What you don’t know about data management could kill your business

IT leaders take note: At your likely current trajectory, your organization is the Titanic and its data is the iceberg. To avoid the inevitable, CIOs must get serious about data management.

Data, of course, has been all the rage the past decade, having been declared the “new oil” of the digital economy. And yes, data has enormous potential to create value for your business, making its accrual and the analysis of it, aka data science, very exciting.

But at the other end of the attention spectrum is data management, which all too frequently is perceived as being boring, tedious, the work of clerks and admins, and ridiculously expensive.

Still, to truly create lasting value with data, organizations must develop data management mastery. This means excelling in the under-the-radar disciplines of data architecture and data governance. Emotionally, culturally, and psychologically data management has to be rebranded — in the words of Sumathi Thiyagarajan, VP of business strategy and analytics for the Milwaukee Bucks — as “joyous” work.

Dearth of data about data management

For all the talk about data, it is ironic that everywhere you look we lack data about data. For example, many organizations can’t even pinpoint how much they are spending on data.

One villain in all this is the analyst community. Subscription research firms and IT thought leadership centers have all but abandoned the data management area, pursuing instead the dopamine high of the Next New Thing. The knock-on impact of this lack of analyst coverage is a paucity of data about monies being spent on data management.

In reality MDM (master data management) means Major Data Mess at most large firms, the end result of 20-plus years of throwing data into data warehouses and data lakes without a comprehensive data strategy. Moving forward IT leaders are going to have to find some way to clean up what are essentially legacy data septic tanks.

At a recent conference, the editor of a major business publication invoked Chatham House rule prior to asking the approximately 250 senior executives in the room how many had what they considered a “coherent data strategy”? Seven individuals raised their hands.

Contributing to the general lack of data about data is complexity. There are many places in the enterprise where data spend happens. Individual business units buy data from third parties, for example. Taking enterprise-wide inventory of all the data feeds being purchased and getting an accurate picture of how all that purchased data is being put to use would be a good first step.

The reality is that a significant portion of the data sloshing about modern enterprises is replicated in multiple locations, poorly classified, idiosyncratically defined, locked in closed platforms, and trapped in local business processes. Data needs to be made more liquid in the way of an asset portfolio — that is, transformed to ease data asset reuse and recombination.

I conducted a survey of major cloud providers asking where the chief data officers they were working with were spending their time. Anywhere between 50% to 70% of the CDOs’ time is being spent on people issues, such as ownership of data in silos, according to those providers. Breaking down those data silos is yet another data management issue.

The payoff of data management

What we do know is that investments in data are substantial. Estimates vary widely, with data spend being pegged at anywhere between 10% and 57% of total IT budgets. Based on its analysis, McKinsey has concluded that a midsize institution with $5 billion of operating costs spends more than $250 million on data across third-party data sourcing, architecture, governance, and consumption.

And what do enterprises gain from that?

As a futurist I visit various tribes of modern existence, and because we live in angry times, I periodically ask those I meet, “What is making people most angry?” Speaking off the record on deep background, CXOs and the analysts, market researchers, and consultants who serve them tell me that the failure of analytics, big data, and artificial intelligence to deliver measurable and material benefit is really starting to piss people off.

And here is the gotcha piece about data. The Next New Thing — artificial intelligence — will not work at scale without clean, consistent, and accurate data. This will only compound organizations’ dissatisfaction with the return they are getting from their data investments.

In the meantime, CIOs need to make sure the enterprise knows what, where, to what purpose, and at what efficacy monies are being invested in data — and how those investments are paying off.

And this needs to be a top agenda item. Because, while historically data has not been on most executives’ radar screen, as my longtime colleague Barbara Wixom, principal research scientist at the MIT Center for Information Research, argues in her book Data Is Everybody’s Business: The Fundamentals of Data Monetization, data must be within the purview of every executive today.

Traditionally business schools have avoided data as a topic, pumping out business leaders who erroneously feel that data is someone else’s job. I recall the mean-spirited dig at early career Harvard Business School alums expecting their assistants to bring in the day’s work arrayed as a case study — that is, a crisp 20-page synopsis of all the relevant issues.

And now these executives must know their organizations’ data strategies are not only solid but on the right course to get the most from technology’s next wave, while avoiding catastrophe. Anything CIOs can do to increase executive awareness of their data responsibilities will go a long way toward creating a better future.