The Success or Failure of DX Hinges on Data Management
Feb. 12, 2020
It has long been said that the management resources that are important to companies are “people, things, and money”, but the coming age of digital capitalism will be “talent” and “data”. Above all, digital data has become a fount of new wealth for companies, like in the saying that “data is the new oil”.
However, it could be said that “data management”, i.e., how companies can effectively utilize their data, is still developing.
NRI evaluated 75 Japanese companies with a “digital constitution” score which indicates the degree of preparedness for digitization at the company level. When comparing top companies with a high digital constitution score and second-tier companies that have made piecemeal advances in their digital constitutions, the most notable difference between them was data management. Specifically, 76.5% of top companies answered the question “Is all of the company’s data ascertained and is there an environment in which internal and external data can be used across organizational boundaries? ” with the response “Yes/Essentially yes”, while 0% of the second-tier companies gave that response. This survey result shows a rather extreme difference, and I think it is no exaggeration to say that the success or failure of a company's digital transformation (DX) hinges on its data management skills.
Creating “environment” and “culture” is the key to data management
By the way, what does data management involve doing in the first place? I think two things are important.
The first is “creating an environment that facilitates easy access to data.” It sounds easy, but this is in fact quite difficult. This is because there is a strong sense of “sectionism” in Japanese companies—that each department’s data is its own—and there is a tendency to be reluctant to let data leave one’s own department. Further, even if “information sharing” is promoted, that becomes an end unto itself, and there are cases where progress is not easily won because the amount of data is scarce even if accessed, the desired information cannot be obtained, or the data is dispersed (some existing only in the minds of experts). First of all, it is important to have access in real time, but the most important thing is to organize data so that the people who want it can get it when and how they want it.
The second key to data management is “creating a culture that makes it easy to utilize data.” The saying that “data is the new oil” introduced at the beginning has several meanings, including the irony that “(data) does not produce value unless it is processed.”
Even in companies that are actively engaged in data management, the IT department often centrally manages the data for the entire company for governance reasons. From the perspective of the IT department, secure data management and data quality are the most important issues, and there is little concern about whether data is used. For this reason, the provided data is inconvenient to use in the form that it is in, and sales departments and planning departments end up processing the data each time according to their purposes.
We are beginning to transition from the era of using data for routine work to the era of utilizing it through repeated trials to aggressively improve work efficiency and the customer experience (CX). In order to cope with this transition, it is helpful for departments in charge of data management to provide not only primary data but also data processing tools so that they can support monitoring and promotion of use. By doing so, it will also lead to freeing younger workers from having to prepare data processing materials, which dovetails with the idea of “work style reform”.
Three points for appropriately implementing data management
There are three points for companies to successfully implement data management.
The first is to clarify where responsibility lies. A data management strategy needs to be considered within the context of total optimization, not piecemeal optimization. To that end, instead of entrusting data management specific department, a company should appoint an officer in charge of data management. However, given the difficult with abruptly creating a full-time position, it is good to have an officer in position capable of promoting company-wide change, such as the CMO (Chief Marketing Officer), double in this role.
The second is the setting of KPIs (Key Performance Indicators). Simple ones are better because it does not work if they are too complicated. In the case of data management, effects should be verified on the basis of whether data or tools were used, specifically, easy-to-understand indicators such as “used within one year”, “useful”, and “searched for”.
Finally, where to put data is also a big issue. Currently, external collaboration is increasing, so a project cannot even be formulated unless data storage is connected to somewhere external. Business will be delayed in cases where data is stored in a specific company and cannot be accessed by other companies at all times. Choosing a secure and flexible platform is an important consideration in data management.