Every self-respecting data management professional knows that “business alignment” is critical to the success of a data and analytics program. But what does business alignment really mean? How do you know if your program is aligned to the business?
Before describing what business alignment is, let me first list what it is not:
• Interviewing end users to understand their needs for data and analytics
• Recruiting a highly placed and influential executive sponsor
• Documenting a high return on investment
• Gaining agreement on the data strategy from multiple business areas
• Establishing a business-led data governance program
• Establishing a process to prioritize data requests and issues
It’s not that the items on this list are bad ideas. It’s just that they are missing a key ingredient that, in my experience with dozens of clients, makes all the difference. None of these items are even the best first step in developing a data strategy.
So what’s wrong with the list? Let me illustrate with an example. I was working with a team developing a data strategy for a large manufacturing company. We were interviewing a couple of high level managers in marketing, and it went something like this:
Me: What are some of the major business initiatives that you’re expected to deliver this year and next year? Do you have some thoughts on the data and analytics that will be needed within those initiatives?
Marketing manager: Sure, well, we have this targeted marketing initiative that we think will be a big winner. When a customer contacts us for warranty information, we think we can cross-sell products from another business unit… here’s a spreadsheet… we’ve calculated that this will bring back $14 million in additional revenue every year. We’re so excited that you’re doing the data warehouse initiative… We’ve been proposing this marketing idea for the last four years and haven’t been able to get it approved, and now we can finally get it done!
Me: I didn’t ask what you think the business initiatives should be; I asked you what they already are! (Ok, I really didn’t say it that way, but I wanted to.)
Why couldn’t they get the project approved? Who knows? Maybe the ROI was questionable. Maybe the idea wasn’t consistent with the company strategy and image. All that matters is that it was not approved, and hence makes for a lousy value proposition for a data and analytics program.
There is nothing wrong with proposing exciting, new “art of the possible” ways that data can bring value to the business. But an interesting proposal and an approved initiative are not the same thing. The difference is crucial, and data management leaders who don’t understand this difference are unlikely to be seen as trusted strategic advisors within their companies.
So what does it mean to be business aligned? Business alignment means being able to clearly state how deployment of data, analytics, and data management capabilities will directly support planned and approved (meaning funded) business initiatives.
So, the first step toward developing a successful data strategy is not to ask the end users what data they want. Instead, the first step is to simply find the top business initiatives. They are usually not hard to find. Very often, there are posters all over the place about these initiatives. There are a number of people in the organization you can check with to find top initiatives - the CIO, PMO leads, IT business liaisons, and contacts in the strategic planning department are examples of good places to start.
Then, you should examine the initiatives and determine the data and analytics that will be needed to make each initiative successful, especially looking for the same data needed by multiple projects across multiple initiatives. Core, enterprise data is usually needed by a diverse set of initiatives in slightly different form. For example, let’s say you work for a retailer and you identify approved projects for pricing optimization, labor planning, and marketing attribution. You can make a case that you will deploy the sales and product data these applications need, in the condition needed, in the time frame needed.
Proceeding further, you can propose and champion a series of projects that deliver the data needed by various initiatives. By doing this, along with establishing architecture and design principles of scalability and extensibility, you harness the energy of high-priority projects (instead of running away from it) to make your business case, add value by supporting the value of pre-vetted initiatives, and also build a foundation of integrated and trusted data step by step, project by project. Once this plan is established and in motion, you can accurately state that your program is absolutely needed by the business and you are also deploying data the right way – and you can also say that your program is officially business aligned.
Guest Blogger Kevin Lewis is responsible for Teradata’s Strategy and Governance practice. Prior to joining Teradata in 2007, he was responsible for initiating and leading enterprise data management at Publix Super Markets. Since joining Teradata, he has advised dozens of clients in all major industries.