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Data strategy: how an ecosystem approach can help shape your vision

Fri Feb 12, 2021
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This blog sets out the ODI’s thinking on data strategy. We explore how to define data strategy, what to aim for when creating a data strategy and how an ecosystem approach can help shape your vision

2020 was a year like no other in living memory. Not only has the pandemic forced many of us to depend on digital services and infrastructure, it has also shone a light on the fundamental role data plays in our society and our economy, and in ensuring both remain resilient.

Decisions are increasingly being influenced or even made by algorithms. Over the past year, we’ve witnessed in government what can go wrong when humans are taken too much out of the loop (think of Ofqual’s grading algorithm). We’ve seen the consequences of poor data governance on organisations’ reputations and business growth (eg the British Airways and Desjardins data breach scandals).

The coronavirus (Covid-19) has also shown us all how open and collaborative approaches can make change happen faster than ever before. The record speed at which vaccines were co-developed in an effort to tackle the pandemic is an illustration of this.

This is leading many organisations to revisit their data strategies and data infrastructure roadmaps with a goal of improving the ways they acquire, store, manage, share and use data. Much more still needs to be done to factor people, practice and behaviour into these plans.

How to define data strategy

There is no single or generally-accepted definition of ‘strategy’ or ‘data strategy’. The Oxford English Dictionary’s definition is ‘a plan of action designed to achieve a long-term or overall aim.’ More widely-accepted business definitions of strategy, and there are an abundance to choose from, emphasise what an organisation can do differently to outperform its peers.

In our work at the Open Data Institute (ODI), we encounter two core challenges when we talk to people and organisations about their data strategies:

  • Many assume data strategy is only about the governance of data and/or its use (as an asset) to inform tactical decisions
  • Culture, people and organisational change are rarely featured; thereby leaving little or no teeth in strategies and the tactics they rely upon for execution

As a result, organisations tend to struggle to draw links between their business strategy and data strategy.

An effective and robust data strategy needs to be aligned with overarching business goals and recognise the importance of the wider data ecosystem, outside business boundaries. Such a robust mechanism will inevitably help inform organisations on how to achieve those long-term goals – as well as how to track progress along the way (for example see this piece on the relationship between objectives and key results, and key performance indicators).

Put simply, data strategy should direct how an organisation develops and resources its internal and external data infrastructure and data culture in support of its business strategy.

What to aim for when creating a data strategy

The ODI has long advocated for and supported an open culture where data infrastructure is as open as possible, data literacy and capability is accessible to all, and open innovation can flourish accordingly.

Building such an open and trustworthy data ecosystem is beneficial to both businesses and society. Opening and sharing data can help companies increase revenue, reduce direct costs, and improve efficiency in operations. A changing landscape of consumer and citizen rights, and expectations over privacy and data portability, require businesses to improve how they access, use and share data.

This creates both new challenges and new opportunities. Increasingly, competitive markets and complex supply chains require businesses to rethink how they drive innovation. The use of artificial intelligence and machine learning is leading to increased demands for data, which can be costly for organisations to collect and maintain alone.

There are material implications for the people and culture of organisations working towards these goals:

  • they will need to apply appropriate people and resources to support the development of open and trustworthy data ecosystems
  • they will often need to change key practices and processes (including in some cases changes to business models)
  • they will need to initiate and support leadership for the required organisational changes from the top

Organisations need to design their data strategies in tandem with wider business strategies, in order to facilitate planning and allocation of resources. Fundamentally, a data strategy that looks beyond the organisation’s boundaries, to how it fits within an open and trustworthy data ecosystem, needs a mindset and behaviour shift that goes beyond introducing new technologies or data governance processes.

Get started: the questions that shape data strategy

In our work helping organisations with their data strategies, we look at three key questions.

  1. How does the organisation fit within their wider data ecosystem?
  2. How does the data ecosystem, and the organisation’s role within it, need to change to further the organisation’s goals?
  3. What does the organisation need to do to enact those changes?

First, let’s consider, how does the organisation currently fit within the wider data ecosystem? Here, we think about organisations in four roles based on the ODI’s theory of change:

  1. as decision makers that rely on data
  2. as creators of tools and services that support others’ decisions
  3. as collectors, maintainers and stewards of data; and
  4. as influencers on the wider data ecosystem through activities such as creating case studies, contributing to data standards, running innovation challenges, or developing guidance and policies.

Data landscaping tools, such as data ecosystem mapping, help us to explore the multiple roles that organisations play and their relationships with others. Data maturity assessments help to examine how well organisations meet those roles.

Second, how does the data ecosystem, and the organisation’s role within it, need to change to further the organisation’s goals? Sometimes this might be about addressing current barriers, such as ensuring the organisation can reliably get hold of the data it needs to inform its decisions or build useful services. At other times, this is about examining longer term trends, and identifying threats and opportunities for the organisation, for example around consumers’ changing relationship with data. Design fictions help to bring these potential futures to life.

Finally, what should the organisation do to make those changes happen? Sometimes this involves investing in new data or new technologies. Frequently it means improving or developing new internal capabilities – here tools such as our Data Skills Framework help organisations think through the data literacy of their workforce. It can also mean building new partnerships and collaborations, where interests are aligned and common assets and understandings can lift all boats. Throughout all this, as with any organisational change, identifying incentives and points of influence, and embedding changes into existing processes and practices, are keys to success.

Listen to our podcast on data strategy

As part of the ODI Inside Business series, our Learning and Business Development Director, Stuart Coleman, is joined by four high-profile business leaders for a lively discussion on data strategy, and why it matters for businesses now more than ever. Listen to the podcast here.

Watch our on-demand webinar on data strategy

As part of the ODI Inside Business series, join learning Associate Simon Bullmore and Senior Partnerships Manager Ryan Lynch, as they share tips and tools for applying ecosystem thinking to the development of your data strategy. Listen to the webinar here.

Need help with data strategy?

We’d love to discuss your data strategy ideas and challenges and share how we can help. Get in touch with our team.