Aug 21 2019
Data Analytics

Why Every Small Business Needs a Data Strategy

Most SMBs don’t manage information with purpose and forethought, even though doing so would be a major competitive advantage.

Not very long ago, data was just a byproduct of business processes: It was created because the business did something, but it had no value of its own. So, businesses did almost nothing with their data.

Those days are gone, of course. The business and tech leaders I meet now understand that data isn’t just a product of the business; in many ways, it is the business. Aside from its people, an organization’s data is its most important asset.

Yet when I ask those leaders to tell me about their data strategies, the responses are all over the place. The truth is that most companies, especially smaller ones, don’t know what a data strategy really is. While they recognize the value of data, few have modernized their approaches to managing it. 

They’re not properly analyzing it and they’re not sharing it throughout the organization. So, instead of maximizing the value of their data, they’re spending all their time figuring out how to retain it. And that’s especially true among small to medium-sized businesses.

It’s time to fix that.

MORE FROM BIZTECH: Discover four ways data management translates to digital transformation success.

Data Strategies Should Involve More Than Storage

First, let’s define our terms. Simply put, a data strategy is a plan that’s designed to improve all the ways an organization acquires, stores, manages, shares and uses data.

That means that creating a data st­rategy requires all hands on deck. This is not a mere project of the IT department; it’s a ­mission that business and IT leaders must complete together.

When IT departments think about data, they typically focus on storage, security and disaster recovery. And while all of that is obviously crucial, a true data strategy must also account for how data is identified, accessed, shared and used.

How do you start? The most successful data strategy projects I’ve seen have answered the following questions.

What is the role of data in driving the business strategy? Only after identifying your organization’s strategic priorities and business goals can you even begin to identify the ways data can help you get there.

What data do you have? Once you understand data’s role in meeting your business objectives, you need to determine whether you currently have it. That requires establishing a metadata process to identify and represent the data content in your environment. Enterprise content management solutions can be invaluable here, even for relatively small to medium-sized companies. You may find that you do have the information you need but aren’t using it to achieve your goals. Or it may be that you have some data but not everything you need, which means you aren’t collecting what you need to know from your customers, business partners or suppliers.

How should you store and protect your data? Here is where the IT team has most likely done the most thinking. Yet organizations continue to grapple with questions over how much to move into the cloud (and which cloud or clouds) and what IT security solutions to deploy.

I advise you to reach out for expert advice on these questions. Regardless of what you decide, the point is that storage and security are really just one part of a larger data strategy.

How will different parts of your business access data? It’s imperative that data collected by and contained in one business application be made available for every part of the organization to access and use. If data is truly a corporate asset, then all data must be packaged and prepared for sharing.

How will your data be analyzed? Data doesn’t become an organizational asset until you actually use it to inform business decisions. Until then, let’s face it, it’s a burden — something to be stored and protected. A good business intelligence solution can help you ask the right questions and get the best answers.

Data is crucial to every business, regardless of size or sector. Yet most businesses still seem to treat their data as something to manage and secure rather than deploy to their advantage. Businesses of every kind need to change that, and there’s no better time to start than now.

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