There’s no doubt that the value of data has emerged to become today’s most precious company asset, but this has not come without a cost. Sourcing data, protecting data, and making data accessible to your people all cost money in the form of technology investments, governance programs, and employee training. Today’s executives face the challenge of navigating their companies through these perilous times, often under tight budgets, while making the right data investments for future growth.
A recent McKinsey & Company article takes a closer look at this common company dilemma while offering up some tips for navigating success. According to the article, “Businesses will need to model information from more sources, apply insights over more channels, and do all of this continuously while ensuring that the data are clean, privacy is protected, and compliance responsibilities are met.” That’s a tall order for any company!
So, what can today’s data leaders do to find the resources and funding to keep their data analytics initiatives moving forward? The answer may lie in part with better data management, which can uncover major savings in data architecture needs, sourcing, and training.
The McKinsey article provides some key areas of focus to help unlock potential savings at your company, including:
Take a Closer Look at How Much You Spend On Data
A company’s data costs are often spread out across the enterprise, with business units covering a bulk of expenditures, while functions such as Finance and Marketing incur costs around data reporting and analysis. Determining the true cost to your company can be a difficult but worthwhile task. According to the McKinsey piece, “Targeted improvements in data sourcing, architecture, governance, and consumption can help companies tamp down waste and manual effort and put high-quality data within easier reach.”
Optimize Third-party Data Procurement
As more companies source data externally, the costs can quickly spiral out of control. Examining where you are sourcing external data, including alternative data, and how much you are paying for it can open up big opportunities for savings. Once you know what you’re spending and where, you can look for unused or underused data sources and re-evaluate existing contracts and agreements to reduce spending. Data-savvy companies have even set up cross-departmental data vendor-management teams to further optimize contracts and costs.
Simplify Data Architecture
Perhaps the most obvious area to look at for savings is data management, data storage, and repositories, which can quickly increase in cost right before your eyes. The article points out that “Storing and maintaining those troves can eat up between 15 and 20 percent of the average IT budget.” Companies can reduce costs by moving historical and unused data to lower-cost storage and halting current contract renewals. In the longer-term, migrating data repositories to a common, modern platform and moving to a cloud-centric approach can reduce the storage capacity needed to bring down costs even further.
To learn more, including the facts and figures behind how much data management costs, check out the complete McKinsey article.