By Nicole Reineke, Distinguished Engineer, Dell Technologies
How did Billy Beane, a sports executive and former MLB player, make Oakland Athletics the first baseball team to win 20 consecutive games in 2002? How did he do that after being forced to slash his player budget? It wasn’t by gut feel. Just like a savvy stockbroker examines company fundamentals, Beane focused on the numbers. He analyzed player performance to find undervalued potential stars that everyone else had overlooked. He was what we call a data champion.
Like Beane’s ground-breaking team, some organizations are batting data-driven business out of the park; they’re leading by example, showing others what they can accomplish with a mature approach to data management.
The Data Paradox, a Forrester Consulting commissioned study, conducted on behalf of Dell Technologies, highlighted a small but powerful group of companies “Data Champions”. Today, they make up just 12 percent of the overall survey base. They’re the MVPs of the business world.
These are companies that find the perfect balance between investing in the technology to collect and process data, and fostering the internal culture that they need to manage it properly by breaking down organizational silos. Together, this enables them to create an environment of accountability for data quality.
Data champions treat data as an asset class in its own right, focusing on its value rather than counting its cost. They use it to transform their operations by putting it at the heart of their decision-making.
The Data Differentiator
Data champions can emerge in any sector. We often see early leaders among companies that marry technology seamlessly with their product and service offerings. For example, home workout equipment has been with us for decades, but a data champion might disrupt this sector with connected products that generate data. Such a company would seamlessly integrate this equipment with its back-end data infrastructure, gathering usage data with each new workout. It could use that to refine its existing services, maybe gamifying workouts to encourage competition in on-demand classes. Furthermore, it could also launch entirely new products and services ahead of the curve by using data to anticipate customer needs. How does 1:1 customer segmentation sound? Data champions use their data to personalize each customer’s experience. Imagine workouts timed and themed to suit the customer’s existing exercise habits.
Companies don’t have to be bleeding-edge IoT innovators to be data champions. Some of the biggest opportunities lie in entrenched industries, where companies who master their data can become more responsive than their peers. In finance, for example, a company that can collect and process data quickly can be ready with instant feedback for a customer who has applied for a loan, putting it ahead of a competitor that might make them wait days for a decision. Advantages like these are critical, both for companies and their customers. Get it wrong, and a bank could let a business slip through its fingers or lose money on a loan.
Creating a Culture of Accountability
Being able to trust your data is critical, yet many companies outside the data champions group can’t vouch for the data that they use. The Forrester study found only 7 percent of respondents are voluntarily participating in third-party audits today. This will become increasingly critical as regional and state data protection laws pass and calls for federal ones grow louder. It’s an even more acute problem for artificial intelligence (AI) users, following emphatic statements from the Federal Trade Commission and the European Union on AI transparency.
Data mastery gives a company confidence in the quality of the data it uses to train the AI algorithms that will underpin its digital transformation projects. It will be able to audit that data to understand where it came from, what was done to it on its journey, and whether it contains biases that could put it on the wrong side of the law. It can then see which other applications use that data to manage its risk, fixing the data set to meet compliance requirements and report back to regulators.
Companies can go further than ensuring trustworthy data: They can use it to optimize their operations, as well. Data fed back from algorithms will improve operational accuracy and boost business results.
Minimizing Risk in Volatile Times
Well-managed data can also help drive down risk. Data champions know how to ingest and process vast amounts of information from different areas of the business, spanning order processing through to logistics. This pinpoints emergent risks, such as fraud or safety issues. This is an aspiration for businesses across the board. Thirty percent of respondents to the Forrester survey are using machine learning to automate anomaly detection today. Two-thirds plan to do so in one to three years.
One area where this data mastery will be especially useful is in IT, where it can help companies to identify nascent performance issues and watch for potential signs of an attack that human operators might miss, such as uncommon network patterns or endpoint behavior. Businesses can even use this capability to predict emerging needs across the organization. If trends in sales data indicate a coming rise in support issues as customers get to grips with a product, a company could staff the contact center with more people to field customer calls.
Become a Data Champion With Data-as-Service
While the proportion of data champions is still relatively low at 12 percent, we expect more companies to transition into this category as they realize the need to master their data management at both a technical and a cultural level. This is where an as-a-Service model can help. By offloading critical data storage and processing tasks to a trusted third-party provider, organizations can create a powerful platform for transformation. It brings three game-changing benefits:
- Data-as-Service equips companies to adapt more quickly to changing business conditions.
- Offloading the heavy lifting to an expert partner also makes companies more scalable.
- Finally, an as-a-Service data management model helps customers provision applications more quickly.
Taking control of one’s data will unlock new capabilities that will make a difference to the future of the business. What was once mere bits and bytes are now the components for a competitive advantage. Armed with this new approach to data management, data champions can prepare themselves for a home run.