Define Data Strategy
Learning Objectives
After completing this unit, you’ll be able to:
- Define the key components of a data strategy.
- Align data strategy with business goals.
- Explore an example of how data strategy principles are applied.
Define Data Strategy
At NTO, the need for a well-defined data strategy has never been more critical. With data spread across multiple systems and departments, the company struggles to make informed decisions and respond quickly to market changes. The chief data officer needs to create a data strategy that not only addresses these challenges but also aligns with NTO’s broader business goals.
NTO’s data strategy is a comprehensive plan that outlines how the organization collects, manages, analyzes, and uses data to achieve its objectives. It ensures that data is treated as an asset and that data management practices are aligned with the organization’s mission.
Key Components of a Data Strategy
The CDO knows the right data strategies focus on business outcomes where people, process, and technology are the key enablers, with trustworthy data being the essential ingredient.
NTO first inventories its target customer types and decides to focus on consumers. NTO then maps the customer journey to identify each key engagement point to understand the data that is available at each point. From this work, NTO creates an inventory of key data strategy components.
Let’s review some of the key data strategy components.
Data Strategy Component |
NTO Example |
|---|---|
Goals: Broad, long-term outcomes that an organization strives to achieve, such as increasing revenue, ensuring privacy compliance, or reducing service center turnover. |
NTO wants to increase revenue by 10% without decreasing profitability for the next 3 years. |
Objectives: Specific, time-bound, measurable outcomes that support the achievement of broader goals. |
NTO wants to increase existing customer revenue by 10% and increase the number of net-new customers by 5%. The goal is to reduce costs. And the objectives are to reduce customer service agent onboarding, increase service agent retention, and decrease call durations by 5%. |
Use Cases: Specific scenarios that need to be addressed to meet objectives. Use cases outline the practical applications of data in achieving business outcomes and are crucial for translating objectives into viable steps. |
NTO wants to reduce costs and call durations. By equipping customer service agents with comprehensive customer profiles, order history, and purchased product sentiment analysis, service agents can improve new product recommendations with appropriate discounts vs. accommodations. This increases the likelihood of sales while improving response times. |
Capabilities: Human- or technology-based processes to support the use case(s). These include application features, technology infrastructure capabilities, or data management tools necessary to collect, store, process, and analyze data effectively. |
NTO service agents will have access to a holistic order history, including guest check-outs, sentiment analysis based on customers’ product reviews, and agentic recommendations on product category or up-sell discounts. |
Data: The key ingredient of any data strategy. Types of data include zero-party data (data that customers intentionally share, such as preferences and survey responses) and first-party, second-party, and third-party data. |
NTO’s key data includes customer contact information, order history, and abandoned cart information. |
The CDO at NTO chooses to focus on the needs of the service agent to help increase revenue and reduce operational costs. Now that the CDO has defined the strategy, the next step is to begin the information needs assessment.
In the next unit, explore how to gather and assess information requirements.