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How to identify data value in your business

No matter how innovative your data project, it’s going to be a failure if you don’t identify data value in your organisation. That’s why you need to uncover the value of your data. By uncovering the value of data, you ensure it directly impacts your organisation’s bottom-line and that stakeholders recognise its importance. But identifying the value your data can add is easier said than done.

Apart from justifying your data strategy (and data function’s) existence, unlocking value also helps to support a self-funding data team. That should be the aim of every data function. If you can prove value, you can ask for some of those returns to be invested in future data projects. It becomes a virtuous circle – data projects deliver value that provides returns on investment which can then be used to fund further data projects.

 

Getting started

First, you need to consider your success measures. What does success look like in your organisation? An airline company, for example, might want to achieve better ticket revenue. This can be broken down into achieving better margins, attracting more customers, and selling more tickets more regularly. In breaking it down this way, you help to set the overall data use case and its value.

At the very top level, you need to consider your organisational goals over a three to five-year timeframe. By understanding what the organisation wishes to achieve, you can align your data projects to identify data value. If the work you do doesn’t line up with your organisational goals then it’s useless.

 

Setting goals

At an individual level, everyone in your organisation will have their own goals. Likewise, teams and departments will have set goals and then the wider organisation will have these as well. Your data projects need to provide tangible benefits that line up with all these goals. Every bit of work must align to the business goals, otherwise it won’t add value. If it can also support the team or the people working on those goals, then even better.

We recommend starting with a business goal such as “Increasing revenue from ticket sales” – from this, you can build your use case, which provides tangible benefits towards each goal. That’s the basic building blocks of value. So, what do you want to know about your organisation? What are the critical business questions that people in your organisation are constantly asking?

 

Use cases and value

Your use case and value are closely related. When starting out with a data project, it can be tempting to try the most cutting-edge projects. But these can be costly, time-consuming, and not provide quick results. In fact, it’s a far better tactic to prioritise quick-win projects that prove value to stakeholders in a short timeframe. Therefore, don’t start with your data. Look at your business questions first and then pick the ones that will benefit from the use of data. We recommend the following template for defining your use case:

 

We want to [answer this question] by [using data in this way] in order to achieve [goal].

 

Don’t forget to have measures in place that will tell you if your data project is on track to meet your goals. Picking the right metrics for each data project is a bit of a science – so I’ve gone into it in more detail in another blog.

 

Acting on insights

Acting on data insights is a key part of unlocking value. It’s important to understand that the execution of your data insights often lies outside the remit of your data team. They provide the insights, but someone else has to act on them…and sometimes that won’t happen.

Everyone needs to be driven towards acting on data. Building a strong data-first culture ties into this. If everyone believes in the data and its insights, then acting on it becomes a lot easier. Likewise, everyone should have a say in the business questions asked and use cases derived. That way, everyone is on the same page, aligned towards the same goal, and fully bought-in.

Failing to act on the insights will undermine the value of your data. Building a data culture and gaining buy-in is as important as defining your goals and use cases.

 

Value for ongoing success

Using data over the long term is critical to your organisation’s success. But the only way to get there is to gain buy-in across your organisation and to build a good data culture. A key part of this is proving the value of data in achieving different business, team and individual goals. Consider how data can add to your colleagues’ lives. Think about the business questions that data can help answer. That’s the best way to identify value in your use of data, and of course, to make sure people act on its insights.