Developing a Data Strategy
Establishment and Operation of Data Management Office (DMO)
Developing a Data Strategy
Despite the fact that almost all institutions are now aware of the crucial importance of data in driving growth and innovation, many still face significant challenges that prevent them from fully leveraging the potential of their data. This is not surprising, as the common denominator among all these entities struggling to manage their data is that they have not invested effort or attention in developing their own data strategy.
What is a data strategy?
A data management strategy is a long-term plan that encompasses tools, processes, individuals, policies, and rules determining how an organization manages, analyzes, and leverages its data assets. It outlines the organization’s vision for data management, ensuring that business data is treated as a valuable asset. The strategy sets goals and purposes for effective use across departments and projects, guaranteeing compatibility with privacy regulations.
Developing and enhancing a data strategy is highly important as it enables continuous innovation and value creation in line with current and future market trends, supporting the long-term goals of the business. Experts assert that many companies today fail due to insufficient data strategies across all areas to support accurate decision-making.
What is the importance of a data strategy?
There are several reasons why organizations need to develop data strategies and invest their resources in doing so. From a business perspective, data strategies can help:
- Identify ways for the company to achieve its goals using its data.
- Identify changes that the organization needs to make to maximize the value of its data.
- Determine the financial impacts and benefits of data activities, providing actionable insights to increase business profits and generate income from data.
- Develop effective solutions for data privacy, security, and data quality issues that undermine your ability to analyze data.
In addition to the above, data strategies contribute to unleashing the potential of data by breaking down data silos and addressing issues of data duplication across various business units. Business units may independently store and manage data without a clear strategy, potentially leading to inefficiencies. However, when these efforts are within the framework of a data strategy, each department or business unit follows clear principles and guidelines.
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Objectives of Data Management Strategy
To formulate an effective data management strategy, you should work towards several objectives:
Innovation:
Any successful work creates new value or efficiency through innovation. Innovation should be a central goal when crafting and implementing a data strategy. Meeting User Needs:
Meet users' needs
Your data management strategy should support and empower users, where users refer to anyone within your organization contributing to the work. Addressing Risks and Compliance:
Risk handling and compliance
An effective data strategy should address data security risks and compliance requirements in your business.
Key Components of Data Strategy
Despite the significant differences among data strategies, all successful strategies encompass four main components, each playing a role in shaping the implementation of the data strategy. These components are as follows:
Your data management strategy should enhance and complement your overall business strategy, indicating the processes used to operate and improve your business. To achieve this goal, you need to set clear and measurable objectives for your data strategy that align with your larger business strategy. For example, your data strategy might include a goal of keeping data storage costs below a certain threshold.
To achieve this objective, the strategy might identify storage tools or services that meet cost requirements, along with best practices to help users optimize storage costs. You should establish metrics, such as the average cost per gigabyte of storage, to track your success in achieving this goal.
Set both long-term and short-term goals. While you might set a short-term goal, such as conducting data quality reviews once a month, for instance, a long-term goal could be continuous data quality improvement. This means consistently identifying and addressing data quality issues rather than relying on periodic inspections.
A data strategy should encompass organizational roles by documenting the role of each individual or work unit concerning data, facilitating collaboration, and avoiding duplication. Not everyone in the organization uses data in the same way, and their roles in data collection, management, and analysis will differ.
Three main types of users typically implement a data strategy:
- Data Engineers, who oversee data pipelines and are responsible for building an efficient and reliable data structure.
- Data Scientists, who work with data.
- Data Analysts specialized in analyzing and interpreting data.
Business Managers, who assist in managing data operations and reviewing data reports. - When coordinating roles, consider that everyone in the organization uses data in some form, even if working with data is not a fundamental part of their job responsibilities. For example, an account manager recording customer information plays a role in data collection, and a sales manager might need data analytics to help plan the next marketing campaign. The data strategy should document the roles of each team member or group.
Furthermore, when an organization retains multiple datasets, the data strategy should define the data "owner," specifying who is responsible for storing, protecting, and analyzing different datasets.
The data structure consists of tools and processes that enable working with and analyzing data, encompassing various types of devices, software in workplaces, cloud technologies, and more.
The first step in defining your data structure is identifying datasets existing between business units throughout the organization. Data catalogs are useful tools for this purpose. If you don't have a data catalog, review data sources with your team and users working with the data.
To analyze your data, you need to store it in a single repository, such as a data warehouse or a data lake. You may also want to integrate or transform it to place it in a format that allows for better analysis.
Encourage data management to consider all team members to think of data as a business asset, rather than a secondary outcome of business operations. Work on motivating every individual in your organization to adhere to policies when working with data.
The foundation of effective data management is data governance, which defines the processes and responsibilities ensuring the quality and security of data used across the organization. For example, data governance may specify that the manager should archive data in an offline location if it's no longer in daily use. Or, data governance policy might require data encryption to enhance security.
You should update your data governance policies with the changing needs of your business. While you may store all your data in physical centers today, if you move your data to the cloud, you may need to update your data governance rules to accommodate cloud-based data management. For instance, data stored in the cloud might require stricter encryption rules.
How to Create a Data Strategy?
The approaches used to build an effective data management strategy vary for each organization, given the inherent differences in size, resources, goals, and intended activities. Here is a four-step approach for crafting a sustainable data strategy:
First Step
Define the objectives and goals of the initiative.
Second Step
Identify reliable data sources.
Third Step
Define data use cases and prioritize them.
Fourth Step
Develop a data roadmap.
How can we assist you at Renad Al-Majd in formulating a data management strategy for your organization?
No organization can achieve desired results without adopting a systematic approach to collect, store, analyze, and manage its data. This requires a data strategy that serves the entire organization. We will help you develop your data strategy by:
- Applying frameworks and methodologies to harness data for value creation in your organization.
- Building a data-focused roadmap to gain a competitive advantage in your field.
- Understanding and managing the data lifecycle in your organization.
- Implementing modern data management systems.
- Assisting entities in complying with relevant international standards and specifications.
- Developing governance policies and guidelines.
- Providing data management and governance solutions.
Helping build data-related organizational units, such as a data management office.
Need assistance/consultation?
Contact us now; our entire team (+110 consultants and experts) will work together to answer all your inquiries.