Why should data strategy be aligned with business objectives?

I'll be blunt: business tactics fail. A great deal
According to several studies, between 67 and 97 percent of organisational plans fail to accomplish their business objectives. While the specific causes of these failures are numerous and varied (inadequate communication, lack of buy-in, lack of clarity, etc. ), they ultimately boil down to one issue: a mismatch between planning and implementation

While senior lеaders devote grеat time and effort to defining corporate objectives and supporting strategies, achieving those objectives requires the dedicated efforts of the whole organisation - day after day, week after week. The data strategy serves as a roadmap for people responsible for implementing the strategy on a more detailed level, empowering them to make the decisions and take the activities necessary to achieve the organization's objectives

What does data strategy entail?

You'll frequently hear data strategy addressed in conjunction with enterprise data strategy – a comprehensive plan outlining how a company acquires, uses, processes, and maintains data. For the sake of this post, I'd want to define data strategy as a plan outlining how data, people, tools, and processes will interact to support the achievement of certain business goals

A sound data strategy, built on the pillars of data, people, technologies, and processes, will address the following questions:

• What statistics are required to demonstrate progress toward this goal? Is the data freely available, or must we seek it out? Is the data clean, current, dependable, and compatible with our analytics tools – and if not, what do we need to do to prepare it for the challenge?

• Who will be involved in utilising data to accomplish this aim, and what role will each individual play? Who will view the analytics dashboard(s) associated with this goal, and what will their actions be as a result?

• Which technologies will be used to gather data-driven insights relevant to this objective? Are the currently available tools suitable for the job? Is it necessary to consolidate all users into a single analytics platform, or is it possible to accommodate users of disparate applications?

• Which processes must be in place to convert information into action that moves the organisation closer to achieving this business objective? Is it possible to improve existing processes for this goal, or will we need to create new ones?

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Another critical component of your data strategy's success in achieving your business objective — one that touches on all four of these pillars — is a well-thought-out change management plan. Implementing a data strategy needs change, and effective change requires more than two or three emails explaining the current state of affairs. Change management aides in ensuring that individuals understand why changes are occurring, how they benefit, and how they affect the data, tools, and processes that surround their everyday job. (For additional information on how to create a successful change management plan, see our article "Enact change management – and make it stay.")

At this point, I'd like to address a common blunder we encounter while dealing with corporations. The data sources should be driven by the company plan, not the other way around. When firms consider how to exploit data as a strategic asset, they frequently ask, "This is the data we have; what can we do with it?" This approach poses the danger of leading the firm into rabbit holes unrelated to the organization's goals. A more reasonable beginning point may be, "This is the objective we're pursuing; where can we locate the evidence to back it up?" This creates a virtuous cycle in which business objectives inform data strategy, which in turn informs business objectives, and so on
How does data strategy contribute to business objectives?

If business strategy establishes a path between your organization's current condition and a desired future state, data strategy establishes mile markers, sign posts, and a clear windshield through which to view them

Any investment in data strategy contributes to the realisation of your strategic objective. Without a well-thought-out strategy for utilising data to drive decisions and activities along the path to your objective, you risk moving in the wrong direction – or perhaps stalling entirely. Therefore, if you're attempting to calculate the return on investment (ROI) of the time and resources required to implement a data strategy, evaluate the predicted returns on your business strategy and consider that data strategy is a critical component of achieving those returns

Specifically, data strategy performs three critical functions in advancing company objectives - both current and future

Orienting your decisions and activities in support of your company objective

The ideal corporate plan is robust but malleable; it is adaptable to changing markets, resources, and situations. Data might provide insights that indicate the necessity for a business plan adjustment. To illustrate, one of our retail clients noted an increase in Amazon orders shortly after the COVID-19 outbreak began. They were able to immediately detect the shift and adjust their sales and revenue plans accordingly by tracking this data

Establishing a feedback mechanism for your business strategy

The ideal corporate plan is robust but malleable; it is adaptable to changing markets, resources, and situations. Data might provide insights that indicate the necessity for a business plan adjustment. To illustrate, one of our retail clients noted an increase in Amazon orders shortly after the COVID-19 outbreak began. They were able to immediately detect the shift and adjust their sales and revenue plans accordingly by tracking this data

Discovering new possibilities

Strategic data utilisation can uncover previously untapped markets, demand trends that may inspire the development of a new product or service, or movements in the competitive environment that may create new opportunities

A strategy for the purpose of driving the strategy

You've invested significant time, resources, and energy in developing your business plan; why should you rely on guesses or gut feelings regarding your progress? A well-thought-out data strategy provides structure and direction for your team's usage of data sources, ensuring that each action advances your business goal – while also exposing some new insights

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Data strategy establishes a direct link between the CEO who established the strategic objective and the employee tasked with carrying out the vision's "last mile" actions. When team members have access to clear, accurate, relevant, and actionable data that is presented in an easily consumable way, they are empowered to make daily decisions that move the organisation toward its present and future objectives. It gradually increases awareness and enhances the data culture of the organisation