Emanuel Younanzadeh is VP Marketing at The Modern Data Company.
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Few companies today struggle with acquiring data about their business. Quite the contrary; most businesses are overwhelmed with more data than they can handle, and of more types and sources than was possible even a few years ago. Someone from the outside might assume that a company can expect a steady stream of meaningful insights with all that data. Unfortunately, that often isn’t the case. Many companies are data rich but insight poor.
Let’s dive into what this means and how to address the problem.
Many People Have High Incomes But Are House Poor
Many cities and neighborhoods have seen home prices rise by huge amounts over the past few decades. As a result, some people with large incomes buy expensive homes that require a substantial portion of their income to support. In such a case, someone who on paper looks to have a high income with plenty of cash to spend may struggle to cover day-to-day expenses. This is because so much of their income is taken up by their home. They are house poor.
It isn’t always that the homeowners who are house poor lack financial means or purchasing potential. Rather, it’s often that they have structured the use of their income in such a way that they have trouble making daily, practical use of their money. Having a huge paycheck doesn’t do much good if you spend it all in one place. Worse, a house-poor homeowner often fails to build up a cushion of savings. This means that if they lose their job, they may lose their home. For all the money they earn and spend, they live on the edge of financial trouble.
With some changes, such homeowners can reconfigure their finances to make their money do more for them. For example, they can downsize to a home with a much smaller payment to free up more of their money for savings as well as other living expenses. By changing their financial strategy, the homeowner can vastly improve their quality of life. So what does this have to do with data? I’ll explain!
Data Rich But Insight Poor
Much like the high-income earner discussed previously, many companies have more than enough data to support their analytical needs. In fact, it can be more of an issue to determine what data is worth keeping these days than it is to gather enough to be of use. However, having a lot of valuable data coming in and making effective use of that data to drive insights are two entirely different things.
Much like the homeowner with most of their paycheck going to a house payment while they struggle to cover their bills, many companies have a treasure trove of data with massive potential to help the business. Yet they struggle day to day to make better business decisions because their access to insights from that data is limited.
According to an IDC survey commissioned by my company (registration required), one of the top challenges to increasing enterprise intelligence is the inability to synthesize internal and external data sources. While a high-value stream of data is coming in, the organization’s structure isn’t such that the data is being used effectively. Much like a homeowner needs to adjust their financial strategy to go beyond being house poor, companies need to change their data and analytics strategy to move beyond being insight poor.
Becoming Insight Rich
Luckily, the path to becoming insight rich with corporate data is a clear and well-traveled, though not easy, path to follow. An organization must focus on modernizing its strategies and technology infrastructure to make the data more accessible to a wide range of business users. If that is achieved, the business users can then derive rich insights and value from the data. Not long ago, it was very difficult to coordinate and integrate a wide range of corporate systems, both legacy and modern. Today’s technology options have evolved to enable faster, easier integration than ever before.
One of the fastest paths to leaving the days of being insight poor behind is for companies to implement a connective layer on top of their current data and analytics systems. Such a layer can provide an easy entry point to business users so that they can see all the data at their disposal and easily explore it to find important insights. Of course, it is critical that the overlay layer provides the appropriate levels of performance, governance and security. This is all possible today.
The main thing causing organizations to be insight poor isn’t a lack of available data any more than being house poor is a lack of available cash flow. Rather, it is about the structure within which the incoming data is being captured, made available and then utilized by the organization. With a commitment to making some structural and cultural changes, it is possible to enable a vastly improved level of insights while still staying within a reasonable budget.
Examples abound over the years of companies that saw increased success because of their ability to derive insights efficiently and effectively from their data. Many insight-poor companies assume this means that massive amounts of money were spent alongside massive organizational changes to get there. While it certainly does take some investment and some change, becoming insight rich is often just a matter of modernizing your approach.
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