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Technology / Data

To get the most out of data, understand its purpose

The first step in any organisation’s data strategy is understanding why they use it, writes Caroline Carruthers, CEO of data advisory Carruthers and Jackson.

We all know that to be a successful modern organisation, you need to use your data. But what many businesses fail to understand is that a data strategy isn’t a simple tick-box exercise; you can’t reach an “end point” when it comes to using data. So, what is the real purpose of data, and how can organisations go beyond the ordinary and really harness the potential of data-driven business transformation? 

data strategy purpose
A data strategy should be constantly adjusted to reflect changing reality. (Photo by Yurich/Shutterstock)

Understanding why an organisation uses data is just as important, if not more important, than knowing what it’s doing with it. It’s all very well having the latest data analytics tools or reading up on the theory of the most effective ways to interpret data, but many organisations fall into the trap of doing these things without a purpose. These organisations will typically have a data strategy that outlines how they’ll use data and maybe including a code of best practice. This simply isn’t enough. 

Far from being a separate element in a business, data strategy should be closely aligned with, if not embedded into, the overall business strategy. And, just like a good business strategy, an organisation’s approach to data has to be one of constant adjustment to reflect the reality of its position.  

A good data strategy (and when I say good, I mean a successful strategy that brings tangible benefits to your business operations) has to be alive. A strategy document isn’t an end point; it should be undergoing regular reviews so that it remains flexible and reflects the reality of the business and the world around it.

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How many organisations can say, hand on heart, that the way they use data, and the importance of data-driven digital operations, hasn’t changed dramatically in the aftermath of the pandemic and the shift to remote work? So many data strategies are written and then left to gather dust, but if a business hasn’t updated its strategy in the last year, especially given the pandemic, then I can confidently say that it’s not getting the best out of its data.  

If a business hasn’t updated its data strategy in the last year, then I can confidently say that it’s not getting the best out of its data.

The ability to reflect on, review and update a data strategy relies on how well an organisation is able to recognise the risks of actually using data in the first place. Anybody who knows me, knows I’m an optimist, and an organisation’s attention should of course primarily be focussed on where data can take it forward. That being said, data leaders need to be prepared to look over their shoulders, so to speak, and critically evaluate any potential data hazards that might come their way. That means regular reviews of data risks, which can be anything from the latest regulations on data storage and use to potential security concerns. Understanding and keeping up to date with these risks, and then revising data strategies, is critical to building the right framework for a successful and modern approach to data.

The purpose of data strategy

This consistent review of a data strategy is really just an extension of good data governance. Many see data governance as the need for a set of comprehensive rules that keep data within narrow and easily controllable confines. To me, those organisations with rigid data governance actually end up doing more harm to their data operations than good, with overbearing regulations that stifle creativity in the name of compliance. Instead, governance should be about marking the outer boundaries of data operations and giving data leaders as much space as possible to innovate and develop their processes.  

I often compare data governance to the role referees play in a rugby game: Yes, they are there to keep the players safe and to make sure that they abide by the rules. But there is also a duty for them to regulate the game in a way that allows for players to be creative and deliver an enjoyable spectacle for fans. Just like a referee, governance has to expose and protect from the dangerous, while keeping things as free-flowing as possible. It can’t just be about saying no  

In order to become a more ‘data mature’ organisation, the first step a business has to take is to understand the purpose of data. It has to be treated like an overall business plan, with constant revisions, updates and innovations to ensure that it reflects the reality of an organisations situation while continuing to push it to be and do better. Proper use of data isn’t just about following the rules and writing the right thing down on paper; it’s about being creative and recognising data’s greater purpose.

Caroline is CEO of data advisory Carruthers and Jackson and co-author of The Chief Data Officer's Playbook.