3 crucial links between data and strategy
As organizations mature in their data science and analytics capabilities, the phrase ‘data strategy’ becomes more and more commonplace. Even if a comprehensive data strategy is a work in progress or even just an aspiration, executives now know that for data to become an asset, it needs to be linked far tighter with strategy than with infrastructure. However, there are more links between data and strategy than just developing a strategic approach to data.
Strategy for Data
For a number of years now data strategy has referred to developing and implementing a strategic approach to how data is collected, managed and used in an organization. Data strategy in this sense requires joining up data with business requirements, standardizing how data is sourced and gathered, establishing a sound technical infrastructure, getting the right people and processes in place, developing data governance, and specifying a roadmap, among others.
Data for Strategy
But this aspect, which I refer to as Strategy for Data, is just one of the three crucial links between data and strategy that every organization needs to think about. In order to maximize the value of data, it’s essential to think about Data for Strategy. In this perspective, the focus of the link between data and strategy lies on how to use data in realizing strategic goals. Data for Strategy calls for a systematic assessment of how data can feed into making strategic objectives a reality. This could include, for example, drawing on data to make better business decisions, improve operations, or transform business models in the course of working towards strategic goals.
Data in Strategy
Third, organizations need to think about Data in Strategy, that is using data in the process of strategy-making and setting strategic goals. In this perspective, new sources and types of data, for example unstructured or sensor data, offer several opportunities for improving strategy-making in organizations, for example by offering better measurement and monitoring of strategy, and providing answers to questions that previously weren’t so easy to solve. At the same time, drawing on data in the process of strategy-making changes how strategizing is done in organizations.
These three crucial ways in which data and strategy are related that I discovered in my research provide a more comprehensive overview of the links between data and strategy in organizations. It’s important that organizations don’t only think about developing and putting in place a Strategy for Data, but they also need to reflect on Data for Strategy and Data in Strategy.
Linking data and strategy
As data and strategy grow closer and closer together, these three aspects become increasingly interlinked. After all, an organization that uses data in its strategy-making is bound to draw on data to realize its strategic goals, which will require a strategic approach to data. And only a sound, strategic approach to data can form a foundation for using data in strategy-making and realizing strategic goals. The need to use data in achieving strategic goals will require and shape the strategy for data, and will influence how data is used in strategy-making too. This is why organizations need to think about data and strategy beyond just Strategy for Data to fully benefit from data as an asset.