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Most business leaders understand the opportunities presented by scrutinising and analysing company data, the growth of internal data functions over the past couple of years is testament to this. As we move into a more challenging business climate, investment in data is more important than ever to truly understand how your business operates, how to drive performance and where you can cut costs. Arguably too many businesses are carrying high operating costs for data teams and associated technology, and it can be difficult to determine true ROI. Broadly data teams need both Engineering capability to surface, model and expose data from operational systems and skilled Analysts/Data Scientists to interpret and action data insights. These are all highly skilled roles, with the price tag to match! So, what is the optimum operating model for leveraging your data (data operating model), but keeping overheads sensible? Unsurprisingly there is no catch all answer, but we have explored some of the high-level considerations below.
Regardless of the industry vertical you operate in; your company data is one of your view few unique assets. Understanding, interpreting, and learning from what it shows you tells you how to deliver your product/services more efficiently, support more profitable relationships and acquire new customers.
Regardless of the approach you choose, keeping control and ownership over your data and democratising data to ensure to it is visible and actionable for non-technical business stakeholders is imperative.
This means not vesting all responsibility in either a few in house technical/data professionals or external partner, instead building a data strategy which is aligned to company strategy and can outlive changes in personnel.
As already highlighted, data and technology professionals come with a high price tag.
On the Engineering side, there are very few Developers who can work across a whole data stack, so hiring resource in house automatically commits you to high operating costs.
Some businesses have tried to mitigate this by hiring Contract resources, but this can be very expensive and unless any Contractors are aligned to the long-term data strategy, cause more headaches down the line.
There has been huge progress over the last couple of years in the technical platforms for managing and leveraging data. Too many companies are still operating on old technology which is expensive to maintain and does not provide useful insight.
Investing now in a modern data stack can deliver immediate benefits, but it’s imperative, especially in this business climate that investment is made based on a prioritised roadmap and business case benefits are realised and understood before more investment is released.
Your data might be unique, but your processes will not be.
As mentioned above, technology in this space is evolving very quickly, both in terms of data engineering and data analysis with lots of 3rd party vendors that can help you move much quicker and more cost effectively than would be possible internally – check out our Clekt Innovation Hub partners to see some examples of this.
Given the inherent cost implications, building bespoke solutions in this environment is rarely the quickest or most cost-effective way of delivering value, unless there is a tangible argument that your business is so unique that this adds to true enterprise value.
Your operating model for supporting data will evolve over time, as any strategy should!
This also means it is highly likely that the number of in-house hires will grow over time as successes in leveraging data become more apparent and the ROI for further investment is clear.
However, working with external partners can be a lower risk way to get you started on your journey, with a view to taking over more direct ownership in house over time as the business case becomes clearer.
Where businesses can use data to really differentiate and add to enterprise value is in the interpretation and use of the data to drive intelligent insight and action.
Hiring a few talented Data Analysts and Data Scientists can identify opportunities that are worth £ millions to the bottom line, but they can only truly be effective if they’ve got efficient access to good quality data in the first place. Without this, it is like a football club buying a star striker, but not investing in a team that enables them to be successful.
Regardless of the challenging short term business environment, understanding and using data is going to become ever more imperative for businesses.
We believe by making sensible investments now, businesses can build longer term foundations for success, alongside making a meaningful impact on the bottom line over the next 12 months.
The key is working towards a longer-term strategy and building an operating model that is relevant for your business and can evolve over time.
Get in touch to find out how Clekt can support you in defining a sensible data strategy for your business.