Building a Data Culture Builds Better Revenue, Too
Building a data culture isn’t just about having more people access data and making smarter decisions. A strong data culture is directly linked to a company’s revenue, as Ashley Womack, director of corporate marketing at Alation, explains.
- By Upside Staff
- June 2, 2022
Alation recently released the results of its Q1 2022 State of Data Culture Report. The company says the report “provides a regular assessment of the progress enterprises have made in establishing a data culture within their organizations, the challenges they face in embracing data-driven decision making, and key drivers for data and analytics.” We explore some of the report’s findings with
Ashley Womack, director of corporate marketing at Alation.
Upside: Your research has found a correlation between a “strong data culture and an organization’s ability to achieve or exceed revenue goals.” You’ve pointed out the bottom-line benefits of creating a data culture. Do C-suite managers see this connection?
Ashley Womack: Most organizations fall into one of two categories: one side believes they have already successfully built a data culture, and the other side barely acknowledges that their lack of data culture is a problem. The latest Alation State of Data Culture Report confirms that organizations with a top-tier data culture continue to meet or exceed their revenue goals.
However, the research also shows a disconnect when it comes to fulfilling funding promises dedicated to creating a data culture that drives revenue and operational efficiency. Executives know they have a bigger hill to climb, but there appears to be a lack of action to meet these goals.
The report mentions that 98 percent of data leaders said they need additional investments in their enterprise’s data analytics, but 51 percent expect they’ll only get half (or less) of the amount they say they need. “Just 18 percent of data leaders expect to receive the full amount they say is necessary.” What accounts for this funding gap? What competing demands are siphoning away money, according to your survey?
For organizations to reap the benefits of data, the C-suite must understand the direct correlation between investing in data and staying ahead of the competition. This latest Alation research shows that only 29 percent of data leaders are very confident that their CEO understands this link. This points to a strategy gap where C-level executives effectively pay lip service to the benefits of investing in data and analytics but don’t make it a priority, leaving organizations vulnerable to disruption.
Executives need to stop relying on their intuition to make decisions and instead leverage the data at their disposal to develop a sound strategy that moves the needle. If they don’t, they’ll hold their organization back and give competitors an advantage. The responsibility falls on data leaders to help their C-suite recognize the power of data-driven decision making and secure dedicated funding to create a data culture.
Your survey mentions that two-thirds (65 percent) of data owners are technical C-level positions (such as CIO or CTO) and a third (31 percent) are business executives. Why is this distinction important? What does it have to do with building a data culture?
Not everyone involved with the data strategy plays a day-to-day role in implementation, which leads to the disparity between promised funds and actual budget we spoke about. Executive ownership of data is more likely to result in business metrics such as cost savings and revenue being used to measure the impact of data initiatives. However, tech owners of data are more likely to focus on efficiency and internal processes. This is reflected in the survey data, which confirms that the ultimate owner has an impact on how companies measure the success of data initiatives and how funds are disbursed.
Where do data leaders feel the greatest need and where do they think they’ll get the biggest ROI?
The report found that data leaders overwhelmingly feel the need to improve customer experience, propel digital transformation to drive greater business efficiency, and increase profitability, which is no surprise as these areas have historically had the greatest ROI.
These efforts are often spearheaded by finance, sales, and operations teams to drive the adoption of data-driven decision making inside companies. These leaders must be diligent in their efforts to prioritize a data strategy and as a result drive ROI. It’s important to have someone at the highest level of your organization champion the goal of getting the most ROI from their organization’s data rather than just a select few advocating for the strategy.
Data catalogs not only came out on top of a list of core areas for investment to improve their organization’s data culture, but the percent of data leaders putting this on their list jumped to 87 percent from just 68 percent six months ago. Why do you think data catalogs came out on top -- and rose so fast on their list? What benefits do data leaders see in having one?
Although awareness about data culture continues to grow, the problem that many executives and their organizations are now tackling is determining how to implement a solid foundation for it. The benefits to implementing a data catalog include improved data efficiency, improved data context, reduced risk of error, improved data analysis and more. Data leaders who see the benefits of data catalogs avoid introducing significant risk to their organizations or being disrupted by competitors.
What other needs were high on data leaders’ list?
Research showed that data leaders believe that the first steps to building a data culture include constructing step-by-step processes to sort data (44 percent), creating an inventory of existing data (43 percent), and fixing existing data quality issues (38 percent). This was even higher among top-tier companies, with 94 percent of data leaders at these organizations noting data catalogs were important, and 39 percent calling them "essential.”
[Editor’s note: Ashley Womack is the director of corporate marketing at Alation, a enterprise data intelligence solutions provider that combines machine learning with human insight to tackle the greatest challenges in data and metadata management. A veteran marketing and communications professional, Ashley has over 15 years of experience in B2B tech, retail, and consumer goods.]