Data democratization — the process of making data accessible enterprise-wide — is a topic that’s been bandied about the boardroom for some time.
Data, and universal access to it, is recognized as the key to transforming companies, creating new opportunities, and unlocking the value embedded within organizations — all of which can positively impact a company’s top and bottom line. But companies haven’t progressed as planned.
In fact, recent studies suggest that rather than making progress, many firms are actually falling behind in meeting their data goals.
In a 2019 Big Data and AI Executive Survey by NewVantage Partners, executives from corporations such as American Express, Ford, General Electric, and Johnson & Johnson admitted they weren’t where they wanted to be on the road to data democratization.
Almost three-fourths (72%) of those surveyed said they didn’t feel they had created a data culture yet. Furthermore, 53% said weren’t yet treating data as a business asset and consequently felt their enterprises were not competing effectively on the analytics front.
So, how can CFOs help democratize data and empower more than just C-suite leaders to leverage data to create new opportunities, revenue streams, and drive business growth? The answer lies in managing the human side of the equation.
Data democratization pushes organizations to rethink how they manage, distribute, and consume data. That often means driving a dramatic cultural change in order to realize a financial gain. It also means freeing information from the silos created by internal departmental data, customer data, and external data and turning it into a borderless ecosystem of information.
To achieve this, CFOs have to adopt a new perspective. They need to actively mitigate — and even embrace — the risks involved with increasing accessibility. To do that and limit financial liability, CFOs need to champion better data governance practices to ensure data privacy and security, data quality, data ownership, and compliance with regulatory bodies.
No field today may better exemplify the benefits of achieving data democratization than health care. Drug development is one of the world’s most regulated, expensive, and risk-laden processes. On average, it costs roughly $2.7 billion to bring a new drug to market, according to a Tufts University study.
Democratizing data by creating a shared framework of metadata across clinical trial phases can give researchers real-time data and ensure a seamless exchange of information across all phases of this process.
Pharmaceutical company Boehringer Ingelheim has used such techniques to achieve better, faster data flow in its clinical trials processes to accelerate its drug pipeline. So democratizing data can be used as a tool to ensure privacy and security of data, even while bringing life-saving therapies to market faster.
To achieve such benefits, progressive CFOs need to consider far more than just finance, says Michael Schmelmer, finance chief at Boehringer Ingelheim.
“If we talk about transformation and digitalization we talk about it in research and in customer interactions, in customer engagement, and in the patient interaction, but less in finance,” he says.
A successful data democratization program shouldn’t require employees to have data science degrees. Micro services and dashboards now provide plug-and-play options for non-data specialists to understand different data stores.
Visual analytics such as infographics, interactive reports, and even augmented and virtual reality are growing in popularity among non-data experts. And conversational, voice-based systems are making data access even easier by allowing employees to simply ask for information they need. In fact, voice assistants are changing our expectations and interactions with machines, further expanding the democratization of data.
Data democratization pushes organizations to rethink how they manage, distribute, and consume data. That often means driving a dramatic cultural change in the organization in order to realize a financial gain.
There are many examples of how making data accessible is creating unique business opportunities. A major B-to-B steel company, for example, recognized it was going to have to shift to more of a B-to-C model. Driven by a government program to build 20 million affordable homes over three years, as well as a growing base of digitally oriented consumers, the company realized it had unique insights into potential market demands. More importantly, it identified a whole new market of underserved customers.
The company launched a revamped online steel retail store, giving the company and employees across departments improved customer insights thanks to the information gleaned from the store.
As a result, the organization was able to make more informed business decisions achieving higher profit margins. In fact, the company’s new consumer-facing platform generated more than $14 million in sales during its first year of operation — gains that could not be realized without data democratization.
There is always room for improvement. According to a Gartner data and analytics study last year, about 87% of organizations have low business intelligence and analytics maturity. That means most CFOs and their CEOs are supporting individual business units that are pursuing their own data and analytics initiatives as stand-alone projects.
What’s required for democratization to reach its full potential is a more coordinated and holistic approach that delivers enterprise-wide intelligence that drives revenue growth. That means it’s the CFO who needs to champion this effort and take a hands-on approach in order for it to succeed.
Dina Kholkar is global head of analytics and insights at Tata Consultancy Services.