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Why your data culture matters

Data is a vitally important asset for retail businesses and we’re seeing retailers investment in data capabilities is growing significantly. Allied Market Research reports that in retail alone, the market size of global big data analytics is set to reach $17.85 billion by 2027, from $4.43 billion in 2019.

However, investing in data solutions and analytics is not enough, without an embedded data culture a business’s ability to govern its data and use data effectively is impacted.

In this article, we will explore what good data culture looks like, and why it is essential as part of an overall data strategy.

Why culture is key

Cognizant states: “No matter how smartly crafted; a data strategy is incomplete without a data-oriented culture to support it. Data culture and data success are intertwined and interdependent. Organizations can’t have one without the other.” Data strategy is about creating goals, objectives, processes and architectures which define how the organisation is going to manage and use data. A data culture is about creating the environment that supports this data strategy, where employees understand the importance of data, their role and expectations, and there is a clear understanding that the organisation bases tactical and strategic decision-making based on data.

“By creating a data culture in which all employees can, and should, participate, organisations can begin to demystify data and build a more inclusive foundation that resonates with employees at all levels”, Cognizant says.

With the right culture in place, employees are empowered and encouraged to play an active role, moreover they understand how this impacts the overall data strategy, and subsequent success of the business. Roles and responsibilities in turn reflect the culture and values of the company, resulting in objectives that align with the data goals of the business.

In addition, when employees start to see results which are driven by the data strategy, it builds confidence and conviction. How a business communicates success is also part of the culture and an important asset to maintain employee buy-in.

Ted Colbert, CIO, Boeing says, “When people begin to believe in the data, it’s a game changer: They begin to change their behaviours, based on a new understanding of all the richness trapped beneath the surface of systems and processes”.

The importance of governance

There are five core components of a data strategy that work together as building blocks to comprehensively support data management across an organisation: identify, store, provision, process and governance. Data governance is usually executed through a data governance framework.

A data governance framework is a set of data rules, organisational role delegations, and processes aimed at ensuring everyone in an organisation is on the same page. In the simplest terms, data governance establishes policies and procedures around data. This allows data management practices to enact those policies and procedures, compiling and using the data for decision-making.

Without an adequate data governance framework data integrity is lost and any data strategy is doomed to fail. Equally, if the framework is not implemented correctly, or adherence to processes and policies is poor, then this will deliver the same result. This is why the establishing of a data culture is vital. With this culture embedded in the organisation, employees are clearly educated on the importance of data to the business, and their role in ensuring its accuracy and proper care and management. The culture fosters the right behaviours, which results in strong data governance.

How culture impacts data use

Many companies who adopt a data strategy end up collecting and processing a lot of data, but not trusting it to make informed decisions. This leaves them a long way from becoming genuine data-centric businesses. This can happen for several reasons.

Primary of these reasons is the end users who consider data to be someone else’s domain. Without clear guidance and knowledge that the data within the business is the responsibility of every employee from the bottom up, this behaviour never changes. A data-driven culture ensures that everyone knows they are involved and that they should be using data to drive their decisions and actions, not just acting on instinct.

Often where a data culture is not present, employees don’t understand that data is a business asset and all the associated value is missing. A data culture clearly defines how a business will use data and insights to solve problems facing the organisation, ultimately realising its value. Presented in the right way a business can demonstrate where data and insight has resolved problems, reduced costs, improved profits. This drives home the importance of the culture, so it becomes second nature to everyone to think in terms of using data when faced with a challenge.

Conclusion

A data-driven strategy, or the aspiration to become a data-centric business is a key building block to maximising a businesses potential. When formulating strategies, organisations are now realising that a data strategy is incomplete without a data-driven culture. As BARC reports in their 2020 BI Trend Monitor, data-driven culture was identified by survey respondents as the third most important trend in Business Intelligence, rising from fifth place in the previous year.

As this article demonstrates, by trying to implement a data strategy without a data culture in place, the foundation for the strategy is built on sand. That is not to say a business will fail, but it certainly will not achieve the best outcomes the strategy was conceived to deliver.

Businesses must be mindful, however, establishing a data culture is not easy. It requires the encouragement of critical thinking, the advancement of data interpretation skills, and the fostering of collaborative decision making. This transformation needs to be sponsored and directed by senior management, and then the business will truly facilitate change and alter the mindset of the organisation.

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