Creating a Business-Relevant Data Strategy

Three keys to building your data strategy.

By Tracy Austin, Independent Consultant

[Editor's note: Tracy Austin is presenting the closing keynote address -- Driving Business Relevance from Data Strategy -- at the TDWI World Conference in Las Vegas.]

Enterprise data strategy is a key part of both IT strategies and business strategies. Too often we see the enterprise data strategy focus on “capture, store, and manage,” becoming more of an IT-based strategy. The information “use” component of a data strategy in achieving business goals is often neglected. The result is that business leaders question the relevance, need, or value of a data strategy.

Why does a data strategy tend to be more IT-focused in many companies?

A strategy is basically the plan for how an organization will achieve its mission or specific goals. Often, the IT department champions, or is assigned ownership of the data strategy. In many of these cases, then, the data strategy is considered primarily in terms of the IT organization and those goals, not the business nor the business goals.

Many elements of a data strategy are IT-centric. This also tends to drive the data strategy to become more about technology. The resulting “enterprise” data strategy, and how it is communicated, tend to focus on the IT issues (such as storage, integration, and security) and not the business aspects of using data to achieve business goals.

Both of these issues -- IT solely driving the data strategy and focusing on the IT-centric elements -- are exacerbated if the organization does not involve business users in developing the data strategy. If that strategy is perceived to be “an IT thing,” it becomes more difficult to involve the business.

Ensuring Your Data Strategy is Relevant to Your Business Strategies

The key is to begin with the business in mind. Start any work or discussion on a data strategy with an understanding of the business vision, mission, and goals and determine the strategy for achieving those goals. Every element of the data strategy should support the business goals and the business strategy for achieving those goals.

Business involvement is key to ensuring the data strategy drives business goals. Too often we start the thinking about a data strategy too low in the pyramid. We may start in data management or storage and focus on selecting a system platform or acquiring data quality tools, then figure out how those choices support the business goals. The key is to begin with those business goals.

For example, Amazon.com’s mission statement reads: “We seek to be Earth’s most customer-centric company for three primary customer sets: consumer customers, seller customers and developer customers.” In their 2009 letter to shareholders, Jeffrey Bezos, founder and CEO compared results with some of the goals that support that mission, including adding 100 more brands of jeans, a 24 percent increase in seller customers, and 21 more product categories (including categories in France and China). He noted that for 2010, the bulk of their company goals will have a direct impact on the customer experience (source: www.amazon.com investor relations).

If your task was to create the data strategy for Amazon, given this mission and the goal examples, you would have clear considerations for elements of their data strategy. You’d be thinking about the data needed for three different types of customers and how those customers would use that data; tools to quickly capture, store, and management large amounts of data and the international implications to the data strategy. If you didn’t start with the mission and business goals, you may select a data management approach that didn’t consider the international aspects of the data, or a storage platform that couldn’t scale for adding large amounts of data quickly.

Target Communications

How, and at what level of detail, the data strategy is communicated to an IT data architect vs. the CFO is vastly different. Too often, communication about the data strategy is “one-size (or version)” fits all. The CFO is going to struggle greatly sitting through a presentation on the data strategy designed for an IT data architect. The IT data architect will be delving for more detail if he or she sits through a CFO-level presentation on that strategy.

Unfortunately, we tend to err on the side of communicating about the data strategy in IT terms, and detail as if all audiences for the data strategy are data architects. The CFO only wants to know what time it is, not how to build the watch. Developing an audience-targeted communication plan to share the data strategy will engage your business users. A data strategy developed from the top down with the business goals as the first consideration makes it easier to target data strategy communications.

Beginning with the business strategy in mind and planning business-audience communications, ensures you will a)develop the right data strategy, b)demonstrate the business relevance of that data strategy, and b)spend less time selling, justifying, and enforcing that data strategy.

Tracy Austin is an independent consultant and former CIO focused on IT leadership. You can contact the author at tracy@austinkowal.com.