The Essential Components of a Data Strategy

The Essential Components of a Data Strategy

Krzysztof Suwada - March 11, 2023 - updated on March 10, 2023

Data is the new oil, and a good data strategy sets a roadmap to victory. Without a clear plan for managing and utilizing your organization’s data, you risk missing out on valuable insights and opportunities. But with so many components to consider, where do you start?

This article will guide you through the essential components of a successful data strategy. From defining business objectives and data governance to building a data culture across your organization, we’ll cover everything you need to know to transform your data into business gold. So buckle up, and let’s get started on the road to data success.

TL;DR

• A data strategy roadmap is essential for organizations to manage and utilize their data effectively.

• Key components of a successful data strategy include defining business objectives, establishing data governance, and building a data culture. Other important factors to consider include data architecture, data quality, and data security.

• Data analytics and visualization tools can help organizations extract insights from their data and make informed decisions. They also support building data literacy across organization.

• Building an enterprise data strategy involves various stakeholders, including business leaders, IT professionals, data analysts, and data scientists. Collaboration and communication among these teams are critical to ensuring the data strategy aligns with business goals and technical requirements.

• For companies that want to implement AI or Big Data initiatives, it’s crucial to start with a solid data strategy now. A well-defined data strategy provides a strong foundation for successful implementation of these technologies, enabling organizations to extract meaningful insights from their data and drive business success.

• If you’re looking to develop a data strategy for your organization, consider partnering with data strategy experts, like nexocode, to guide you through the process. Contact us today to learn more about our services and how we can help you transform your data into business success.

Why is Data Strategy Important?

Having a blueprint for your organization’s data-driven objectives outlines the components of your data program and the manners in which you will use it to provide value to the company. Establishing a data strategy and setting clear goals in this allows you to leverage data to its fullest potential and avoid any costly mistakes that could hinder your teams’ efforts.

Without a clear data strategy in place, your organization risks misinterpreting or ignoring the big picture of how data can be used to achieve business objectives. You may also miss out on opportunities to derive insights and make choices that will push your organization forward if you come to decisions based upon gut instinct or guesswork instead of hard evidence.

Properly managing and interpreting all of the collected data enables organizations to overcome multiple hurdles that may negatively affect profitability and overall success. The benefits of having a concise data strategy include the following:

Improved Decision-Making

Whether it’s budget allocation, marketing tactics, or staffing decisions, having the data to back up choices on such issues can lead to positive results for the company. The thorough analysis of data and clear presentation of the results through, e.g., data visualization and dashboards, simplifies the decision-making process and bases it upon objective metrics.

Optimized Business Processes

Organizations that focus on data-driven strategies can use their insights to identify resources that are being overutilized, as well as potential areas of improvement throughout the company. This will often result in more efficient business operations, saving time and money in the long run.

A Greater Understanding of Business Operations

Without a thorough comprehension of the core components that make up an organization (e.g., users or clients, supply chain processes, competitor activity), there is a greater risk of inefficiencies. A data strategy provides an overarching view of all components, enabling the team to better understand what is working and what needs to be changed.

More Predictive and Accurate Forecasting

Both prescriptive and predictive analytics allow an organization to ascertain its business objectives, as well as anticipate customer behaviors and manage risks. Descriptive analytics, meanwhile, can be the answer to a lack of understanding about the current needs of the business.

Streamlined Flow of Information

A data strategy that establishes and enforces protocols for data storage, usage, and transfer can increase the efficiency of data sharing around the various departments in an organization. What’s more, these same protections will also reduce the possibility of multiple business units duplicating the same data.

Protection Against Risk

Data governance and security components of a data strategy, which are especially vital in industries with strict regulations, serve to protect sensitive information whilst maintaining its integrity. Issues regarding data privacy and data quality might otherwise undermine the ability of an organization to conduct proper analysis of its data.

The Key Components of a Data Strategy You Should Focus On

In order to create an effective plan for the usage of data within a company, there are several critical aspects to consider in order to build upon the strong foundations of enterprise data management. Breaking them down individually will allow you to build a comprehensive data strategy that can be used to support your organizational objectives.

Focus on the Goal: Transformation of Data Into Business Insights

The aim of any data strategy should be to harness the power of your organization’s data and turn it into strategic decisions that drive tangible results: reducing costs, improving customer service, and optimizing business processes, etc.

Before you can get started on the components of a data strategy, it’s therefore necessary to set measurable goals that align with your company’s overall objectives.Focusing on the goals and priorities of the organization will facilitate the development of a data strategy that supports your desired outcomes and avoids unnecessary components.

Data Governance

The process of managing and overseeing data in order to verify that it is accurate, secure, and compliant with both legal and internal regulations. Data governance involves aspects such as data quality management, privacy measures, access control policies, and auditing.

Having effective data governance policies in place will enable your organization to make decisions based on reliable information that is free from bias or discrepancies. It also keeps data secure and all components of the data strategy remain compliant with applicable regulations.

Data Management

Developing a system to store, process, and analyze data, which includes components like a data warehouse, an ETL (extract, transform, load) data pipeline, and analytics tools for data analysts to use. Data management is essential for any data-driven organization and serves as the foundation of a successful data strategy.

Without consistent data management, it is impossible to utilize data effectively or accurately measure the efficacy of decisions that have been made or data initiatives that have been implemented. Investing in cloud-based solutions and data lakes, for example, will enable your organization to collect, store, and interpret large amounts of data more efficiently.

Data Architecture

Outline the components and platforms necessary for your data strategy to run smoothly, which means databases, applications, APIs, and more. Data architecture ensures that all parts of the data strategy are connected and compatible with one another, creating an environment that supports efficient data usage.

Data architecture also plays a key role in scalability – increasing (or decreasing) the number of databases and applications to support growing (or shrinking) demand or changing requirements. of the organization.

Data Infrastructure

The actual elements and data management tools used to build a data strategy, like software platforms, computing resources, and automation. Data infrastructure enables organizations to transition from raw data into useful insights that can be used to support strategic decisions.

This involves components such as data wrangling and feature engineering tools, machine learning systems, and analytics platforms.

Data Analytics and Tools

The process of uncovering insights from data, such as by using analytics tools and algorithms. Data and analytics are essential components of a data strategy roadmap because they facilitate the identification of patterns and trends in data that can be used to inform action plans.

For example, predictive data analysis tools can provide an organization with insights into future customer behavior and trends, allowing them to make business decisions accordingly. Data visualization tools are also often used to make complex data easier to interpret and understand.

Data Security, Privacy, and Ethics

Protecting data from unauthorized access or malicious actors is a vital component of any data strategy. This means implementing various security and privacy measures, such as data encryption technology and user-access controls.

Data ethics is also a crucial factor to consider, as organizations must guarantee that the data they collect is being used fairly and responsibly. Having a clear policy for appropriate data use and management will prevent any potential ethical issues from arising.

Data Culture

Creating an environment in which data can be used effectively by hiring data-savvy personnel and providing ongoing training to get everyone involved familiar with every aspect of the data strategy. Data culture should be embedded throughout the entire organization and directly align with your data-driven objectives.

A positive data culture must be nurtured within an organization to improve the likelihood of the data strategy roadmap being successful. Without one, it can be difficult to get everyone on board with the data strategy and understand why using data is critical for the future of the organization.

Costs Associated With Data and Setting Budgets

The expenditure associated with data acquisition, data storage, and data analysis must be taken into consideration when crafting the strategy. Setting a budget for each of these facets of the data strategy defines and is necessary for the efficient allocation of available resources and keeping costs under control.

Having an accurate idea of how much data components cost and what the associated benefits are will reduce the chances of any of the budget being wasted. As a result, organizations can get the most out of their data-driven efforts while avoiding any unnecessary costs. Read more about data-driven decision making here.

Who Is Involved in Building The Enterprise Data Strategy?

Since data strategy components affect every aspect of an organization, senior leadership should be heavily involved in each stage. It is their responsibility to confirm that the components of a data strategy roadmap are aligned with the overall business objectives, and that everyone involved is aware of their roles and responsibilities.

Additionally, the data team and business users must be consulted throughout the process in order to keep all aspects of the data strategy up-to-date and relevant. Involving the team in decision-making will give them a better understanding of how their work fits into the larger context and thus increase their motivation to deliver meaningful results.

How to Profit From the World of Big Data and AI? Start With A Solid Data Strategy

A data strategy roadmap is essential for organizations wanting to take advantage of the opportunities that emerging technologies can offer. Taking the time to understand and implement solutions such as artificial intelligence (AI) and big data will enable businesses to remain competitive in this ever-evolving digital landscape.

Big data – that is, the collection and analysis of vast quantities of data from multiple sources – can provide invaluable insights about customer behavior. But big data means more than just gathering huge amounts of information; it also requires the right data strategy, a positive data culture, resource allocation, and buy-in from senior leadership or the stakeholders.

Likewise, AI can be implemented to streamline processes, improve the customer experience, and uncover key trends that would otherwise remain hidden. However, organizations must bear in mind how, say, machine learning technology, which is at the core of AI, works and set parameters to maintain data privacy, security, and ethical use of collected information.

In other words, a data strategy roadmap is the foundation upon which businesses can leverage all of the opportunities afforded by big data and artificial intelligence. With the right approach, organizations can develop effective plans for leveraging big data and AI to gain valuable insights into customer behavior and trends, allowing them to make more informed decisions.

As such, having a data strategy in place will increase the chances of any investments made in these technologies to pay off in the long run. Any business that wants to stay ahead of the competition in this digital age must therefore invest in an effective data strategy roadmap today, if they have not already done so.

Creating a comprehensive data strategy requires careful consideration of all the above-mentioned components, remembering that each element must be sufficiently flexible to meet the changing needs of your organization. Further, involving relevant stakeholders and staff throughout the process enables any necessary changes to be made quickly and easily.

If you need any more assistance with setting up an effective data strategy roadmap, do not hesitate to contact data experts at nexocode. We can provide personalized advice that takes into account the needs of your organization and guide you every step of the way, so you can rest assured that your business strategy is fully optimized for success in this digital age.

About the author

Krzysztof Suwada

Krzysztof Suwada

Data Science Expert

Linkedin profile

Krzysztof is a data scientist who applies machine learning and mathematical methods to solve business problems. He is particularly interested in developing end-to-end solutions for companies in various industries using deep learning and NLP techniques.
Mathematician, software developer, and trainer. Krzysztof's expertise in machine learning earned him a Google Developer Expert title. A fan of Albert's Einstein quote: "If you can't explain it simply, you don't understand it well enough."

Would you like to discuss AI opportunities in your business?

Let us know and Dorota will arrange a call with our experts.

Dorota Owczarek
Dorota Owczarek
AI Product Lead

Thanks for the message!

We'll do our best to get back to you
as soon as possible.

This article is a part of

Becoming AI Driven
90 articles

Becoming AI Driven

Artificial Intelligence solutions are becoming the next competitive edge for many companies within various industries. How do you know if your company should invest time into emerging tech? How to discover and benefit from AI opportunities? How to run AI projects?

Follow our article series to learn how to get on a path towards AI adoption. Join us as we explore the benefits and challenges that come with AI implementation and guide business leaders in creating AI-based companies.

check it out

Becoming AI Driven

Insights on practical AI applications just one click away

Sign up for our newsletter and don't miss out on the latest insights, trends and innovations from this sector.

Done!

Thanks for joining the newsletter

Check your inbox for the confirmation email & enjoy the read!

This site uses cookies for analytical purposes.

Accept Privacy Policy

In the interests of your safety and to implement the principle of lawful, reliable and transparent processing of your personal data when using our services, we developed this document called the Privacy Policy. This document regulates the processing and protection of Users’ personal data in connection with their use of the Website and has been prepared by Nexocode.

To ensure the protection of Users' personal data, Nexocode applies appropriate organizational and technical solutions to prevent privacy breaches. Nexocode implements measures to ensure security at the level which ensures compliance with applicable Polish and European laws such as:

  1. Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (published in the Official Journal of the European Union L 119, p 1); Act of 10 May 2018 on personal data protection (published in the Journal of Laws of 2018, item 1000);
  2. Act of 18 July 2002 on providing services by electronic means;
  3. Telecommunications Law of 16 July 2004.

The Website is secured by the SSL protocol, which provides secure data transmission on the Internet.

1. Definitions

  1. User – a person that uses the Website, i.e. a natural person with full legal capacity, a legal person, or an organizational unit which is not a legal person to which specific provisions grant legal capacity.
  2. Nexocode – NEXOCODE sp. z o.o. with its registered office in Kraków, ul. Wadowicka 7, 30-347 Kraków, entered into the Register of Entrepreneurs of the National Court Register kept by the District Court for Kraków-Śródmieście in Kraków, 11th Commercial Department of the National Court Register, under the KRS number: 0000686992, NIP: 6762533324.
  3. Website – website run by Nexocode, at the URL: nexocode.com whose content is available to authorized persons.
  4. Cookies – small files saved by the server on the User's computer, which the server can read when when the website is accessed from the computer.
  5. SSL protocol – a special standard for transmitting data on the Internet which unlike ordinary methods of data transmission encrypts data transmission.
  6. System log – the information that the User's computer transmits to the server which may contain various data (e.g. the user’s IP number), allowing to determine the approximate location where the connection came from.
  7. IP address – individual number which is usually assigned to every computer connected to the Internet. The IP number can be permanently associated with the computer (static) or assigned to a given connection (dynamic).
  8. GDPR – Regulation 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of individuals regarding the processing of personal data and onthe free transmission of such data, repealing Directive 95/46 / EC (General Data Protection Regulation).
  9. Personal data – information about an identified or identifiable natural person ("data subject"). An identifiable natural person is a person who can be directly or indirectly identified, in particular on the basis of identifiers such as name, identification number, location data, online identifiers or one or more specific factors determining the physical, physiological, genetic, mental, economic, cultural or social identity of a natural person.
  10. Processing – any operations performed on personal data, such as collecting, recording, storing, developing, modifying, sharing, and deleting, especially when performed in IT systems.

2. Cookies

The Website is secured by the SSL protocol, which provides secure data transmission on the Internet. The Website, in accordance with art. 173 of the Telecommunications Act of 16 July 2004 of the Republic of Poland, uses Cookies, i.e. data, in particular text files, stored on the User's end device.
Cookies are used to:

  1. improve user experience and facilitate navigation on the site;
  2. help to identify returning Users who access the website using the device on which Cookies were saved;
  3. creating statistics which help to understand how the Users use websites, which allows to improve their structure and content;
  4. adjusting the content of the Website pages to specific User’s preferences and optimizing the websites website experience to the each User's individual needs.

Cookies usually contain the name of the website from which they originate, their storage time on the end device and a unique number. On our Website, we use the following types of Cookies:

  • "Session" – cookie files stored on the User's end device until the Uses logs out, leaves the website or turns off the web browser;
  • "Persistent" – cookie files stored on the User's end device for the time specified in the Cookie file parameters or until they are deleted by the User;
  • "Performance" – cookies used specifically for gathering data on how visitors use a website to measure the performance of a website;
  • "Strictly necessary" – essential for browsing the website and using its features, such as accessing secure areas of the site;
  • "Functional" – cookies enabling remembering the settings selected by the User and personalizing the User interface;
  • "First-party" – cookies stored by the Website;
  • "Third-party" – cookies derived from a website other than the Website;
  • "Facebook cookies" – You should read Facebook cookies policy: www.facebook.com
  • "Other Google cookies" – Refer to Google cookie policy: google.com

3. How System Logs work on the Website

User's activity on the Website, including the User’s Personal Data, is recorded in System Logs. The information collected in the Logs is processed primarily for purposes related to the provision of services, i.e. for the purposes of:

  • analytics – to improve the quality of services provided by us as part of the Website and adapt its functionalities to the needs of the Users. The legal basis for processing in this case is the legitimate interest of Nexocode consisting in analyzing Users' activities and their preferences;
  • fraud detection, identification and countering threats to stability and correct operation of the Website.

4. Cookie mechanism on the Website

Our site uses basic cookies that facilitate the use of its resources. Cookies contain useful information and are stored on the User's computer – our server can read them when connecting to this computer again. Most web browsers allow cookies to be stored on the User's end device by default. Each User can change their Cookie settings in the web browser settings menu: Google ChromeOpen the menu (click the three-dot icon in the upper right corner), Settings > Advanced. In the "Privacy and security" section, click the Content Settings button. In the "Cookies and site date" section you can change the following Cookie settings:

  • Deleting cookies,
  • Blocking cookies by default,
  • Default permission for cookies,
  • Saving Cookies and website data by default and clearing them when the browser is closed,
  • Specifying exceptions for Cookies for specific websites or domains

Internet Explorer 6.0 and 7.0
From the browser menu (upper right corner): Tools > Internet Options > Privacy, click the Sites button. Use the slider to set the desired level, confirm the change with the OK button.

Mozilla Firefox
browser menu: Tools > Options > Privacy and security. Activate the “Custom” field. From there, you can check a relevant field to decide whether or not to accept cookies.

Opera
Open the browser’s settings menu: Go to the Advanced section > Site Settings > Cookies and site data. From there, adjust the setting: Allow sites to save and read cookie data

Safari
In the Safari drop-down menu, select Preferences and click the Security icon.From there, select the desired security level in the "Accept cookies" area.

Disabling Cookies in your browser does not deprive you of access to the resources of the Website. Web browsers, by default, allow storing Cookies on the User's end device. Website Users can freely adjust cookie settings. The web browser allows you to delete cookies. It is also possible to automatically block cookies. Detailed information on this subject is provided in the help or documentation of the specific web browser used by the User. The User can decide not to receive Cookies by changing browser settings. However, disabling Cookies necessary for authentication, security or remembering User preferences may impact user experience, or even make the Website unusable.

5. Additional information

External links may be placed on the Website enabling Users to directly reach other website. Also, while using the Website, cookies may also be placed on the User’s device from other entities, in particular from third parties such as Google, in order to enable the use the functionalities of the Website integrated with these third parties. Each of such providers sets out the rules for the use of cookies in their privacy policy, so for security reasons we recommend that you read the privacy policy document before using these pages. We reserve the right to change this privacy policy at any time by publishing an updated version on our Website. After making the change, the privacy policy will be published on the page with a new date. For more information on the conditions of providing services, in particular the rules of using the Website, contracting, as well as the conditions of accessing content and using the Website, please refer to the the Website’s Terms and Conditions.

Nexocode Team

Close

Want to unlock the full potential of Artificial Intelligence technology?

Download our ebook and learn how to drive AI adoption in your business.

GET EBOOK NOW