The Value of Data in an Organisation

As a data leader, I’m frequently revisiting these themes. Weather it’s reviewing a task, part of regular OKR planning, or building a bigger data strategy. Why are we doing this, and what’s the value to the organisation? It’s easy to get buried in the tasks, and forget the outcomes we want to achieve (and why).

Where & What is the Value?

I always start with the philosophy that there are only three ways in which an organisation uses data (yes, those can be split but everything fits in one bucket or another).

1. Understand Activity & Performance
2. Improve Financials
3. Legal, Compliance & Governance

In organisations where there has been a strategy, these are considered in unison. Most organisations historically have started with the first, quickly realised the second exists (and that they want to exploit it), and then the third has come as a surprise (sometimes with costly rework required).

Understand Activity & Performance: What’s going on?

Historically the first reason businesses want to start a data project/team, is because their existing infrastructure can’t give them a holistic picture of what’s actually going on. The types of output and questions include:

• Regular Reporting: What happened last month, and what’s my commission? How many customers do we have anyway?
• Third Party Integrations: The CRM system needs to know product usage data?
• Strategic Decision-Making: We can only make informed decisions once we know what’s happening.

Improve Financials: What can we improve?

Once we know what’s going on, we can work out how to use the insights and data we have to make or save money.

• Identify Opportunities: Where can we see gaps we can exploit?
• Reduce Costs: Where can we see inefficient use of resources?
• Monetise Assets: Can the data be monetised itself (in whole, part or as part of a new service)?

Legal, Compliance & Governance: How do we keep out of jail while doing all this?

Often the least popular to discuss, as these don’t make money and sometimes feature in conversations about “risk appetite”. Getting these right up-front can save a lot of time and resource in the future in the form of remediation. They can be grouped as:

• Data Specific: Are we compliant from our data handling (e.g. UK Data Protection Act, GDPR, PCI)?
• Organisation Wide: Are we meeting our obligations, and can we demonstrate this for an audit?
• Data Quality: Is the data actually accurate, and fit for the decisions we are using it to make?

What is the Value of doing X?

From an individual task to large projects, leadership (and engineers) should be able to understand the value of what’s being achieved by it.

1. By identifying which of the three areas the work fits under, we get the “why?” for the work.
2. From understanding the impact to the area, we get the “What?” for the work (it’s objective).
3. With the “why” and “what”, we can plan the “How?” for the work.

Value = ( Why + What ) – How

The true value of any work has to be balanced with the cost. There can be many arguments for the “why” and the “what”, but there has to be a reasonable “how”. If there isn’t a reasonable “how”, can the organisation pivot on one of the three points to find the equilibrium?

Is the work worth doing now, later, or ever? Comparing the value between tasks is part of all planning conversations. If something doesn’t have high enough value we must commit to not doing it (at least for now): Just as important as the work we are committing to…