the data strategy execution and entire management process. Your team should ideally consist of experienced employees and departmental heads to lead the team. Make sure to include people from different departments who can handle various aspects of data-related issues.

Leverage the skills of your existing company employees to handle different roles in the team and only hire if there aren’t enough in-house experts. It is also important to have a dedicated team member for data governance.

3. What types of data will you collect, and where from?

Determine the type of data you want to collect. Your business goals will determine this for you. For example, if you are an online seller who wants to recommend items your customers can be interested in buying, you need to obtain data on their related buying activities. Or if you want to get new customers through targeted online ads, collecting demographic data on website visitors and customers will be important.

Once you have figured out the data you need, it’s important to know where it will come from. As for the above example, you can find your customer buying activity by observing what they are searching for on your site and their recent related purchases.

4. Set measurable goals

For the successful implementation of a data strategy, you need to set achievable goals. It’s important to note down your vision clearly and how the data strategy can help you and your business achieve the vision in the next few years.

You should have both short-term and long-term goals which align with your company values. Short-term goals are more specific, keeping track of your progress so that you can make necessary changes whenever applicable.

5. Create a roadmap for executing your data strategy

Once you have defined your goals, the next step is to create a roadmap for the data strategy execution. Your roadmap should primarily outline the plan for implementing your strategy. This contains the goals set, the person responsible for each goal, the processes and costs involved to achieve those goals, and the desired outcome.

You should make sure that your plans remain flexible so that you can make updates whenever needed during the execution process.

7. Sort out storage and organization of data

Storage and organization are important aspects of data management and should be included in your data strategy. Data storage plans can vary from company to company and should be developed keeping your goals and requirements in mind.

You should consider aspects like storage capacity, data usage, and sharing before planning your storage and organization of data. In general, you should store your data in an easily accessible format making it actionable for anyone needing it.

8. Gain final approval…and start implementing!

The final step is to create a business plan out of the above steps and present it to the company leaders or stakeholders for approval. This business plan should include the company’s data goals and the strategies you’ll use to achieve those goals. It should also mention the resources, investments, and processes needed to implement the data strategy.

Once approved, you can start implementing your data strategy. As mentioned earlier, your management process should be flexible so you can easily make changes whenever needed during the execution process.

Are you ready to speak to a fractional CDO?

We are a group of seasoned board-level experts with a track record of successfully directing strategies for hundreds of businesses across the UK and the US.

Our role is to make your organisation more efficient, reduce costs, increase profit, and ultimately help your business achieve its long-term goals, on a completely flexible basis, with no fixed-term contracts.

Get in touch and let us know your business challenges and goals so we can decide how we can help your business get the most out of its data.

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