A few months ago, research firm BCG published a new study on data maturity — with a mixed bag of results.
The good news? The growth rate of companies’ data maturity almost doubled between 2018 and 2021. However, only 13% of companies have reached the highest level of data maturity.
On the one hand, it’s encouraging to see companies advancing their data maturity despite the chaos of Covid-19. But for the other 87%? Their lack of data maturity continues to pose a significant risk.
Elias Baltassis, BCG partner/director/co-author, explains:
“Companies that leverage data to its full potential can generate unique insights that lead to smarter decisions, smoother processes, and a significant competitive advantage over their peers. But to do that, they must seize the growth momentum in what is a very fast-moving environment.”
At Amplifi, we help companies navigate their data journeys every day. And in our experience, we’ve observed a common denominator in achieving data maturity: the importance of utilizing the data value chain (DVC).
In this blog series, we’re diving into the DVC and sharing how you can flip your thinking to accelerate into the highest stages of data maturity.
Linking Data Maturity to Data Value
First, let’s define the DVC: A data value chain is how you transform raw data into tangible business value.
Ultimately, it’s a way to flip your thinking. Businesses must stop viewing data merely as a tool, and start looking at the value it can bring.
Just how valuable is your data? Put simply, it’s everything. Data is currency for your business, and it has value and cost, all tied to your level of data maturity.
For a quick comparison, consider how you’ve managed your own money, depending on your level of maturity.
- As a youngster, you likely viewed money as a tool for buying things right now. There was no long-term vision or looking back to evaluate past purchases. Parents and those around you influenced your choices.
- Then, you grew a bit wiser. In a more mature state, you started to view money as a means to accomplish specific saving or spending goals. But your vision was still limited, focused on the day-to-day or month-to-month.
- Finally, you get to the strategic stage, where money is an asset for accomplishing long-term outcomes. You turn to financial advisors to make tactical decisions, freeing you to focus on cultivating your vision and advancing your specific goals.
Like money, the value you derive from data increases with strategic decision-making and effective use. It also diminishes with poor planning and limited vision.
So, Just How Data Mature Are You?
We typically categorize data management maturity in three main categories: the Early Stage, the Mature Stage, and the Strategic Stage. Let’s break them down:
- The Early Stage: Most of the data you capture is unstructured, siloed, and ungoverned. A lot of time is spent gathering and correcting data, but even then, you can’t entirely trust the analytics and insights you’ve obtained from it. Reporting is manual and extremely painful with a lot of time spent on data janitorial work. Data is viewed only as a necessary piece of your organizational strategy.
- The Mature Stage: Now, you have a basic data management strategy where critical data elements are centralized. You may even have Master Data Management (MDM), Product Information Management (PIM), Metadata Management, Integration Layers, Content Management Systems (CMS), and/or Data Quality technologies in place. Your organization understands the importance of data, but has not necessarily utilized it as a strategic advantage for operations and sales. You know your data can do more, but there’s not organizational buy-in or agreement on the time and resource investments required to take the next step.
- The Strategic Stage: Finally, data is a strategic asset that most people in your organization, especially your leaders, understand and use to achieve game-changing results. You have well-defined processes, data governance policies, and data stewards in place across the organization and have gained significant efficiencies through automation. You may have Machine Learning (ML) and Artificial Intelligence (AI) technologies in place to provide even more proactive insights for the direction of your company. The entire organization not only understands the criticality of your data, but contributes to expanding your data’s value.
Along the way, from early to strategic stages, companies will land on five different checkpoints — starting at “data lethargic” and reaching “data excellent”. We won’t go into each checkpoint here, but you can check out our Data Value Chain Infographic for a visual overview.
Why Do Companies Lag Behind?
In looking at these categories, where do you think your business lands? And if you’re already data mature, are you taking steps to level up?
Organizations face several challenges when working toward the strategic stage — including a general lack of analytical talent or data stored in silos with limited integration.
But perhaps the biggest challenge that prevents companies from overcoming these more tangible problems is the knowledge gap pervasive in organizations today. Top executives often don’t speak data. They struggle to visualize their business problems as data problems and don’t fully buy into the data culture needed to advance into the strategic stage of data maturity.
In fact, 85% of organizations see data as one of the most valuable assets, but a lack of understanding hampers their success.
It’s Time to Think Differently with the Data Value Chain
To overcome mindset and knowledge gaps, businesses must think beyond data as a tool and focus instead on outcomes. You can do this by creating DVCs throughout your information life cycle.
How does this process work? We’ll cover the basics in this blog series.
- In the next blog, we’ll share the anatomy of a data value chain — with guidance on determining your level of data maturity. And if you’re not data mature yet, tips for flipping the script.
- What if you’re already data mature? Data mature companies can’t sit on their laurels. In the final blog, we’ll get into what the strategic state looks like and some of the ways we help companies get there.
Download our infographic to access a visual breakdown of The Data Value Chain.
Are you in the Early Stage of data management maturity? It might be time to consider MDM.
Amplifi can help. Before you begin, you need to find out where you are on your MDM journey, and discover what steps to take before tackling a full-blown MDM implementation.
Download our guide to understand the Building Blocks of MDM.