In this post, we’ll consider roadblocks firms can encounter when searching for or implementing a data strategy, which data to focus on finding, and how to get your team to effectively start using private equity solutions.
Firms that have decided to take the plunge into data-driven decision-making need to focus on what kind of data they want, how much of it is available, and what their team can do with it. Data is not just for engineers or statisticians. To use a good amount of the information that’s out there today, you don’t need an engineering degree; in fact, you may not even need your own IT department.
What are some roadblocks, pitfalls, or strategies to avoid when looking for solutions?
One problem can be prematurely jumping to the end of compiling a data strategy, which is typically where visuals and pretty dashboards come in. The problem nobody has is that they don’t have a charting application of some sort, but a data strategy is far more than charts and dashboards. If you are too eager to get straight to the charts, you’re likely to end up in a situation where you get just that: a charting application. In contrast, a data solution is more robust and can help an organization properly create and prepare the data for visual consumption via charts and dashboards.
When an organization finds that they may have a data problem, how do they determine which data could help them progress?
“What data do we need?” is a good place to start, but use careful consideration for your definition of “need”. It’s too easy to say that you need “all of the data” or “everything”. If you take that pathway, you could end up chasing information that has a relatively small impact, but a large amount of associated time and resources which may end up actually inhibiting progress. To define your specific needs, identify which problems you are having: procedural, system-wide, operational? Determine what your pain points are, and you will start to see the pieces that are missing. It will become clear what data is behind those issues, and that’s the data you need: the data involved with problems leading to inefficiencies.
“What data don’t we have yet?” is another perspective to consider. What data are you missing that would allow you to generate more useful information? An effective data strategy–a plan to solve problems related to data–can come into play here. First, identify your problems, review your processes, systems and inefficiencies, and consider where technology could be used to leverage your work, then align these with your purpose. Next, think about why you need to solve these problems. When you have a strategy in place, you’re going to become something new, do things differently, and perform tasks in other ways.
You’ve invested in a data solution: how do you get your team to use it?
For the most part, the challenge will actually become how to get your team to use your data solution correctly. The key will be outside of the dashboard and visual layers. Focus on getting through the procedural steps of accessing, warehousing, normalizing and transforming data. It won’t be difficult to get teams to start using a charting application, but they could stop quickly if they don’t trust the solution, it doesn’t have the information that they need, or it doesn’t have the answers they’re looking for.
One of the ways to solve this is to make the new data solution the only place to go. A data solution will allow you to centralize your operations by creating a single place to go for the information anybody needs, at any time. Then, the key lies in keeping users in the new system by making it useful, effective, trusted, and workable. Solutions like Altvia Answers offer real-time, self-service solutions that any business user can easily access and interact with. There’s a point at which the success of firms investing in a data solution is going to be the result of how diligent they are about identifying and buying to solve problems.
Click here to download the Guide: Data & Technology for Private Equity Firms.