Investing in data is a key way to boost performance but, without visibility into the value generated from data and analytics, it can be difficult for chief financial officers (CFOs) to justify new investments. It’s therefore essential to drive more value from data assets in ways that demonstrate the return on investment, according to Teradata.
Alec Gardner director, global services strategy at Think Big Analytics, A Teradata Company, said, “CFOs have traditionally been seen as the ‘bean counters’ who can stand in the way of data projects but, more and more, CFOs are acting as growth enablers. As such, they’re not just willing but eager to invest in the right projects that will help the organisation improve its bottom line results. So data teams need to position their projects the right way to get buy in from the CFO.”
Teradata has identified four ways to drive more value from data projects:
1. Understand and remove the bottlenecks that inhibit value
Treating data projects as separate, discrete projects creates data siloes and duplicate data by ignoring what is already available. These projects don’t necessarily follow the same standards as each other, which dilutes the concept of a single source of truth and creates extra work. Consequently, many organisations accumulate technical debt.
In isolation these projects may look financially viable but, as they add up, they can destroy shareholder value. Conversely, a project may not pass financial scrutiny in isolation but, when considered in conjunction with other projects, it may be viewed as feasible.
2. Highlight the cost savings achieved by leveraging data
The actual value of data depends on how the organisation handles data. Data redundancy occurs when data is moved to applications, rather than moving applications to a common data infrastructure. This raises the cost of managing information assets, increases data security exposure, and increases data and information complexity.
Leveraging existing data delivers a different business case dynamic characterised by lower total application costs and greater value, realised faster. This means new applications can be calculated at the margin rather than at their isolated total cost, and time to market can be dramatically decreased.
3. Perform data re-use analyses
Understanding how data is reused and overlaps can change how the organisation regards and values its information assets. Each application can be considered incrementally and on its own merits, however, they can leverage the same data across many projects to gain increased value.
Maintaining data in a common repository makes sense from both a business and IT perspective by offering a lower cost of upkeep, plus increased consistency and accuracy. If the application was developed in isolation, the data is less likely to be shared and the cost of the project would need to include the cost of compiling and integrating the data.
4. Use clear mathematics to demonstrate value
Without integrated data, each new application project must be considered and built from the ground up. This drives up cost and lengthens the project’s time to value. Using data that isn’t integrated forces the business case for the project to stand on its own. With data leverage from re-use, the time, cost, and effort associated with the project’s setup tasks don’t have to be incurred again. The result is a streamlined business that is better aligned with and accountable to shareholder requirements.
Alec Gardner said, “Data adds significant value to organisations and data projects are essential for growth. Data teams must work with the CFO to demonstrate value; this means optimising the way data is treated in the organisation to reduce costs and streamline processes. When this happens, the business will be better-placed to leverage its data for ongoing success.”