W H I T E PA P E R

Data Strategies That

Provide Business Value

Sponsored by
SPONSOR PERSPECTIVE

Artificial intelligence (AI) and other emerging technologies Having a data ecosystem and culture that advance
will transform organizations, changing how they work data democratization empowers teams from across the
and deliver customer experiences. To operate in this business to generate insights and make decisions that
digital landscape, companies need a scalable technology drive greater speed, agility, and scale. When a customer
foundation with high-volume, high-quality data that is interacts with a product or experience, that is an
available to drive decisions in their core businesses. The opportunity for data to be captured; that data can provide
key objective of data transformation is to help companies insights to enhance the customer experience or positively
thrive by enabling them to more powerfully use data to impact other aspects of how the business operates,
improve business strategies. such as forecasting or risk management. Emerging
technologies like AI can help supercharge this cycle of
Making the most of AI requires a multifaceted data innovation and enable more customized solutions in real
strategy that enables people across the company to time, but the required foundation is data.
use data to inform important decisions. It’s imperative
that the data strategy include keeping data well- Capital One has sponsored this report by Harvard
managed. At scale, that can be accomplished with Business Review Analytic Services to examine how
central data standards and systems that have built-in organizations develop data strategies that keep
data governance. With a foundational central ecosystem, pace with today’s fast-moving world while driving
organizations can enable federated data access to users greater business value. Through interviews with data
across the company so they can harness the power of consultants, analysts, academics, and practitioners, this
data in their domain. Fostering a data-driven culture white paper outlines the challenges and opportunities
throughout the organization is an integral piece of a that companies face when building a data-driven
successful data strategy. organization.

Every company has different needs and is at a different Alongside this research, the insights offered in this
stage of its data journey, so exact elements of the white paper can help companies build a data strategy
strategy can vary. No matter the stage, success in that establishes a well-governed data ecosystem and
conceiving and driving the data strategy requires close healthy data-driven culture that provide a foundation for
collaboration across the business and data teams. Senior lasting business impact.
business leaders must buy into setting the strategy and
actively support the strategy with their budgets and
Amy Lenander
communications. Ideally from the CEO down, business
leaders should instill a culture of reverence for data Chief Data Officer
and data-driven decision making. Companies know Capital One
they have succeeded in fostering a data-driven culture
when there is fluency in properly capturing and caring
for data, and when data is used as a key part of critical
decision making.
Data Strategies That Provide
Business Value

As companies seek to build data-driven HIGHLIGHTS

organizations that leverage the power of artificial
intelligence (AI), executives must implement A successful data strategy requires
data strategies that fuel real business value. collaboration between the chief
data officer and the business
These data strategies enable companies to use unit leaders, as well as shared
insights or technologies that drive impactful accountability across the business.

business outcomes, including increased revenue

or greater innovation across products, services, Data-driven organizations must
and experiences. build a data strategy that effectively
manages their data in order to
However, many companies are having trouble implementing a data strategy leverage insights that drive
impactful business decisions.
that generates business value. According to a November 2022 survey by
Stamford, Conn.-based Gartner Inc., fewer than half (44%) of the 566 data
and analytics executives surveyed worldwide said their teams were effective
in providing value to their organization. In addition, a January 2023 study A data strategy must focus on
building a healthy data ecosystem
by Boston-based research firm NewVantage Partners (NVP), a subsidiary of
and an organizational culture that
Wavestone, found that a mere 26% of data executives at 116 Fortune 1000
promote the scalability, pliability,
companies have succeeded in creating a data-driven organization that makes and governance of democratized
decisions in real time based on data. data and allow the organization
The right people, processes, and technology are at the heart of any data- to take advantage of artificial
driven organization. Achieving this core requires a multifaceted strategy that intelligence and other emerging
focuses on establishing a governance framework that ensures data is accurate technologies.
and reliable, building a data-literate workforce, investing in the right tools
and technology, making data easy to access, and measuring the impact of
data-driven initiatives to ensure that they generate value.
Even so, some forward-thinking companies have found the keys to building
a data-driven organization and unlocking the value in their data. A 2023
IBM Institute for Business Value study of 3,000 chief data officers (CDOs)

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identified a group of “value-creating” CDOs who spend less

than their peers on data strategy and management yet achieve
equal or greater annual revenue growth. These CDOs have
implemented a data strategy that emphasizes innovation
as much as it does business protection, and they explicitly
align their data strategy with their organization’s digital The CDOs who are most successful
transformation. The study also found that the organizations at generating value from data not only
whose CDOs align data strategy with business strategy are
outperforming their peers in critical measures like more
are empowered; they also orient all
revenue generated from data. their actions around value.
These data executives are also developing a modern data
ecosystem that allows them to capitalize on the opportunities
of AI and other emerging technologies, which is a key
element in creating customized customer and developer
experiences. The infrastructure is built on the idea that can’t just say, ‘We will be 50/50, offense and defense,’ because
using data effectively should be part of the job description that’s basically not making a decision about what is important
of everyone in the organization. at any particular time.”
“Companies that successfully turn data into business value Consider a November 2022 study that Davenport oversaw
convert data strategy from an abstract concept to an action- for Seattle-based Amazon Web Services (AWS) and the
oriented, contextually relevant agenda for people throughout MIT Chief Data Officer and Information Quality (CDOIQ)
their organization,” says Krishna Cheriath, a professor in the Symposium. The study determined that “many CDOs are
Chief Data Officer Certification Program at Carnegie Mellon obsessed with creating—and in some cases measuring—value
University in Pittsburgh and the head of digital data and for their companies.” Almost two-thirds (64%) of the 350
analytics at Parsippany, N.J.-based Zoetis, an animal health data professionals worldwide surveyed for the study spend
company. “The leaders of business units should understand the majority of their time enabling new business initiatives
how data drives their business strategy, and the people in their based on data.
respective organizations who are implementing the business Given this fierce drive, organizations with a C-level executive
strategy should understand how to gain value from data and whose duties focus primarily on data, such as a CDO, are
how to use data in their operational, day-to-day jobs.” four times more likely to use data to transform the business,
As organizations build data strategies that align with according to Doug Laney, innovation fellow, data and analytics
business outcomes, they must reconsider how people, strategy at West Monroe, a management and technology
process, and technology interact. This paper will examine how consulting firm headquartered in Chicago. Organizations
organizations are building and implementing data strategies that put the chief information officer (CIO) in charge of data,
in an effort to become data-driven. making data only one part of a large technology portfolio,
are only half as likely to be doing advanced analytics. “I have
long advocated for the bifurcation of the IT organization
Getting in Step with the Business into separate organizations of IT and data/analytics,” Laney
Many organizations created the role of chief data officer says. “In some companies that have done this, they’ve given
because of the 2008-09 financial crisis, which spurred the CDO complete authority over budgets and everything
enterprises to safeguard themselves against future mishaps. related to data, and then the CIO becomes more of a chief
Over time, the CDO role has evolved from a mostly defensive technology officer.”
posture, concentrated on elements like ensuring regulatory The CDOs who are most successful at generating value from
compliance, to a more offensive one, focused on business data not only are empowered; they also orient all their actions
activities like improving customer experiences, enabling new around value. The 2023 IBM study found that value-creating
products and services, and boosting profits. CDOs do not engage in “flashy, big-bang” actions but instead
“Many contemporary CDOs, who find it difficult to move in lockstep with the business units, carefully plotting
demonstrate value quickly with defensive initiatives, are out “how” and “why” data investments will bring value. This
adopting offensive activities,” says Tom Davenport, a professor disciplined, methodical approach can bring big results. The
at Babson College, a visiting professor at Oxford University’s study found that CDOs with a clear line of sight from data to
Saïd Business School, and a fellow of the MIT Initiative on business value can spend $5 million less than their peers to
the Digital Economy. “But the key is, they are carefully accomplish the same results of revenue growth. Importantly,
emphasizing the things that are critical to their success. You the study found that 100% of value-creating CDOs were able

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to define this clear line of sight, compared to only 56% of all

SPONSOR INSIGHT
other CDOs. FIGURE 1

Fostering an Effective Data Culture

Connecting across the Enterprise
Generating value from data can depend on making linkages Data executives play a critical role in setting the
between different types of data and finding insights that are data strategy for an organization and putting the
hidden in the separate strains of data. Ironically, a primary pieces together for their organization to become
reason that data strategies fail is a disconnect between the data driven, but these individuals can’t do it
various people who are building versus implementing the alone. According to Christina Egea, vice president,
enterprise data product, at Capital One, creating
data strategies.
an effective data strategy requires collaboration
“There has been a lot of investment in infrastructure, but
with senior leadership to reinforce the strategy
there hasn’t been enough attention given to answering the
from the top down, ensuring that teams across
simple business questions that business leaders have,” says
the organization buy into the strategy and are
Randy Bean, founder of NVP and an innovation fellow at in alignment.
Wavestone. “I go into organizations, and the data leaders
tell me about all the capabilities they’ve created. And it all She says an organization’s leadership team also
sounds impressive. I talk to IT, and they tell me about all the plays a critical role in fostering a strong data
platforms, engineering, and architecture they’ve created. culture—one that thrives off leveraging data-driven
insights to make business decisions and prioritizes
And it all sounds very impressive. And then I meet with the
the processes required to manage that data. While
business leaders, and they say they don’t trust the data they’re
organizations need to embed a data-and-analytics
getting, they’re not confident it’s accurate, and they don’t
focus into their talent and operating models in
believe they can use it to make timely decisions.”
order to remain competitive, Egea states they
Many organizations have conflicting strategies in the digital also need to democratize access to data within
space, where different parts of the organization articulate and the business itself. The ability for the right people
implement high-level strategies for IT, data and analytics, across the organization to easily access and use
and artificial intelligence, with limited linkages between data for all types of decision making is a critical
aspect of a strong data culture.
An effective data culture also requires investing
in and supporting continuous learning. Egea
asserts that technology—particularly data tools—
is constantly changing, so providing resources
for training, reskilling, and upskilling empowers
employees to get the most out of their data as
technology changes.

them. “Looking at a data and analytics strategy as one

component under a larger digital strategy can bring a lot of
coherence between the different elements,” Carnegie Mellon's
Cheriath says.
A successful data strategy requires collaboration between
the chief data officer and business unit leaders, as well as
shared accountability across the business. “Having that data
and analytics value delivered and measured in each of the big
P&Ls [profit-and-loss statements], which then rolls up into
the company’s overall value proposition, is a good way to go,”
Cheriath continues. “If both the CDO and [the] business unit
leader are equally committed to the data strategy, they have
clarity around how the data strategy enables the business

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strategy and progressively becomes a critical component of Building a Data Culture

the business strategy itself.” A successful data strategy depends on having a strong data
culture—the collective behaviors and beliefs of the people
who value, practice, and promote the use of data to improve
Defining the Business Value decision making.
Defining value properly is a key yet tricky element when The key, as the 2022 AWS report noted, is not how many
devising an effective data strategy. “You shouldn’t measure individuals in an organization participate in data literary
the value of your data itself or the value of your data strategy, programs, “but whether those people actually change their
but [instead measure the value based] on how you execute mindset, language, and behavior.”
that strategy to solve business problems,” Babson’s Davenport However, companies are clearly struggling to adopt a
says. “You can predictively value what benefit you will data culture. Almost two-thirds of CDOs say the biggest
get from your data initiatives, but it’s far more useful to challenge in achieving their objectives is difficulty in changing
determine the actual value those initiatives brought after organizational behaviors and attitudes, according to the
they [were] finished.” AWS study. FIGURE 2
The IBM study found that value-creating CDOs define key The struggle to become more data-driven may be due in
performance indicators (KPIs) in a way that demonstrates the part to the complexity of building a data culture. The NVP/
importance of data to the business, showing how those KPIs Wavestone study found that companies have not progressed
are driving results and generating value. The study found that
“whether ROI for data is expressed in time saved, self-service
levels, lower costs to achieve goals, the number of problems
tackled, or data issues evaded, CDOs who take this care
generate 24% more revenue growth than those who don’t.”
This result-centric orientation is critical to having a
successful data strategy. “Many organizations fail because
they mistake a technology strategy for a data strategy,”
says Donna Burbank, managing director at Global Data
Strategy, an international data management consultancy
with headquarters in Boulder, Colo. “They focus on technical
tactics, such as where they are going to store the data, rather
than on how they are going to optimize their business
through data.”
In order to gain value from data, organizations need to
unshackle themselves from preconceptions of how their
business operates and how technology projects should
be pursued. Burbank was working with a large insurance
company that wanted to become data-driven, but its
data was stored and managed in a way that prevented the
company from knowing if a customer who had a homeowner
policy also had a car policy. “Instead of fixing their legacy
infrastructure, they literally created a new company and
migrated all their data over to it,” Burbank says. “They said,
‘It will take too long to move this big ship in the usual way,
and if we don’t do something differently, someone is going
to eat us for lunch.’”
Importantly, sparking innovation requires flexibility. “I
was speaking about an organization that had done 10 data
strategies in 10 years, and somebody said, ‘Oh, that’s really
awful,’” Wavestone’s Bean says. “I replied, ‘I actually think
that’s great, because the data strategy needs to be something
that’s revisited continually and continually reinvented.’
A data strategy should be dynamic, fluid, and adaptive. It
should be directional instead of having precise next steps.”

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in many of their efforts to become data-driven over the past change is a fraction of the amount spent on technology. We
three years. Perhaps for this reason, establishing a data still have the belief that if we put enough technology in front
culture is rated lower than any of the other aspirations cited of people, they will use it,” Davenport says. “The culture
by technology executives, named by less than 25% over the thing is tricky. If you are a CDO at a company that doesn’t
past three years, according to the survey. FIGURE 3 really believe in the value of data, you’d better show value
In some cases, companies may be unsure how to proceed from your data efforts and become visible very quickly. In
in their efforts. “There is no standard playbook, no blueprint that case, you need to go easy on the culture stuff, because it
yet, that chief data officers can use,” Bean says. “Any change takes longer and is more difficult to accomplish.”
or transformation takes time. However, many organizations Over the long run, data literacy is a key element in the
have a completely unrealistic view of what it means to be data- equation. “I just got off a call with a large manufacturer that
driven and develop a data culture. I met the president of a is standing up an entire data literacy program because they
consumer insurance group, and he said, ‘We’d like to become feel they’re not data-driven enough,” Burbank says. “They
a data-driven organization and achieve that within the next feel they’re squandering all the data that they’re collecting,
quarter.’ He was so unknowledgeable about the magnitude and they need to bake it into their culture by educating not
of the task, I just felt like picking up my bag and leaving.” only their executives but [also] their frontline people.”
Organizational culture remains one of the most perplexing Value is derived by making data accessible to all employees
elements of a data strategy. “The amount spent on cultural and educating them on how to work with data. However,

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“One of the core principles of data as a product is that you start

from the business and go to the data versus going from the
data to the business,” says Michele Goetz, principal analyst at
Forrester Research.

Products over Projects

SPONSOR INSIGHT As organizations seek better ways to gain and measure value
from their data, a growing number are embracing a “data
products” philosophy, which maintains a strong focus on
Applying a Customer-Centric the internal customer.
Approach to Data Today, most companies use a data projects approach,
Thinking about data as a product requires where someone with a particular problem asks that data
obsessing over the data consumer, namely by be acquired, cleansed, and prepared to address that one
working backward from their needs as if they were specific use case. In contrast, a data product approach
a business customer, says James Blair, senior vice provides a high-quality, ready-to-use data set that can be
president, enterprise data product, at Capital One. easily accessed and used by internal customers throughout
the organization and is continuously refreshed so it can be
This approach requires thinking about the
applied to many use cases.
problems the customer is facing or the needs
“One of the core principles of data as a product is that you
they have and then possible solutions. The data
consumer—business analysts, data analysts, start from the business and go to the data versus going from
data scientists—is no different. Blair says moving the data to the business,” says Michele Goetz, principal analyst
beyond simply defining important data and instead at Forrester Research, a consultancy based in Cambridge,
applying product-driven thinking to data can result Mass. “Data products help you focus on your intent and
in more efficient and valuable data use. the reasons you need the data, whether you are building a
forecasting model or developing a more-efficient supply chain
Clear ownership of the data is imperative, with the
so customers get their orders on time. Data products help you
owner staying closely connected to the consumer
think about the way the information will be consumed. Data
and solving customer needs to enhance their
products help you think about value in every step you take.”
experience. Ultimately, he adds, organizations can
realize considerable value when data consumers McKinsey & Co.’s Veeral Desai, Tim Fountaine, and Kayvaun
are equipped to produce insights that lead to Rowshankish, in an article published on the New York
positive, impactful decisions for the business and consultancy’s website, write that focusing on the customer
its customers. can help unlock the business value in data. “We find that when
companies instead manage data like a consumer product—be
it digital or physical—they can realize near-term value from
their data investments and pave the way for quickly getting
more value tomorrow,” the authors write.1
The NVP/Wavestone survey found that nearly one-fifth of
companies are realizing they must implement data literacy data executives (17.9%) said data products were the top area
in new ways to gain the most value from their data. “A lot of of data investment for their organization, second only to
companies approach data literacy with 30-minute training data modernization. Four in five of those data professionals
videos, where you take a quiz at the end, and if you fail (80%) said their organization was increasing its investment
the quiz, you just take it again,” Davenport says. “They are in data products.
designed for people to pick up just enough information to A June 2023 article in McKinsey Quarterly called data
pass the quiz. The smart companies are not approaching data products “the secret sauce” in scaling artificial intelligence,
literacy in a generic way. They are investing more and having noting that data products help deliver data-intensive
different versions of it for different parts of the company, applications as much as 90% faster, at 30% lower cost, and
such as one program for marketing and one for finance.” with a reduced risk and data governance burden.2

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“If you can move past the old practices of data projects
SPONSOR INSIGHT
and move to the new paradigm of data products, you can
create attributions for how data is contributing value to the
organization,” Goetz says. “You need to go beyond building
Modernizing Data Ecosystems
a warehouse environment to play with your data. There’s
a purpose for them, but they shouldn’t be 90% of your
for the Cloud
data strategy.” The cloud provides companies with the ability
to leverage data at scale. But many cloud-based
companies face challenges that prevent them
Designing a Well-Managed from fully realizing this value, including ineffective
Data Ecosystem data storage methods, unorganized tech stacks,
Data-driven organizations need a well-managed data and legacy data ecosystems that limit how data
ecosystem that can promote pliability, scalability, and the is managed, says Nisha Paliwal, managing vice
democratization of data.
president, software engineering, at Capital One.
The IBM study found that CDOs who are most successfully To get the most out of their data, companies must
creating value from data have firm ideas about what kind of reconsider how to modernize their data ecosystem
data architecture they need. Eighty-one percent said a “secure, and how to produce, consume, and govern data
transparent” architecture matters most. More than half said more effectively. At base level, Paliwal explains, a
“explainable, comprehensive outputs” (53%) and being cloud- data ecosystem generally includes three layers: a
ready (51%) are what matter most. FIGURE 4 real-time or batch publishing and streaming data
Value-creating CDOs also emphasize a cloud-ready data platform with data capture in real time checked
architecture that enables them to realize the full value of for completeness and quality as it is brought
being in the cloud, according to the IBM study. “The cloud
into the ecosystem; a cloud-based storage and
warehousing infrastructure, where data is kept
is a key component of the modern data ecosystem, and an
in its raw and complete form; and a data access
effective data strategy can help you get more from the cloud,”
layer where users can consume data from unified
Forrester’s Goetz explains. “If you understand how the cloud
enterprise platforms. She asserts that a modern
works in terms of elasticity and scale, you can make better data ecosystem provides a scalable foundation for
decisions about how much data should be in the cloud and strong data management.
how much data the cloud just accesses. The cloud can then
become a mechanism to scale out not just your data but also
your use cases.
“A data strategy must look through the lens of how business
stakeholders will ultimately deliver the data to help employees
and customers,” Goetz says. “The infrastructure must be designed so the data can be easily consumed by employees
and customers.”
She says a sound infrastructure for gaining value from
data should have three core technology principles—
interoperability, composability, and portability.
Interoperability allows different data sources and systems
to be connected and move the data easily to different places.
This process might involve putting applications together,
connecting a data warehouse to an application, or connecting
on-premises applications to multiple clouds.
Meanwhile, composability is the ability to create different
components that can be fashioned into a data product,
such as a table in a data warehouse or a log file in a data
lake. High composability uses a modular design that allows
rapid iteration, helping organizations pivot faster and
innovate quickly.
Lastly, portability is the ability to consume the data product
in different ways, such as on the premises, in the cloud, or
with certain compliance controls. These three technology

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SPONSOR INSIGHT

Pillars of Strong Data Management

A data ecosystem requires strong data management the policies and tools for data governance to make
to ensure that data is well-governed. With more data it easier for teams across the company to locate and
coming from more sources, companies need to know access data, glean key insights, and make decisions to
the ins and outs of the data, says Adriana Bello, drive the business forward, Bello adds.
managing vice president, product management, at
As organizations seek to take advantage of emerging
Capital One.
technology capabilities, data will remain critical
Companies have to know the origin of the data, the to their ability to scale. So, unified, company-
substance of the data, the changes made to the data wide platforms will be necessary to ensure data
over time, and the people who can access the data, standardization and governance are embedded into
she explains. For good governance to be done quickly core processes while ensuring data consumption
and at scale, companies should consider centralizing remains manageable.

principles can also contribute to many of the critical elements strategies sometimes fail because organizations publish a
of a data culture, such as making data more accessible. big document about what they want to do without having a
plan on how to execute the strategy.”
Rather than leave the data strategy at a top-line level,
Conclusion organizations must translate the strategy for each business
Data-driven organizations must build a data strategy that unit by having the CDO work closely with the business unit
effectively manages their data in order to leverage insights leaders, so they take steps to ensure that people throughout
that drive impactful business decisions. A data strategy must the organization understand the value of data and can
focus on building a healthy data ecosystem and organizational leverage it. “The people who are executing the business
culture that promote the scalability, pliability, and governance priorities need to be able to see the connection of the data
of democratized data, and allow the organization to take to their day-to-day jobs,” Cheriath says.
advantage of AI and other emerging technologies. By having a disciplined but open-minded view of their
Companies that generate the most value from their data are data strategy, companies can implement the people, process,
taking a methodical approach grounded in business needs, and technology changes that will allow data to generate
while appreciating that they must be flexible when applying meaningful business outcomes. As West Monroe’s Laney says,
data in a fast-changing business environment. “The companies that will be most successful in generating
Burbank advocates companies having a data strategy that value from their data will be the ones that think the most
is focused on the next two to three years—and data strategy creatively, that don’t put arbitrary obstacles in their own path,
spending that is based on their needs over the next three and that realize the way they did things in the past may not
to 12 months. “You need to have a big-picture view while be how they should do them in the future.”
being very clear on the actions to get there,” she says. “Data

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Endnotes

1 Veeral Desai, Tim Fountaine, and Kayvaun Rowshankish, “How to Unlock the Full Value of Data? Manage It
Like a Product,” McKinsey & Co., June 14, 2022. https://www.mckinsey.com/capabilities/quantumblack/our-
insights/how-to-unlock-the-full-value-of-data-manage-it-like-a-product.
2 Eric Lamarre, Kate Smaje, and Rodney Zemmel, “Rewired to Outcompete,” McKinsey Quarterly, June 20, 2023.
https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/rewired-to-outcompete.
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