• Peri Avari

The Real Asset: Data

There was a time when businesses, big and small, relied solely on gut instinct and in-person customer feedback, to make most of their core decisions for the organization. In today’s data-driven corporate culture, things have changed.

Data is a privilege for modern businesses. And along with the ease of having an abundance of information, on all aspects of the business at your fingertips, every enterprise has the responsibility to handle such sensitive data assets with care and caution.

Increase in Data Dependency

The convenience of having the numbers and research available in an easy-to-use format, prior to making any major business decision, is undeniable. But there are pros and cons to the high dependence on data, that we see in most modern organizations.

Pros of Using Data

  • Data is knowledge, and this crucial information on your market, customers, and your company’s stakeholders and employees, is your organization’s true asset in today’s competitive business world.

  • The use of real-time information and pre-crunched data sets, allows large companies to make informed decisions, and choose the best options, which creates higher productivity in an organization.

  • Scenario mapping, done using data, helps envision different paths to your desired business outcome. This leads to cost savings, and increased efficiency while avoiding expensive after-the-fact mistakes.

Cons of Data Dependency

Many of the following downsides are related to mismanagement of data, and companies taking sensitive consumer information too lightly; at times, purely due to ignorance of the rules.

  • Compliance with privacy laws is a large part of handling sensitive information related to customers. A lack of understanding of these, can turn data into a liability, and hurt a company’s reputation, as we have seen with some businesses in recent times. Having measures in place to limit fraud and prevent data theft, is essential to protecting data assets in all departments of the company.

  • Using data analytics to convert large swaths of irrelevant raw data into meaningful information, that can be used for decision making, is expensive and might be an unreachable goal for smaller businesses.

  • One of the potential downsides of relying solely on data to make decisions is, that the human gut instinct, which is an important decision-making tool for entrepreneurs, loses its value. Too much dependence on data can stunt creativity and limit opportunities, that an entrepreneur may have explored under different circumstances.

How Data is Driving Decisions in Organizations

There’s no denying the high impact of a data-driven culture in an organization; with the operative word being - culture. Creating an environment where leaders and the workforce know the value of their data, and have a strategy in place, to use it to drive meaningful decisions for the company, is really the first step. Here are some ways in which data helps companies make better decisions.

  1. Real-time data is priceless since it allows the team to make tweaks and changes, before they go too deep, by committing costly company resources, in any one direction.

  2. Analyzed usable data works in conjunction with industry research, previous experiences, and beta testing to create a collaborative decision-making approach in most companies.

  3. A data-driven culture pairs well with a growth mindset of testing, failing, iterating, and coming back with a new solution. Data is not always fail-proof, and it is meant as a guide to help in making the next best decision.

  4. In large organizations, where each department can go in different directions while thinking through a decision, it’s important to define company-wide core priorities and create ownership for the data.

  5. Single Source of Truth (SSOT), which is the practice of bringing all data within the company in one place for everyone to access, and Multiple Versions of Truth (MVOT) which is its business-specific transformation, are becoming a vital data management strategy.

  6. Companies know the value of providing employees with the tools and training required, to run compliant data management systems and automation, to help them make more data-driven decisions.

  7. Artificial Intelligence (AI) is used to create useful industry-specific statistical databases, that can be put to use by everyone within that industry.

The Importance of Data Security

Data security is a necessity, and not really a choice, in today’s fast-paced business environment. Any business in every industry is called upon, to take onus for the data that runs through their hands, and with good reason. Cloud-based solutions for data security, like Amazon Web Services (AWS), are a requirement for growing organizations that want to protect their data the right way.

Additionally, data security within the company’s organization structure involves designating a Chief Data Officer (CDO), to manage data, ensure compliance, and set up Single Source of Truth (SSOT) for the company, while also creating employee tiers to access relevant levels of data, in order to protect it. Setting up audits and real-time alerts, assessing risks, and purging irrelevant data are all necessary data security features within an enterprise.

When used with integrity, data can be an asset, a tool for businesses to make better decisions, that serve all the stakeholders, including customers, employees, and shareholders. Protecting one’s data fiercely is not just a legal requirement for a business, but a moral obligation.

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